{"id":"clarity-act","title":"CLARITY Act","content":"**Digital Asset Market Clarity Act of 2025** (CLARITY Act), formally titled the **Crypto Legal Accountability, Registration, and Transparency for Investors Act**, is a proposed United States federal law that passed the House of Representatives. As of February 2026, the bill is stalled in the U.S. Senate amid disagreements over key provisions. It is aimed at establishing a regulatory framework for digital assets by clarifying the jurisdiction of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) [\\[11\\]](#cite-id-3iUGHZ2qvp) [\\[13\\]](#cite-id-At7qkciFP6T0yPH8).\n\nThe bill seeks to provide regulatory certainty for the digital asset market, particularly by defining which digital assets are considered \"digital commodities\" and thus fall under the CFTC's purview, while leaving digital assets deemed securities under the SEC's authority [\\[1\\]](#cite-id-DmFNqHA1F7) [\\[3\\]](#cite-id-tpXJwVob54).\n\n## Overview\n\nThe CLARITY Act, introduced in the 119th Congress as H.R.3633, addresses the long-standing debate in the United States regarding the regulatory classification of digital assets. Currently, both the SEC and the CFTC have asserted jurisdiction over various aspects of the digital asset market, leading to regulatory uncertainty often described as \"regulation by enforcement\" by industry participants [\\[1\\]](#cite-id-DmFNqHA1F7) [\\[2\\]](#cite-id-AMku7jhM8E).\n\nThe bill proposes a framework where digital assets intrinsically linked to a [blockchain](https://iq.wiki/wiki/blockchain) system, with value derived from the system's use, would generally be classified as \"digital commodities\" regulated by the CFTC. This classification would exclude traditional securities, certain derivatives, [stablecoins](https://iq.wiki/wiki/stablecoin), banking deposits, and non-commodity assets like [NFTs](https://iq.wiki/wiki/non-fungible-token-nft) [\\[1\\]](#cite-id-DmFNqHA1F7) [\\[8\\]](#cite-id-Xdd9nTi2Hh). Proponents argue that this clarity is essential for fostering innovation, protecting consumers, and preventing the U.S. from falling behind other jurisdictions in the digital asset space. Bill Hughes, senior counsel at Consensys Software, stated that while the CLARITY Act is not perfect, it significantly improves the status quo and is the bill Congress must pass to establish the U.S. as a global leader in digital asset regulation. He emphasized that the bill encourages a shift from blackbox intermediaries to transparent computer networks, which would make markets fairer, more transparent, and more secure, and would also bolster the SEC and CFTC by providing them with a clearer statutory landscape for regulation [\\[5\\]](#cite-id-oj5rlZLq4z). Opponents have raised concerns about potential loopholes and the impact on investor protection, with some Democratic lawmakers describing it as a \"rushed, overly complicated bill\" that could exempt \"some of the riskiest activities\" in crypto [\\[3\\]](#cite-id-tpXJwVob54).\n\nThe legislation aims to provide clear rules for digital asset exchanges, brokers, and dealers, requiring them to register with either the SEC or the CFTC based on the nature of the assets they handle. It also introduces a concept of \"mature [blockchain](https://iq.wiki/wiki/blockchain) systems\" and outlines requirements for initial offerings and secondary market transactions of digital commodities that may have initially involved investment contracts [\\[1\\]](#cite-id-DmFNqHA1F7).\n\n## History\n\nThe Digital Asset Market Clarity Act of 2025 (H.R.3633) was introduced in the U.S. House of Representatives on May 29, 2025, by Representative J. French Hill \\[R-AR-2] and several co-sponsors from both Republican and Democratic parties. The bill was referred to the House Committee on Financial Services and the House Committee on Agriculture. Both committees held meetings and reported the bill with amendments on June 23, 2025 [\\[1\\]](#cite-id-DmFNqHA1F7). The US House of Representatives passed the CLARITY Act on Thursday, July 17, 2025, in a bipartisan vote of 294-134, as a comprehensive market structure bill aimed at ending years of regulatory uncertainty around digital assets [\\[6\\]](#cite-id-IP1Ypvx9Mf) [\\[7\\]](#cite-id-U6fytlfAmn) [\\[12\\]](#cite-id-d5ja2ZtbTF).\n\nIn a September 2025 op-ed, House Financial Services Committee Chairman French Hill stated that with the passage of the CLARITY Act and the enactment of the [GENIUS Act](https://iq.wiki/wiki/genius-act), \"the United States has reversed its hostile approach to the digital asset ecosystem.\" He argued that the U.S. must establish its own clear regulatory framework to avoid ceding ground to regions like Latin America, which has seen grassroots adoption for payments and savings, and Europe, which has implemented the comprehensive Markets in Crypto-Assets (MiCA) regulation. Hill stressed the urgency, stating, \"We must keep pace with the rest of the globe by enacting digital asset market structure by the end of the year\" [\\[12\\]](#cite-id-d5ja2ZtbTF).\n\nThe bill's progression occurred within a period of increased focus on [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) regulation in the U.S. Congress. Republican House leaders had designated the week of July 14, 2025, as \"[Crypto Week](https://iq.wiki/wiki/crypto-week)\" to consider several digital asset-related bills, including the CLARITY Act, the Anti-CBDC Surveillance State Act, and the [GENIUS Act](https://iq.wiki/wiki/genius-act) concerning [stablecoins](https://iq.wiki/wiki/stablecoin) [\\[3\\]](#cite-id-tpXJwVob54).