The CLARITY Act, explained
Where U.S. crypto regulation stands in 2026
This article is adapted from a video essay by Tally CEO & Co-founder, Dennison Bertram. Watch the full video on X.
The most important regulatory development to watch in 2026 is the Clarity Act. Here’s where things stand.
Years of ambiguity
For years, U.S. crypto has lived in a gray zone. Regulators stretched decades-old securities and commodity laws over assets and market structures they were never written for. The Digital Asset Market Clarity Act of 2025, universally shortened to the CLARITY Act, was Congress’s first serious attempt to replace that ambiguity with a purpose-built framework.
At its core, CLARITY tries to do three things: define what different kinds of digital assets are, decide who regulates them, and set ground rules for the middlemen who run the markets.
The original purpose
When White House leaders introduced CLARITY in Spring 2025, they framed it as a market structure bill; not about taxing or banning crypto, but about organizing the basic plumbing of trading and issuance.
The key original goals included:
Clear asset classifications. The bill draws a line between digital commodities (like many fungible tokens on mature decentralized blockchains) and investment contract assets that look more like securities.
Regulator demarcation. It gives the CFTC exclusive jurisdiction over spot markets and digital commodities traded on new CFTC-registered venues — digital commodity exchanges, brokers, and dealers — while preserving the SEC’s authority over genuinely securities-like assets and activities.
Modernized protections. It layers in customer asset segregation, anti-fraud and anti-manipulation rules, disclosure and ongoing reporting for certain issuers, and Bank Secrecy Act compliance for intermediaries.
Put simply, the original purpose was to give developers, exchanges, and investors a predictable rule book without forcing everything into the securities bucket by default.
The House version
The House packaged this framework into HR 3633, the Digital Asset Market Clarity Act of 2025, and moved it through both Financial Services and Agriculture committees before passing it on the floor in July 2025.
The House bill defines digital assets on mature blockchains. Assets on sufficiently decentralized, mature networks can qualify as digital commodities and — subject to volume and other limits — avoid SEC registration as securities. It creates new CFTC registration types: digital commodity exchanges, brokers, dealers, and custodians with capital, risk management, record keeping, and customer protection requirements, plus limits on using customer assets (for example, for staking) without express consent. It also preempts some state laws, treating qualifying digital commodities as covered securities for certain purpose — preempting state blue sky registration and easing multi-state compliance difficulty.
On July 17th, the House passed Clarity with bipartisan support and sent it to the Senate, where the real negotiation began.
The Senate’s version
The Senate never simply copy-and-pasted HR 3633. Instead, Senate Banking and Agriculture committees worked up their own digital asset market structure drafts that drew heavily on Clarity concepts but tweaked the balance between consumer protection, enforcement, and innovation.
Analysis of the Banking Committee draft highlights several themes where it diverges from the House approach:
Stronger consumer protection tilt. The Senate draft leans more heavily into guardrails around stablecoins, conflicts of interest, and risk management for trading platforms and custodians—reflecting Banking’s traditional focus on financial stability.
Narrower exceptions. Where the House version carves out a range of technology and infrastructure activities from full securities regulation, Senate language reportedly narrows some exceptions or conditions them on additional safeguards.
More skepticism about preemption. Senators from both parties have signaled more skepticism about broad preemption of state rules and about any framing that appears to strip the SEC of too much authority. That shows up in more explicit enforcement and oversight backstops.
In short, the Senate’s version is less a line-by-line companion bill and more an alternative blueprint built on the same foundations: shared definitions, a central CFTC role for digital commodities, and a clear SEC lane for true securities.
What’s happened since
It’s January 2026 and there’s still no market structure bill in hand.
Since House passage, the story of Clarity has mostly been a story of negotiation. Consumer groups and regulators have all pushed to redraw particular lines. How generous should the path be from investment contract to digital commodity as a network matures? How far should federal law go in preempting states? How tightly should centralized exchanges and stablecoin issuers be supervised?
Commentary throughout mid and late 2025 points to several pressure points:
The SEC-CFTC balance. Stakeholders debated whether Clarity tilts too far toward the CFTC and away from the SEC, and whether that invites regulatory arbitrage or leaves investors exposed.
Treasury and AML expectations. Treasury-focused analysis examined how Clarity’s CFTC-centric model intersects with anti-money laundering obligations, sanctions expectations, and oversight of digital commodity pools.
Political timing. With an election year on the horizon and other legislative priorities competing for floor time, leadership in both chambers needed a package that could get 60 Senate votes without igniting a partisan brawl.
By December, the outlines of compromise had emerged, setting the stage for the first formal showdown over actual legislative text.
What to watch for
Senators on the Banking Committee have landed on January 15th, 2026 for a markup of the crypto market structure legislation widely referred to as Clarity.
The markup is the moment where committee members debate and vote on amendments, then decide whether to send a bill—possibly revised from the House version—to the full Senate. It’s the first on-the-record test of bipartisan support. Reporting suggests many amendments will be hammered out in advance to avoid surprises and reduce floor drama, with Banking and Agriculture expected to coordinate so their pieces of the market structure puzzle fit together.
Optimistic projections envision a path where, if markup goes smoothly, the Senate could pass a reconciled bill within 30 to 45 days and then negotiate final language with the House.
For anyone following regulatory clarity as a theme, January 15th is less the finish line than the moment Congress finally moves from concept to concrete Senate text. The outcome will show whether Clarity remains a House-driven vision or becomes a bicameral framework that can actually reach the president’s desk.
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