The CLARITY Act, formally known as the Digital Asset Market Clarity Act, is a major piece of proposed U.S. legislation designed to create a clearer regulatory system for cryptocurrencies and other digital assets. For years, crypto companies have operated under uncertainty over whether their tokens should be regulated as securities by the Securities and Exchange Commission or as commodities by the Commodity Futures Trading Commission. The bill attempts to settle that dispute by defining different categories of digital assets and dividing oversight responsibilities between the two agencies.
Under the legislation, the SEC would continue supervising digital securities and investment-related token offerings, while the CFTC would receive broader authority over decentralized digital commodities and the exchanges, brokers and dealers that trade them. Crypto platforms covered by the law would face registration, disclosure, recordkeeping, customer-protection and anti-money-laundering requirements. The proposal also addresses decentralized finance, tokenized securities, stablecoin rewards and the ability of Americans to hold digital assets in self-custody.
The bill’s significance goes far beyond deciding which regulator oversees Bitcoin or Ethereum. Clearer rules could encourage banks, asset managers and technology companies to develop blockchain-based products in the United States rather than moving operations overseas. Supporters believe the legislation would reduce costly legal uncertainty, attract institutional investment and replace the government’s regulation-by-enforcement approach with a more predictable framework.
Critics, however, worry that the bill could weaken traditional securities protections, create regulatory loopholes or make it easier for some crypto projects to avoid SEC supervision. Lawmakers have also debated how the legislation should address illicit finance, conflicts of interest, decentralized platforms and rewards paid on stablecoin balances. These disagreements could still shape the final version of the bill.
The House passed the CLARITY Act in July 2025 by a bipartisan vote of 294–134. The Senate Banking Committee advanced an amended version on May 14, 2026, by a 15–9 vote, but the legislation has not yet cleared the full Senate or become law. Its ultimate importance will depend on the final language, but its progress represents one of the most serious attempts yet to give the American cryptocurrency industry a permanent federal rulebook.