\n\nFollowing its passage in the House on July 17, 2025, the bill was referred to the Senate Banking Committee on September 18, 2025. Despite initial optimism and predictions of passage by the end of 2025, the legislation's momentum stalled, entering a legislative \"logjam\" in early 2026. A planned executive session by the Senate Banking Committee to mark up the bill, scheduled for January 15, 2026, was officially postponed. The primary reason for the stalemate is a significant dispute over the regulation of \"yield\" or interest-like rewards on stablecoins [\\[14\\]](#cite-id-u3O3qh95FZrRE7zX). In an effort to break the deadlock, the White House, through its [Cryptocurrency](https://iq.wiki/wiki/cryptocurrency) Committee, initiated a series of closed-door mediation meetings in February 2026 between stakeholders from the traditional banking and [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) industries. An initial exploratory meeting was held on February 2, 2026, and a second, higher-stakes negotiation is scheduled for February 10, 2026, with reports indicating the White House is pushing for a compromise by the end of the month to prevent the bill from losing legislative traction [\\[13\\]](#cite-id-At7qkciFP6T0yPH8).\n\nLeading crypto trade groups, including the [Blockchain](https://iq.wiki/wiki/blockchain) Association, The Digital Chamber, and the Crypto Council for Innovation, actively lobbied for the passage of the CLARITY Act, sending a joint letter to House leadership on July 11, 2025, urging its advancement [\\[2\\]](#cite-id-AMku7jhM8E). Conversely, some Democratic lawmakers, such as Maxine Waters and Stephen Lynch, announced an \"Anti-Crypto Corruption Week\" in opposition to the Republican legislative push, raising concerns about the industry's influence and potential risks [\\[2\\]](#cite-id-AMku7jhM8E).\n\nOn May 14, 2026, the Senate Banking Committee held a key markup to consider dozens of amendments to the CLARITY Act and voted to advance the bill out of committee. The measure cleared on a bipartisan 15–9 vote following a contentious but ultimately conciliatory session, and now proceeds to the full Senate for further consideration [\\[15\\]](#cite-id-pP4CuOboLJI18K6L) [\\[16\\]](#cite-id-CpT8BdtzF9jGHZQI).\n\nDemocratic senators continued to criticize the legislation, with Sen. Elizabeth Warren among those highlighting unresolved concerns. Lawmakers indicated that disputes over stablecoin yield/rewards programs remained a central sticking point even as the bill moved forward [\\[17\\]](#cite-id-6MLoYguwfpL1aTmi) [\\[18\\]](#cite-id-ZfDfn6pB2ILWPFvD).\n\n## Key Provisions\n\nThe CLARITY Act introduces several key provisions aimed at establishing a comprehensive regulatory framework for digital assets in the United States. The bill amends foundational statutes like the Securities Act, the Securities Exchange Act, and the Commodity Exchange Act to codify its new framework [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n\n### Digital Asset Classification\n\nA core component of the bill is the creation of a functional framework for classifying digital assets to determine regulatory oversight. The legislation would create statutory definitions for different classes of digital assets, distinguishing between digital commodities, digital securities, and payment tokens [\\[11\\]](#cite-id-3iUGHZ2qvp) [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n\n* **Digital Assets**: Defined broadly as natively electronic assets issued and transferred using distributed ledger technology, representing value, rights, or access [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n* **Digital Commodities**: These are digital assets that are part of a decentralized system and do not confer rights to profits, governance, or financial claims against an issuer. [Bitcoin](https://iq.wiki/wiki/bitcoin) and [Ethereum](https://iq.wiki/wiki/ethereum) are commonly cited examples. These assets would fall under the jurisdiction of the **CFTC** [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n* **Restricted Digital Assets**: These are digital assets that function as investment contracts or provide financial rights, such as a claim on a company's profits. These assets would remain under the jurisdiction of the **SEC** [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n* **Permitted Payment Stablecoins**: Fiat-redeemable digital assets designed for payments. These would be primarily regulated under the framework of the [GENIUS Act](https://iq.wiki/wiki/genius-act), with potential joint oversight from the SEC and CFTC [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n\nThe bill also establishes a certification pathway for issuers to get a formal determination from the SEC or CFTC on their asset's classification, as well as a [safe](https://iq.wiki/wiki/safe) harbor for assets issued before the Act's enactment [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n\n### Regulatory Framework for Digital Commodities (CFTC)\n\nTitle II and Title IV of the Act establish the CFTC's authority over the digital commodity spot market [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n\n* **Registration of Intermediaries**: Digital commodity brokers, dealers, and trading facilities would be required to register with the CFTC. These platforms must adhere to standards for asset segregation, fair trading, anti-manipulation, AML/KYC programs, price transparency, and cybersecurity [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n* **Exempt Offering for Issuers**: The Act introduces an exempt offering regime allowing digital commodity issuers to raise up to $75 million annually without full securities registration. This exemption