The CLARITY Act is landmark U.S. legislation designed to create a comprehensive regulatory framework for digital assets. It aims to end regulatory uncertainty by clearly dividing oversight between the SEC (securities) and CFTC (commodities), defining how tokens are classified, and establishing rules for market participants.

It passed the House of Representatives in July 2025 with strong bipartisan support (294-134) and is currently under negotiation in the Senate Banking Committee (as of May 2026).

Key Definitions

• Digital Asset — Any digital representation of value recorded on a cryptographically secured distributed ledger or similar technology.
• Digital Commodity — A digital asset that is intrinsically linked to a blockchain system. Its value must be derived primarily from the use, functionality, or operation of that blockchain (e.g., for transactions, governance, access to services, or as incentives). It explicitly excludes securities, derivatives, and payment stablecoins.
• Mature Blockchain System — A critical concept in the bill. It refers to a blockchain (and its related digital commodity) that is not controlled by any single person or group of persons under common control. This is the threshold that allows a token to shift from heavier SEC oversight to CFTC treatment.

The Three-Category System for Digital Assets

The Act generally divides assets into three buckets:

1. Investment Contract Assets (SEC oversight) — Early-stage tokens sold as investments, often tied to a team’s efforts.
2. Digital Commodities (CFTC oversight) — Decentralized tokens on mature blockchains.
3. Payment Stablecoins — Handled under separate rules (often involving banking regulators), complementing the GENIUS Act.

The “Mature Blockchain Test” (Most Important Innovation)

This test determines when a network is decentralized enough for its token to be treated as a commodity. Key factors include:

• The blockchain is functional for its intended purpose (transactions, services, governance, validation).
• It uses open-source code.
• It operates under pre-established, transparent rules.
• No single person or group controls it (e.g., no one holds 20% or more of voting power/tokens with unilateral authority to alter the system).

Process: Issuers or decentralized governance systems can certify maturity to the SEC. There is often a 4-year timeline for projects that raised funds via investment contracts. Secondary sales by insiders/affiliates become freer once maturity is achieved.

Regulatory Responsibilities

The bill also creates provisional registration pathways so companies can operate while achieving full compliance.

Other Key Provisions

• Secondary Market Treatment — Tokens originally sold via investment contracts are not automatically treated as securities forever in secondary trading (once decentralized).
• DeFi Safe Harbors — Protections for non-custodial developers, validators, and decentralized protocols.
• Anti-CBDC Measures — Prohibits the Federal Reserve from offering certain CBDC products directly to individuals and restricts use for monetary policy (part of the bill’s “Anti-CBDC Surveillance State Act” title).
• Enforcement & AML — Strengthens requirements for intermediaries while giving law enforcement tools.
• Investor Protections — Tailored disclosure requirements without one-size-fits-all securities rules.

Current Status (May 2026)

• House: Passed.
• Senate: In the Banking Committee. Negotiations continue on stablecoin yield/rewards, DeFi language, and other details. A markup (committee review) is expected in May, but timing remains fluid.

Why It Matters

• Ends the “regulation by lawsuit” era.
• Provides legal certainty for token launches, listings, and operations.
• Balances innovation with consumer protection.
• Aims to position the U.S. as a global leader in crypto/blockchain.

The bill is technical and detailed (over 200 pages), so specifics may evolve during Senate negotiations. For the full official text, refer to Congress.gov (H.R. 3633).