Key conclusions

• The CLARITY Act seeks to address years of regulatory uncertainty with a structured framework that clearly defines digital assets, intermediary roles, and disclosure obligations.

• Subjects most spot transactions of eligible tokens to CFTC supervision while keeping the SEC responsible for initial offerings, disclosures and investor protections.

• The bill focuses equally on regulating business and assets, setting registration and conduct standards for exchanges, brokers and dealers to strengthen market integrity and transparency.

• The GENIUS Act regulates stablecoins, while the CLARITY Act only applies in supplemental areas such as disclosure and any rewards features associated with the employ of stablecoins.

The CLARITY Act (Digital Assets Market Transparency Act of 2025) aims to break the legislative gridlock in the industry through a two-pronged approach that defines what digital assets are and devolves oversight based on how they function in the market. The legislation goes beyond ad hoc enforcement and instead proposes a comprehensive framework for asset classification, intermediary roles and mandatory disclosures.

This article explains what the CLARITY Act is and why it is crucial, outlines its goals, and analyzes how it proposes to regulate stablecoins. The concept of mature blockchains, key arguments against the CLARITY Act and its current legal status were also discussed.

Why the CLARITY Act matters

The CLARITY Act addresses a long-standing problem in the crypto space: regulatory uncertainty.

For several years, digital asset companies have been struggling with confusing overlap between the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC). The SEC often treats many tokens as securities, while the CFTC classifies them as commodities. This ambiguity has slowed innovation, complicated compliance, frustrated investors and created confusion for cryptocurrency companies.

The CLARITY Act seeks to address this issue by establishing clear definitions of digital assets and assigning regulatory responsibilities based on the type of asset and related activity. A pre-defined framework allows market participants to immediately understand the applicable rules, rather than facing uncertainty resulting from enforcement actions.

Main goals of the CLARITY Act

The bill takes three basic approaches to establishing the associated regulatory infrastructure:

More precise definition of asset classes

The CLARITY Act introduces the term “digital good”, which refers to a digital asset whose value results primarily from the employ of the blockchain system associated with it. This definition does not include time-honored securities and stablecoins. As a result, spot trading of many eligible tokens would fall under the purview of the CFTC. Recognizing the practical challenges facing crypto networks, the definition emphasizes blockchain functionality and sufficient decentralization.

Clarification of regulatory jurisdiction

The Act divides supervision according to function:

• CFTC gains primary advantage power for digital commodity transactions, in particular on secondary and spot markets and trading platforms.

• The SEC retains authority over primary offerings, investor protections, required disclosures and initial sales.

The bill also encourages joint rulemaking in overlapping areas, such as information disclosure.

Establishing consistent rules for disclosure and conduct

To protect investors and support fair markets, regulations require developers and issuers to disclose standard information. These would cover blockchain technical details, token economics and key risks, providing market participants with comparable information to evaluate projects. Intermediaries such as digital commodity exchanges, brokers and dealers would be subject to registration, reporting and oversight requirements largely overseen by the CFTC for trading-related activities.

Overall, the CLARITY Act aims to replace regulatory gray areas with clear guidance, supporting innovation while maintaining investor protection and market integrity.

Did you know? Debates over cryptocurrency market structure influence policymakers’ approach to regulating AI models, as both involve unclear accountability and rapidly changing innovation cycles.

How the CLARITY Act treats stablecoins

The GENIUS Act, passed in 2025, established a federal framework specifically for payment stablecoins. Excludes eligible stablecoins from classification as securities or commodities, provided they meet stringent reserve, redemption and governance requirements.

The CLARITY Act does not replace or replicate this stablecoin regime. Instead, its provisions apply in a complementary manner, particularly with respect to stablecoin rewards, related disclosures, and their interactions with broader digital asset markets.

The concept of “mature” blockchains

Through the Asset Evolution Mechanism, the CLARITY Act sets out a path for a blockchain to achieve “mature” status by meeting decentralization and other functional criteria.

Once these criteria are met, the associated token begins to be treated as a digital commodity under the supervision of the CFTC. This can significantly reduce regulatory requirements such as registration, provided the project meets other applicable conditions.

The concept of mature blockchains reflects the view that regulatory approaches should adapt as networks become more decentralized and widely distributed. It provides projects with a clearer progression towards lighter compliance requirements.

Did you know? In previous regulatory disputes, courts have sometimes relied on decades-old investment cases to evaluate crypto tokens, highlighting how existing legal frameworks are being stretched to fit entirely fresh digital markets.

Continued criticism of the CLARITY Act

While the bill provides clarity, skepticism remains. Critics argue that its definitions can leave gaps, particularly in decentralized finance (DeFi), where projects often do not fit well into time-honored regulatory models.

Others argue that investor protections fall compact of established securities standards. Additional concerns center on potential regulatory overlaps, such as how the SEC’s anti-fraud authority would apply in areas where the CFTC has primary jurisdiction, particularly for tokens with hybrid characteristics.

Legal status of the CLARITY Act

US House of Representatives passed the CLARITY Act (H.R. 3633) in July 2025 with bipartisan support. As of January 2026, the bill is awaiting consideration in the U.S. Senate, where it was referred to the Senate Committee on Banking, Housing and Urban Affairs. The legislative process also includes input from the Senate Committee on Agriculture, Nutrition, and Forestry on matters related to CFTC oversight.

Since January 2026, Senate committees have held hearings, published discussion bills, proposed amendments, and advanced versions of broader market structure legislation. However, as issues such as stablecoin viability and investor protections continue to be debated, margins have faced delays and changes. The Senate bills are being reconciled with the bill adopted by the House and there is no final vote in the Senate yet.

The CLARITY Act, if enacted in a compatible form, would constitute the first comprehensive U.S. federal framework for digital asset market structure.

Did you know? Some blockchain networks are now publishing real-time transparency dashboards that show validator concentration, token velocity, and governance participation. Regulators sometimes refer to these metrics when debating whether the network is “sufficiently decentralized.”

Evaluating the CLARITY Act plan

At its core, the CLARITY Act addresses a persistent challenge in the cryptocurrency industry: unclear regulatory boundaries that inhibit innovation and encourage reactive enforcement rather than proactive compliance.

The Act establishes defined asset classes, mandates consistent disclosure, and assigns separate roles to the SEC and CFTC. Its aim is to create a more predictable environment in which market participants understand the applicable rules from the outset.

However, legislation is only the starting point. Implementation, rulemaking, and potential adjustments will determine the true impact of the CLARITY Act. Whether it ultimately delivers the promised transparency will shape U.S. crypto policy and competitiveness for years to come.