is contingent on meeting detailed disclosure requirements and being tied to a [blockchain](https://iq.wiki/wiki/blockchain) system that is \"mature\" or expected to become mature within four years [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n\n### Regulatory Framework for Restricted Digital Assets (SEC)\n\nTitle III of the Act confirms the SEC's existing authority over digital assets that are deemed securities [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n\n* **Intermediary Registration**: Brokers, dealers, alternative trading systems (ATSs), and clearing agencies that handle Restricted Digital Assets must register with the SEC under the Securities Exchange Act of 1934 and comply with existing rules for customer protection, market integrity, and disclosure [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n* **Issuer Compliance**: Issuers of Restricted Digital Assets must comply with the registration requirements of the Securities Act unless they qualify for an existing exemption. The CLARITY Act does not create a new exempt offering pathway for these security-like assets, but it does direct the SEC to establish a new registration framework tailored for digital asset issuers and mandates enhanced disclosure standards for crypto exchanges [\\[8\\]](#cite-id-Xdd9nTi2Hh) [\\[11\\]](#cite-id-3iUGHZ2qvp).\n\n### Other Provisions\n\n* **Mature Blockchain Systems**: The legislation introduces the concept of a \"mature [blockchain](https://iq.wiki/wiki/blockchain) system,\" defined as a [blockchain](https://iq.wiki/wiki/blockchain) system and its related digital commodity not controlled by any single person or group under common control. The bill outlines criteria for a [blockchain](https://iq.wiki/wiki/blockchain) system to be deemed mature and establishes a process for certification with the SEC [\\[1\\]](#cite-id-DmFNqHA1F7).\n* **Custody of Digital Assets**: The Act includes provisions related to the custody of digital assets by registered entities, requiring the use of \"qualified digital asset custodians\" and outlining standards for such custodians. It also calls for federal custody and safeguarding rules to protect consumer assets held on trading platforms, provisions lawmakers believe could have prevented major collapses like FTX in 2022. Additionally, the House-passed version of the bill includes language affirming a consumer's right to maintain their own hardware or software wallets for self-custody and to conduct direct peer-to-peer transactions [\\[1\\]](#cite-id-DmFNqHA1F7) [\\[11\\]](#cite-id-3iUGHZ2qvp) [\\[14\\]](#cite-id-u3O3qh95FZrRE7zX).\n* [**Decentralized Finance**](https://iq.wiki/wiki/defi): The bill includes provisions to exclude certain decentralized finance activities from being subject to the Act's registration requirements, focusing on activities like compiling transactions, providing computational work, or developing software, while retaining anti-fraud and anti-manipulation authorities [\\[1\\]](#cite-id-DmFNqHA1F7).\n* **Implementation and Studies**: The bill directs the SEC and CFTC to issue final rules within 270 days of enactment. It also mandates various studies on topics such as DeFi, NFTs, financial literacy, and illicit finance [\\[1\\]](#cite-id-DmFNqHA1F7) [\\[8\\]](#cite-id-Xdd9nTi2Hh).\n\n## 2026 Senate Draft\n\nThe version considered by the Senate in 2026 expanded upon and amended the House-passed version of H.R. 3633. The revised framework incorporated provisions developed through the Senate Banking and Agriculture committees and added rules addressing [stablecoin](https://iq.wiki/wiki/stablecoin) rewards, government ethics, illicit finance, [decentralized finance](https://iq.wiki/wiki/defi), software developers, and consumer protection. Because the Senate text remained subject to negotiation, its provisions did not represent enacted law as of July 2026.  [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia)  [\\[27\\]](#cite-id-AVSJR5GTm9jVPhCS) \n\n### Ethics and Conflict-of-Interest Provisions\n\nThe revised Senate draft released on July 22, 2026, introduced restrictions intended to prevent senior public officials from using their positions to profit from [digital asset](https://iq.wiki/wiki/digital-assets) ventures. The provision would prohibit covered individuals, including the president, vice president, members of Congress, federal judges, and their spouses, from issuing or sponsoring a digital asset in exchange for compensation. The restriction would remain in effect until January 2029. [\\[20\\]](#cite-id-njXJFZ1B8kPmtX8h) \n\nThe draft would also require covered officials to divest certain [digital asset](https://iq.wiki/wiki/digital-assets) holdings or place them in a qualifying blind trust. Enforcement authority would rest with the United States Attorney General and the Department of Justice. Reported penalties included civil fines of up to $250,000 for each violation per day, the disgorgement of profits, and an additional penalty based on the compensation received.  [\\[20\\]](#cite-id-njXJFZ1B8kPmtX8h) \n\nThe ethics language remained disputed after its release. Democratic negotiators argued that its enforcement structure and other provisions required strengthening, while some lawmakers favored allowing state attorneys general to act when the Department of Justice declined to bring a case. [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia)  Commentary surrounding the proposal also argued that adopting crypto-specific restrictions highlighted the absence of comparably comprehensive restrictions on stock trading and other financial interests held by public officials.  [\\[21\\]](#cite-id-i9UnCgMPZMfW0DfJ) \n\n### Stablecoin Rewards\n\nSection 404 of the Senate proposal distinguished between passive [stablecoin](https://iq.wiki/wiki/stablecoin) yield and rewards connected to customer activity. Under the proposed framework, a platform would generally be prohibited from paying interest or rewards solely because a customer held a stablecoin balance. Rewards connected to activities such as payments, transactions, trading, collateral provision, liquidity provision, or other platform use could remain permissible. [\\[26\\]](#cite-id-gBB8LmIBtOrKrSMZ) \n\nBanking groups supported restrictions on passive stablecoin yield, arguing that crypto platforms could otherwise offer products comparable to bank deposits without being subject to equivalent capital, insurance, and supervisory requirements. They also warned that higher stablecoin returns could draw deposits away from traditional banks. Crypto industry participants argued that a broad prohibition would reduce competition and prevent consumers from receiving returns on digital assets held through exchanges and other platforms.  [\\[25\\]](#cite-id-kUgRpobn3PjR0CXw)  [\\[26\\]](#cite-id-gBB8LmIBtOrKrSMZ) \n\nThe distinction between passive and activity-based rewards raised questions about how the provision would apply to new financial products. CryptoSlate identified the partnership between [Coinbase](https://iq.wiki/wiki/coinbase) and [Ethena](https://iq.wiki/wiki/ethena) as a possible example. Under the proposed arrangement, [USDC](https://iq.wiki/wiki/usdc) could be directed into lending, collateral, liquidity, or trading strategies through Ethena rather than earning rewards solely from being held in an account. Whether similar arrangements would comply with Section 404 would depend on the final statutory language and subsequent regulatory interpretation.  [\\[26\\]](#cite-id-gBB8LmIBtOrKrSMZ) \n\n### Consumer Protection, Illicit Finance and Market Integrity\n\nConsumer protection and illicit finance remained significant areas of disagreement in the Senate negotiations. A group of Democratic senators argued that the July 22 draft required stronger provisions addressing consumer protection, sanctions and illicit finance, conflicts of interest, and the integrity of digital asset markets. These senators were considered important to the bill’s prospects because Republican supporters would require Democratic votes to reach the Senate’s 60-vote threshold. [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia)  [\\[22\\]](#cite-id-dlwronSdn8RBBJtJ) \n\nSupporters of the legislation argued that registration, customer-asset segregation, disclosure, custody, anti-fraud, and anti-manipulation requirements would provide protections that were absent from the existing digital asset market. Critics maintained that exemptions and limitations within the draft could leave some activities outside sufficiently strong regulatory or enforcement requirements. [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia) \n\n### Non-Custodial Developers and Law Enforcement\n\nThe treatment of non-custodial blockchain developers also became a point of dispute. Proposed protections under Section 604 were intended to prevent developers, validators, software maintainers, and providers of non-custodial infrastructure from automatically being classified as money transmitters when they did not control customer funds. [\\[27\\]](#cite-id-AVSJR5GTm9jVPhCS) \n\nSupporters argued that publishing software or maintaining decentralized infrastructure should not, by itself, subject a developer to the same obligations as a financial intermediary that takes custody of customer assets. Law-enforcement representatives expressed concern that broadly written exemptions could impair criminal investigations or create gaps in anti-money-laundering enforcement. Senators involved in the negotiations sought language that would protect developers while preserving authorities used to investigate illicit financial activity. [\\[27\\]](#cite-id-AVSJR5GTm9jVPhCS) \n\n## Regulatory Jurisdiction\n\nA central tenet of the CLARITY Act is the division of regulatory authority over digital assets between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The bill aims to provide a clearer distinction than currently exists, where both agencies have asserted jurisdiction, leading to overlapping oversight and enforcement actions.\n\nUnder the proposed framework, digital assets that meet the definition of a \"digital commodity\" would primarily fall under the regulatory purview of the CFTC. This includes establishing registration requirements and core principles for digital commodity exchanges, brokers, and dealers. The CFTC would have exclusive jurisdiction over cash or spot market transactions in digital commodities conducted on or through registered entities [\\[1\\]](#cite-id-DmFNqHA1F7).\n\nThe SEC would retain jurisdiction over digital assets that qualify as securities under existing securities laws. This includes investment contracts involving digital commodities, particularly during the initial offering phase before a [blockchain](https://iq.wiki/wiki/blockchain) system is deemed \"mature\" [\\[1\\]](#cite-id-DmFNqHA1F7). The bill also grants the SEC anti-fraud and anti-manipulation authority over permitted payment stablecoins and certain digital commodity transactions when brokered, traded, or custodied by SEC-registered entities like brokers, dealers, or alternative trading systems [\\[1\\]](#cite-id-DmFNqHA1F7).