The CLARITY Act (H.R. 3633) is bipartisan federal legislation introduced in the 119th U.S. Congress in 2025 that would create a comprehensive regulatory framework for digital assets in the United States. It is designed to clarify how different types of digital assets are treated under law and assign clear regulatory authority to U.S. financial regulators.

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For many years, regulators have struggled with how to apply existing securities and commodities laws to cryptocurrencies and blockchain-based assets. The CLARITY Act aims to end this uncertainty by providing specific definitions, regulatory boundaries, and compliance rules, which supporters argue could foster innovation, protect consumers, and strengthen market integrity.

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Key Elements of the CLARITY Act

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Clear Digital Asset Categories:

The Act defines distinct categories of digital assets and rules for each:

1. Digital Commodities – Blockchain-based assets that are not securities (e.g., some utility tokens), generally regulated by the Commodity Futures Trading Commission (CFTC).

2. Investment Contract Assets – Digital assets that function like investment contracts and remain under Securities and Exchange Commission (SEC) oversight.

3. Permitted Payment Stablecoins – Stablecoins tied to payment functions with specified rules.
   These definitions help decide which regulator has authority over which asset type.

 

Regulatory Authority and Oversight

• The CFTC would have exclusive jurisdiction over digital commodities and associated spot markets.

• The SEC would oversee assets that are investment contracts under securities laws.

• The Act also sets criteria for when a blockchain or asset transitions from one regime to another (e.g., “mature blockchain” status).

• Both agencies would jointly issue rules on overlapping areas.

 

Market Infrastructure & Participants

• Digital commodity exchanges, brokers, and dealers would need to register with the CFTC and comply with specified regulations.

• Reporting and disclosure requirements would apply, helping enforce transparency and investor protection.

• Rules would be developed for delisting assets, capital requirements, and conflict-of-interest safeguards.

 

Consumer & Investor Protections

The Act includes consumer-focused measures such as:

• Public disclosures by issuers to inform retail participants.

• Conflict-of-interest rules for intermediaries.

• Safeguards against fraud and abusive practices in markets.
  These are intended to both protect users and support innovation.

 

Studies & Reporting Requirements

The CLARITY Act mandates several studies and reports on topics like:

• Decentralized finance (DeFi)

• Financial literacy for digital asset investors

• Illicit use of digital assets
  These help inform further regulatory actions and policymaking.

 

Current Status (As of Late 2025)

• The House of Representatives passed the CLARITY Act in July 2025.

• It is awaiting review, amendment, and potential passage in the Senate, with ongoing committee discussions and draft revisions.

 

Big Picture Takeaway

The CLARITY Act represents the most significant U.S. attempt yet to define and regulate digital assets with clear rules of the road, splitting oversight between the CFTC and SEC based on how assets function and establishing detailed compliance and reporting requirements for issuers, intermediaries, and exchanges.