Clarity Act 2026: Everything You Should Know

The Digital Asset Market CLARITY Act of 2025 is a U.S. market structure bill designed to draw a clearer line between when a digital asset is treated as a security versus a commodity. Moreover, it’s meant to formalize how crypto trading venues and intermediaries register and operate under federal oversight.

One of the core themes is splitting responsibilities between the SEC and the CFTC. The CRS summary describes the bill as giving the CFTC a central role in regulating “digital commodities” and related intermediaries.

Also, it will preserve parts of SEC authority over certain primary market activities, paired with a new exemption pathway for some fundraising with disclosure requirements.

The bill also introduces concepts meant to address the “when does decentralization matter” question. Including criteria tied to blockchain maturity and whether a network is “controlled” by a person or coordinated group.

Process-wise, the House version (H.R. 3633) passed the House in July 2025 and was then referred to the Senate later in 2025.

Why Crypto Needs It

The simplest reason is that the U.S. crypto markets have spent years in a gray zone where different agencies, courts, and enforcement actions have shaped outcomes without a clean statutory framework.

Supporters argue the industry is operating with fragmented oversight and outdated rules. Additionally, they say that a clearer framework could reduce “regulation-by-enforcement” dynamics while keeping activity onshore.

That framing is explicit in Senate Banking Committee majority materials, which say the bill aims to set “clear rules of the road” and allocate SEC vs CFTC jurisdiction more cleanly.

The CRS also highlights a practical gap the bill tries to fill, which is creating a pathway for intermediaries (exchanges, brokers, dealers) to register under an explicit digital commodity regime.

The Drama Around It

There’s a lot of speculation and noise surrounding the passing of this bill. Moreover, this is due to “clarity” being a bundle of tradeoffs that hits the most sensitive parts of the structure.

1) Who Controls the Spot Market: SEC vs CFTC

A major fight is whether the bill structure meaningfully empowers the CFTC (the industry’s preferred venue for spot market oversight) or whether changes in Senate drafting dilute that posture. Coinbase’s CEO Brian Armstrong argued the latest Senate effort would erode the CFTC’s authority.

2) Stablecoin Rewards & Incentives

Stablecoin reward mechanics are now a flashpoint because they touch consumer behavior. Meaning bank deposit competition, and what “yield” means when the token is pegged to dollars. Also, Armstrong warned the draft would “kill” the ability to offer rewards on stablecoin holdings, and noted stablecoin provisions are among the most contentious points in the Senate debate.

3) DeFi, Software, and the “Control vs Code” Line

Senate Banking majority messaging emphasizes protecting software developers and peer-to-peer activity while applying risk management standards to centralized intermediaries that interact with DeFi.

That sounds straightforward until you try to define “control” in real systems. Where front ends, sequencers, governance, and admin keys can turn “decentralized” into a complicated gradient rather than a binary.

4) Investor Protection and State Authority

Critics from traditional investor-protection circles worry that definitions and preemption could weaken the enforcement capacity.

Furthermore, NASAA said they couldn’t support the bill in its current form, raising concerns that parts of Title I could weaken state authority and pointing to inconsistencies in asset definitions.

Does it Affect Crypto Decentralization?

This is where most experts agree the bill stops being a simple “clarity good” narrative.

On one hand, after reviewing the document, Armstrong said Coinbase couldn’t support the measure in its current form and that “We’d rather have no bill than a bad bill,” while listing concerns, including stablecoin rewards and CFTC authority.

Also, Cardano founder Charles Hoskinson slammed Ripple CEO Brad Garlinghouse after Garlinghouse praised the Senate Banking Committee’s version of the Clarity Act. Arguing with a solid stance that “clarity beats chaos.”

Regardless of where you land, the takeaway is that major ecosystem leaders disagree on what decentralization should mean under law.

Moreover, even if a bill claims that self-custody is protected and that “developers aren’t intermediaries,” implementation tends to drift toward the easiest enforcement layer. Which are centralized on-ramps, stablecoin issuers, and large intermediaries.

Senate Banking materials emphasize focusing rules on control rather than code. However, the hard part is that control can exist in UI hosting, sequencer operation, admin keys, or token governance concentration, not just custody.

How Everything Looks in 2026

• The House version passed in 2025 and moved to the Senate.
• In January 2026, the Senate Banking Committee’s work hit a halt when the committee postponed a key markup after Coinbase’s objections went public.
• The bill isn’t dead. However, it’s being rewritten in real-time under pressure from industry, lawmakers, and investor-protection groups.

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