\n\nThe Act requires the SEC and CFTC to engage in joint rulemakings on various aspects, including further defining key terms, handling mixed digital asset transactions (those involving both a digital commodity and a security), and establishing procedures for delisting assets if their trading is deemed inconsistent with regulations [\\[1\\]](#cite-id-DmFNqHA1F7). A memorandum of understanding between the two agencies is also mandated to ensure consistent requirements and avoid duplicative supervision for entities registered with both commissions or notice-registered with the CFTC while primarily regulated by the SEC [\\[1\\]](#cite-id-DmFNqHA1F7).\n\n## Industry Support and Opposition\n\nThe CLARITY Act has garnered significant support from various participants in the [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) industry. Leading crypto trade associations, including the [Blockchain](https://iq.wiki/wiki/blockchain) Association, the Chamber of Digital Commerce, the Crypto Council for Innovation, and [Coinbase](https://iq.wiki/wiki/coinbase)'s lobbying arm, Stand With Crypto, have actively advocated for the bill's passage. They argue that the legislation provides much-needed regulatory certainty, which is crucial for fostering innovation and enabling the digital asset industry to thrive in the United States [\\[2\\]](#cite-id-AMku7jhM8E) [\\[3\\]](#cite-id-tpXJwVob54). Industry proponents believe that a clear legal framework would encourage greater institutional adoption and investment [\\[4\\]](#cite-id-2hiiEyPE2Z).\n\nHowever, the bill has also faced opposition, particularly from some Democratic lawmakers and, more recently, from the traditional banking sector, which has become the central hurdle to the bill's progress in the Senate. The primary conflict revolves around yield-bearing stablecoins. The banking industry views these products as an \"existential threat\" that could create an \"unregulated parallel banking\" system. They warn that the higher returns offered by stablecoins (~3.5%) compared to average bank deposits (~0.1%) could lead to massive capital flight from traditional banks, potentially destabilizing the U.S. economy. This concern was reportedly amplified by a U.S. Treasury scenario analysis estimating a potential deposit drawdown of $6.6 trillion [\\[13\\]](#cite-id-At7qkciFP6T0yPH8) [\\[14\\]](#cite-id-u3O3qh95FZrRE7zX).\n\nConversely, the crypto industry argues that a prohibition on stablecoin interest would stifle financial innovation, limit consumer choice, and damage America's competitive position in decentralized finance. They frame these returns as \"rewards\" or loyalty benefits rather than interest. High-level meetings between lawmakers and crypto executives from firms like [Coinbase](https://iq.wiki/wiki/coinbase), [Ripple](https://iq.wiki/wiki/ripple-labs), [Kraken](https://iq.wiki/wiki/kraken), and [a16z](https://iq.wiki/wiki/a16z-crypto) have continued in an effort to find a path forward for legislation [\\[13\\]](#cite-id-At7qkciFP6T0yPH8) [\\[10\\]](#cite-id-IdlZ3Q6xOF). Democratic lawmakers have also raised separate concerns. Maxine Waters, a top Democrat in the House Financial Services Committee, described the CLARITY Act as a \"rushed, overly complicated bill\" that would exempt \"some of the riskiest activities\" in crypto and legitimize what she called \"Trump’s crypto con\" [\\[3\\]](#cite-id-tpXJwVob54).\n\nFollowing the release of the July 2026 draft, crypto industry representatives renewed calls for the legislation to pass. In a July 22 opinion article, [a16z crypto](https://iq.wiki/wiki/a16z-crypto) founder [Chris Dixon](https://iq.wiki/wiki/chris-dixon) argued that the bill would provide rules for blockchain networks, strengthen custody and customer-asset segregation requirements, and create a clearer path for institutional participation. He acknowledged that the legislation was not perfect but described it as preferable to continuing without a comprehensive federal framework. [\\[22\\]](#cite-id-dlwronSdn8RBBJtJ) \n\nRobinhood Senior Vice President of Crypto [Johann Kerbrat](https://iq.wiki/wiki/johann-kerbrat) also argued that disagreement over stablecoin rewards should not prevent the broader market-structure legislation from advancing. Kerbrat criticized efforts to prohibit stablecoin customers from receiving yield and presented the issue as one involving consumer choice and competition between crypto platforms and traditional financial institutions. [\\[25\\]](#cite-id-kUgRpobn3PjR0CXw) \n\nBanking-sector opposition remained focused on the treatment of stablecoin rewards. Banks argued that permitting exchanges or affiliated companies to offer interest-equivalent rewards could circumvent restrictions imposed on [stablecoin](https://iq.wiki/wiki/stablecoin) issuers and draw deposits away from regulated banks. The crypto industry maintained that activity-based rewards, lending, and other on-chain strategies were distinct from passive deposit interest and should remain permissible. [\\[26\\]](#cite-id-gBB8LmIBtOrKrSMZ) \n\nDemocratic opposition to the July 22 draft extended beyond [stablecoin](https://iq.wiki/wiki/stablecoin) rewards. A group of senators who had participated in bipartisan negotiations said the proposal required stronger provisions concerning government ethics, consumer protection, illicit finance, conflicts of interest, and market integrity. Their statement indicated that the inclusion of an ethics section had not, by itself, secured sufficient Democratic support for a Senate vote. [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia) \n\n## Legislative Outlook\n\nAs of July 22, 2026, the CLARITY Act remained eligible for Senate floor consideration but had not received a floor vote. Majority Leader John Thune’s office indicated that Senate leadership still intended to