CLARITY Act Seeks to Illuminate U.S. Crypto Regulations
Washington, D.C. — Congressman Don Davis (D-NC-01), Ranking Member of the Commodity Markets, Digital Assets, and Rural Development Subcommittee, is spearheading a significant bipartisan initiative aimed at clarifying and standardizing digital asset regulations with the introduction of the Digital Asset Market Clarity (CLARITY) Act of 2025.
The legislation, co-led by Rep. Davis and House Agriculture Committee Ranking Member Angie Craig (D-MN-02), has garnered support from a diverse coalition, including House Financial Services Committee Chair French Hill (R-AR-02), House Agriculture Committee Chair Glenn “GT” Thompson (R-PA-15), along with various other influential members from both parties.
The CLARITY Act aims to create an extensive regulatory framework for digital assets, ensuring equitable oversight, fostering innovation, and safeguarding consumers within one of the swiftest-growing sectors of the contemporary economy.
“Families, entrepreneurs, and small businesses throughout our nation, particularly in rural regions of eastern North Carolina, are looking for ways to participate in the modern economy,” Rep. Davis stated. “Digital assets offer an opportunity for a more inclusive financial future, but we require clear regulations and equitable oversight for innovation to flourish. Congress must take action to ensure that America leads in the digital finance arena, creating opportunities, protecting consumers, and aiding underserved communities.”
Key Provisions of the CLARITY Act
This legislation aims to explicitly clarify the circumstances under which a digital asset falls under the jurisdiction of either the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC):
- CFTC Oversight of Digital Commodities: The bill bestows the CFTC with authority over “digital commodities,” encompassing blockchain-based assets deemed decentralized or part of “mature” systems.
- SEC and CFTC Rulemaking: While the bill sets forth principal categories, it mandates both agencies to further refine terms through regulatory processes, ensuring adaptability as the market shifts.
- Secondary Market Regulation: The CFTC would oversee most transactions in the secondary market—including trades involving previously issued cryptocurrency assets.
- Registration Requirements: Exchanges, brokers, and dealers engaged in trading digital commodities must register with the CFTC and adhere to rigorous standards concerning market integrity, disclosures, customer fund protection, and recordkeeping.
Building on Previous Legislative Momentum
The CLARITY Act expands upon the foundation laid by the Financial Innovation and Technology for the 21st Century Act introduced in prior congressional sessions. It reaffirms the CFTC’s authority regarding “spot market” digital commodity transactions, with specific exceptions, and strives to prevent market manipulation while establishing a reliable compliance pathway.
A Step Toward Modernizing U.S. Financial Regulation
With bipartisan support and an increasing acknowledgment of the economic importance of digital assets, the CLARITY Act signifies a pivotal step in updating the United States’ financial regulatory framework for the digital era.
Proponents of the bill contend that without federal clarity, innovation risks migrating overseas or becoming stagnant in a state of legal uncertainty, leaving consumers exposed in unregulated environments.
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