move the bill forward, although the chamber was scheduled to leave Washington after August 7 for its summer recess. [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia) \n\nThe legislation would require 60 Senate votes to advance. Because Republican senators could not reach that threshold alone, its passage depended on support from a group of Democratic senators. Angela Alsobrooks and Ruben Gallego had supported the legislation during the Senate Banking Committee vote, but their committee votes were not unconditional commitments to support the final bill on the Senate floor. [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia)  [\\[27\\]](#cite-id-AVSJR5GTm9jVPhCS) \n\nInitial reports described the White House’s acceptance of an ethics proposal as a major breakthrough and suggested that the legislation was close to resolving its final principal dispute. [\\[23\\]](#cite-id-EtPbTcmJGtCNcFIs)  The response from Democratic negotiators after the July 22 draft was released showed that several questions remained unresolved, including ethics enforcement, consumer protection, illicit finance, conflicts of interest, market integrity, [stablecoin](https://iq.wiki/wiki/stablecoin) rewards, and protections for non-custodial software developers. [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia)  [\\[27\\]](#cite-id-AVSJR5GTm9jVPhCS) \n\nFailure to act before the August recess could further narrow the bill’s legislative window as Congress approached the 2026 midterm elections. Senator Cynthia Lummis and other supporters warned that a lengthy delay could push comprehensive digital asset market-structure legislation into a future Congress, where the legislative process might have to begin again. [\\[27\\]](#cite-id-AVSJR5GTm9jVPhCS) \n\n## Potential Impact\n\nThe potential impact of the CLARITY Act, or a successor bill emerging from the Senate, is significant for the digital asset market in the United States. If enacted, the legislation would fundamentally alter the regulatory landscape by providing a statutory definition for \"digital commodity\" and delineating the roles of the SEC and CFTC [\\[2\\]](#cite-id-AMku7jhM8E) [\\[3\\]](#cite-id-tpXJwVob54). One of the primary anticipated impacts is increased regulatory certainty, which is expected to encourage greater participation from institutional investors [\\[4\\]](#cite-id-2hiiEyPE2Z).\n\nEven if enacted, the CLARITY Act would require extensive implementation by federal regulators. The SEC and CFTC would need to define key terms, establish registration procedures, coordinate supervision, and issue rules governing digital asset intermediaries and stablecoin rewards. Concerns were also raised about whether vacancies and limited staffing at the regulatory agencies could delay implementation or expose new rules to legal challenges. [\\[27\\]](#cite-id-AVSJR5GTm9jVPhCS) \n\nSupporters argued that the legislation would reduce uncertainty surrounding asset classification, encourage investment in United States [blockchain](https://iq.wiki/wiki/blockchain) infrastructure, and provide clearer custody, segregation, registration, and disclosure requirements. They also argued that a federal framework could support institutional adoption and allow the United States to compete with jurisdictions that had already adopted comprehensive digital asset rules. [\\[22\\]](#cite-id-dlwronSdn8RBBJtJ) \n\nCritics argued that regulatory certainty alone would not ensure sufficient protection for consumers or the financial system. Democratic negotiators maintained that the July 2026 draft required stronger ethics, consumer-protection, illicit-finance, conflict-of-interest, and market-integrity provisions. [\\[19\\]](#cite-id-3j9PUiP2dZyGq5Ia) \n\nThe treatment of stablecoin rewards could have a direct effect on exchanges, stablecoin issuers, banks, and consumers. A prohibition on passive rewards could reduce or eliminate programs that pay customers solely for holding [stablecoins](https://iq.wiki/wiki/stablecoin). At the same time, the continued allowance of activity-based rewards could encourage platforms to develop lending, trading, payment, collateral, and liquidity products designed to fall outside the passive-yield restriction. [\\[25\\]](#cite-id-kUgRpobn3PjR0CXw)  [\\[26\\]](#cite-id-gBB8LmIBtOrKrSMZ) ","summary":"The Digital Asset Market Clarity Act of 2025 (CLARITY Act) is proposed U.S. legislation aiming to provide regulatory clarity for digital assets,...","images":[{"id":"QmaqmkLszuSrRrTMfs9r3RQ2NUB7AYyLagAfgAZ8iqpcYi","type":"image/jpeg, image/png"}],"categories":[{"id":"glossary","title":"Glossary"}],"tags":[],"media":[{"id":"QmVi438s2W4xjexjpb8gs2pfpCNiHFdvUiWafK8HSj2hY4","size":null,"name":null,"type":"GALLERY","source":"IPFS_IMG"},{"id":"QmUuujiP34wJYHJYG6fXgkXDBpGrtTTvuBuQpdNeEYBcqn","size":null,"name":null,"type":"GALLERY","source":"IPFS_IMG"}],"metadata":[{"id":"references","value":"[{\"id\":\"DmFNqHA1F7\",\"url\":\"https://www.congress.gov/bill/119th-congress/house-bill/3633/text\",\"description\":\"Full text of H.R.3633\",\"timestamp\":1752578831894},{\"id\":\"AMku7jhM8E\",\"url\":\"https://cryptonews.com/news/key-crypto-trade-groups-call-for-clarity-acts-passage/\",\"description\":\"Crypto trade groups push for CLARITY Act\",\"timestamp\":1752578831894},{\"id\":\"tpXJwVob54\",\"url\":\"https://cointelegraph.com/news/crypto-lobby-urges-congress-pass-clarity-act\",\"description\":\"Crypto lobby urges Congress to pass CLARITY Act\",\"timestamp\":1752578831894},{\"id\":\"2hiiEyPE2Z\",\"url\":\"https://www.ainvest.com/news/clarity-act-boost-institutional-crypto-adoption-50-2507/\",\"description\":\"CLARITY Act Could Boost Institutional Crypto Adoption 50%\",\"timestamp\":1752578831894},{\"id\":\"oj5rlZLq4z\",\"url\":\"https://cointelegraph.com/news/clarity-isn-t-perfect\",\"description\":\"CLARITY Act isn’t perfect, but it’s the bill US Congress must pass this summer\",\"timestamp\":1752660370136},{\"id\":\"IP1Ypvx9Mf\",\"url\":\"https://www.coindesk.com/policy/2025/07/17/us-house-passes-landmark-crypto-market-structure-bill-clarity-act/\",\"description\":\"US House passes landmark crypto market structure bill\",\"timestamp\":1752782449006},{\"id\":\"U6fytlfAmn\",\"url\":\"https://cointelegraph.com/news/crypto-clarity-act-passes-house-crypto-week-continues\",\"description\":\"Cointelegraph report\",\"timestamp\":1752782585314},{\"id\":\"Xdd9nTi2Hh\",\"url\":\"https://mcmillan.ca/insights/publications/overview-and-analysis-of-the-clarity-act/\",\"description\":\"Overview and Analysis of the CLARITY Act\",\"timestamp\":1758221235688},{\"id\":\"GGu2X69e6K\",\"url\":\"https://www.coindesk.com/news-analysis/2025/09/16/the-clarity-act-is-probably-dead-here-s-what-s-next-for-its-successor-legislation\",\"description\":\"The Clarity Act Is Probably Dead\",\"timestamp\":1758221235688},{\"id\":\"IdlZ3Q6xOF\",\"url\":\"https://cointelegraph.com/news/coinbase-ceo-says-next-major-crypto-bill-freight-train\",\"description\":\"Coinbase CEO says next major crypto bill freight train\",\"timestamp\":1758221235688},{\"id\":\"3iUGHZ2qvp\",\"url\":\"https://www.ibtimes.com/congress-grapples-clarity-act-overhaul-us-crypto-market-rules-3783638\",\"description\":\"Congress Grapples With CLARITY Act\",\"timestamp\":1758221551571},{\"id\":\"d5ja2ZtbTF\",\"url\":\"https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=410871\",\"description\":\"Chairman Hill op-ed on crypto legislation\",\"timestamp\":1758221551571},{\"id\":\"At7qkciFP6T0yPH8\",\"url\":\"https://www.cryptopolitan.com/white-house-to-hold-bank-crypto-talks-clarity-act/\",\"description\":\"White House mediates bank-crypto talks on CLARITY Act\",\"timestamp\":1770697933103},{\"id\":\"u3O3qh95FZrRE7zX\",\"url\":\"https://cryptoslate.com/white-house-meeting-can-unfreeze-the-clarity-act-this-week-but-crypto-rewards-liklely-to-be-the-price/\",\"description\":\"Crypto rewards controversy stalls CLARITY Act\",\"timestamp\":1770697933103},{\"id\":\"pP4CuOboLJI18K6L\",\"url\":\"https://www.coindesk.com/policy/2026/05/14/clarity-act-clears-u-s-senate-committee-on-its-way-to-a-final-test-in-congress\",\"description\":\"Clarity Act clears Senate committee\",\"timestamp\":1778842666701},{\"id\":\"CpT8BdtzF9jGHZQI\",\"url\":\"https://x.com/CoinDesk/status/2054969805115912564\",\"description\":\"CoinDesk: 15–9 committee vote\",\"timestamp\":1778842666701},{\"id\":\"6MLoYguwfpL1aTmi\",\"url\":\"https://www.coindesk.com/policy/2026/05/14/u-s-senators-lament-failure-to-win-bipartisan-support-yet-on-crypto-clarity-act\",\"description\":\"Senators lament lack of bipartisan support\",\"timestamp\":1778842666701},{\"id\":\"ZfDfn6pB2ILWPFvD\",\"url\":\"https://www.coindesk.com/policy/2026/05/14/live-senate-banking-committee-holds-key-hearing-to-advance-clarity-act\",\"description\":\"Live coverage of Senate hearing\",\"timestamp\":1778842666701},{\"id\":\"3j9PUiP2dZyGq5Ia\",\"description\":\"CoinDesk — “Key Democratic lawmakers say crypto Clarity Act ‘falls short’ on ethics, other issues”\",\"timestamp\":1784771059679,\"url\":\"https://www.coindesk.com/policy/2026/07/22/key-democratic-lawmakers-say-crypto-clarity-act-falls-short-on-ethics-other-issues\"},{\"id\":\"njXJFZ1B8kPmtX8h\",\"description\":\"Senate crypto bill would ban federal officials — including presidents — from issuing digital assets\",\"timestamp\":1784771062895,\"url\":\"https://www.cnbc.com/2026/07/22/senate-crypto-bill-would-ban-federal-officials-from-issuing-digital-assets.html\"},{\"id\":\"i9UnCgMPZMfW0DfJ\",\"description\":\"The CLARITY Act Ethics Clause Highlights The Need For Better Stock Rules\",\"timestamp\":1784771087664,\"url\":\"https://www.forbes.com/sites/digital-assets/2026/07/22/the-clarity-act-ethics-clause-highlights-the-need-for-better-stock-rules/\"},{\"id\":\"dlwronSdn8RBBJtJ\",\"description\":\"It's time to pass the CLARITY Act\\n\",\"timestamp\":1784771106261,\"url\":\"https://a16zcrypto.com/posts/article/clarity-act-time-to-pass\"},{\"id\":\"EtPbTcmJGtCNcFIs\",\"description\":\"The CLARITY Act Is Now One Clause Away From Passing: Should XRP Holders Celebrate?\",\"timestamp\":1784771126211,\"url\":\"https://finance.yahoo.com/markets/crypto/articles/clarity-act-now-one-clause-103040911.html\"},{\"id\":\"qjOuIPOehwbqZ7E9\",\"description\":\"BREAKING: CLARITY Act Advances To Senate Calendar As Floor Vote Nears\\n\",\"timestamp\":1784771165744,\"url\":\"https://coingape.com/clarity-act-advances-to-senate-calendar-as-floor-vote-nears/\"},{\"id\":\"kUgRpobn3PjR0CXw\",\"description\":\"Why the CLARITY Act is so important for stablecoin customers & issuers\",\"timestamp\":1784771183777,\"url\":\"https://finance.yahoo.com/video/why-clarity-act-important-stablecoin-173000742.html\"},{\"id\":\"gBB8LmIBtOrKrSMZ\",\"description\":\"Banks pushed Congress to kill stablecoin yield with CLARITY Act – Coinbase may have found the loophole\",\"timestamp\":1784771218979,\"url\":\"https://cryptoslate.com/banks-pushed-congress-to-kill-stablecoin-yield-with-clarity-act-coinbase-may-have-found-the-loophole/\"},{\"id\":\"AVSJR5GTm9jVPhCS\",\"description\":\"Two July Windows Left: The CLARITY Act’s Senate Fight and What Failure Means\",\"timestamp\":1784771238678,\"url\":\"https://cryptonews.com/news/clarity-act-senate-july-deadline-failure/\"}]"},{"id":"previous_cid","value":"\"https://ipfs.everipedia.org/ipfs/QmT73HWKFRJqwxfMqndbydvcFLsFuzz7H7RgTxWPjXkqkA\""},{"id":"commit-message","value":"\"Updated wiki content\""},{"id":"previous_cid","value":"QmT73HWKFRJqwxfMqndbydvcFLsFuzz7H7RgTxWPjXkqkA"}],"events":[],"user":{"id":"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889"},"author":{"id":"0x8AF7a19a26d8FBC48dEfB35AEfb15Ec8c407f889"},"operator":{"id":"0x1E23b34d3106F0C1c74D17f2Cd0F65cdb039b138"},"language":"en","version":1,"linkedWikis":{"blockchains":[],"founders":[],"speakers":[]},"recentActivity":"{\"items\":[{\"id\":\"10252cb3-cb59-47bf-b788-570c10eb1d54\",\"title\":\"CLARITY Act\",\"description\":\"The Digital Asset Market Clarity Act of 2025 (CLARITY Act) is proposed U.S. legislation aiming to provide regulatory clarity for digital assets,...\",\"timestamp\":\"2026-02-10T04:47:51.877Z\",\"category\":\"Cryptocurrencies\",\"status\":{\"icon\":\"RiGlobalLine\",\"label\":\"Wiki Updated\",\"iconClassName\":\"text-green-500\"},\"user\":{\"name\":\"0x8AF7a19a26d8FBC48dEfB35AEfb15Ec8c407f889\",\"address\":\"0x1E23b34d3106F0C1c74D17f2Cd0F65cdb039b138\"},\"button\":{\"label\":\"View Summary\",\"icon\":\"RiFileTextLine\"},\"summarySections\":[{\"title\":\"Title\",\"subtitle\":\"The capitalization of the title was adjusted.\",\"variant\":\"modified\",\"changeCount\":1,\"changes\":[\"Changed title from 'cryptocurrencies' to 'Cryptocurrencies'.\"]},{\"title\":\"Introduction\",\"subtitle\":\"The introduction was updated to reflect the bill's current legislative status.\",\"variant\":\"modified\",\"changeCount\":1,\"changes\":[\"Updated the first paragraph to state that as of February 2026, the bill is stalled in the U.S. Senate due to disagreements over key provisions [[11]](#cite-id-3iUGHZ2qvp) [[13]](#cite-id-At7qkciFP6T0yPH8).\"]},{\"title\":\"History\",\"subtitle\":\"The bill's legislative history was updated with events from late 2025 and early 2026.\",\"variant\":\"modified\",\"changeCount\":4,\"changes\":[\"Removed details about the Senate drafting a competing framework and optimistic statements from industry figures in September 2025.\",\"Added that the bill was referred to the Senate Banking Committee on September 18, 2025, and its momentum stalled in early 2026.\",\"Added that a planned Senate committee markup was postponed in January 2026 due to a dispute over regulating stablecoin 'yield' [[14]](#cite-id-u3O3qh95FZrRE7zX).\",\"Added information about the White House initiating mediation meetings in February 2026 between banking and crypto stakeholders to break the deadlock [[13]](#cite-id-At7qkciFP6T0yPH8).\"]},{\"title\":\"Custody of Digital Assets\",\"subtitle\":\"A provision about the consumer's right to self-custody was added.\",\"variant\":\"modified\",\"changeCount\":1,\"changes\":[\"Added language from the House-passed bill affirming a consumer's right to maintain their own hardware or software wallets for self-custody and to conduct peer-to-peer transactions [[1]](#cite-id-DmFNqHA1F7) [[11]](#cite-id-3iUGHZ2qvp) [[14]](#cite-id-u3O3qh95FZrRE7zX].\"]},{\"title\":\"Industry Support and Opposition\",\"subtitle\":\"The section was significantly revised to focus on new opposition from the traditional banking sector.\",\"variant\":\"modified\",\"changeCount\":3,\"changes\":[\"Reframed the opposition to center on the traditional banking industry's view of yield-bearing stablecoins as an 'existential threat' that could create a 'parallel banking' system.\",\"Added details about the banking sector's concern over a potential $6.6 trillion deposit drawdown, reportedly from a U.S. Treasury analysis [[13]](#cite-id-At7qkciFP6T0yPH8) [[14]](#cite-id-u3O3qh95FZrRE7zX).\",\"Removed previous details about lobbying meetings from September 2025.\"]},{\"title\":\"Potential Impact\",\"subtitle\":\"Added context comparing the U.S. legislative debate to the EU's MiCA regulation.\",\"variant\":\"modified\",\"changeCount\":3,\"changes\":[\"Added a new paragraph discussing the EU's Markets in Crypto-Assets (MiCA) framework as a precedent, noting its restriction on interest-like benefits for stablecoins.\",\"Mentioned the real-world consequence of MiCA, such as Coinbase halting its USDC rewards program in affected regions.\",\"Added that the CLARITY Act's fate now hinges on a compromise on stablecoin rewards, with a potential outcome being a framework allowing activity-based rewards but not passive, balance-based returns [[14]](#cite-id-u3O3qh95FZrRE7zX].\"]},{\"title\":\"Images\",\"subtitle\":\"A new media file was added to the wiki.\",\"variant\":\"added\",\"changeCount\":1,\"changes\":[\"A new image was added.\"]},{\"title\":\"References\",\"subtitle\":\"The list of references was updated, adding 2 new sources and removing 3.\",\"variant\":\"modified\",\"changeCount\":5,\"changes\":[\"Added reference: 'White House mediates bank-crypto talks on CLARITY Act'.\",\"Added reference: 'Crypto rewards controversy stalls CLARITY Act'.\",\"Removed reference with ID 'nE1KxOq19F': 'Coinbase CEO calls crypto bill a freight train'.\",\"Removed reference with ID '5QfX0KWbS7': 'Coinbase CEO Bullish on Clarity Act'.\",\"Removed reference with ID 'XurHBAtj71': 'Cardano founder provides update on CLARITY Act talks'.\"]},{\"title\":\"Tags\",\"subtitle\":\"The order of tags was updated.\",\"variant\":\"modified\",\"changeCount\":1,\"changes\":[\"The 'Government' and 'Regulations' tags were reordered.\"]},{\"title\":\"Metadata\",\"subtitle\":\"Internal wiki metadata fields were updated.\",\"variant\":\"modified\",\"changeCount\":4,\"changes\":[\"Updated 'words-changed' to '2957'.\",\"Updated 'percent-changed' to '75.37'.\",\"Updated 'blocks-changed' to 'content, tags, image'.\",\"Updated 'wiki-score' to '77'.\"]}]}]}"}