Clarity Act

The CLARITY Act is a US bill that splits oversight of digital assets between the securities regulator SEC and the futures market regulator CFTC. The deciding criterion is how decentralized the underlying blockchain system is. Although the House of Representatives passed the bill in July 2025, it has not entered into force.

The leadership of the House Financial Services Committee under Chairman French Hill introduced the text as H.R. 3633. The bill entered the 119th Congress on 29 May 2025. FIT21, its direct predecessor, cleared the House of Representatives in May 2024. In the Senate, though, it never reached a vote. Hill took up the structure again a year later. Substantively, the CLARITY Act builds on the GENIUS Act, which President Trump signed on 18 July 2025. That law governs payment stablecoins only, so the existing rules on them remain untouched. Instead, H.R. 3633 extends federal oversight to market structure, meaning exchanges, brokers and dealers in digital commodities.

What is the CLARITY Act and which agency would oversee which token

Every proceeding starts with the SEC. The CLARITY Act treats each digital asset as a potential "investment contract asset". The bill therefore assigns each asset to the securities regulator. However, issuers, decentralized governance systems or registered exchanges can have the agency certify that the underlying blockchain system is mature. If that certification succeeds, primary oversight of trading would shift to the CFTC. The text thus sets up two registration regimes. One sits with the SEC under Title III, the other with the CFTC under Title IV. A separate exemption also allows issuers primary sales without prior SEC registration. The cap is USD 50 million per 12 months. That relief applies only if no buyer subsequently holds more than 10 percent of the outstanding units.

Two exemptions limit the reach. Under the bill text, anyone who provides self-custody software does not count as a money transmitter. The same applies to operators of infrastructure without access to customer funds. Furthermore, the bill exempts DeFi activities from the registration requirement at the SEC and the CFTC. Those activities include validation, software publication, wallet development and front-end operation. Still, centralized functions such as custody or exchange operation remain covered. A separate Title VI carries the name "Anti-CBDC Surveillance State Act". It additionally bars the Federal Reserve Banks from issuing a central bank digital currency directly to individuals. The same title prohibits the central bank from using such a currency as a monetary policy instrument.

Nevertheless, the law would not take effect immediately even after a signature. Most provisions apply only 360 days after enactment. The SEC and the CFTC must also issue their implementing rules within that period. Until the deadline expires, existing supervisory practice would remain decisive.

Where the CLARITY Act stands in the legislative process

As of August 2026, the CLARITY Act has cleared one chamber of Congress and sits in the Senate. Still, it has not entered into force. A bill becomes law only once both chambers adopt the identical text and the president signs it. Both steps are still outstanding.

Overall, support in the House of Representatives split unevenly across the parties. According to Roll Call 199, all 216 Republicans voting backed the bill, and none opposed it. Among Democrats, by contrast, 78 voted in favor, while the majority of the caucus rejected it.

In the Senate, the banking committee took its own path. The Senate Committee on Banking, Housing, and Urban Affairs adopted its own substitute version. That version replaces the House text in several places. Since then, H.R. 3633 has stood on the Senate Legislative Calendar as Calendar No. 423. Senator Scott (SC) reported the measure for the committee, expressly "with amendment". Majority Leader John Thune subsequently moved to proceed to the bill. He also filed the cloture motion, recorded in the Congressional Record of 7 August 2026. Ending debate in the Senate requires 60 votes, three fifths of senators duly chosen and sworn.

The Senate returns from its summer recess on 14 September 2026. The vote on the cloture motion is scheduled for Tuesday, 15 September 2026 at 14:15 Washington time. Republicans hold 53 seats, so the required 60 votes need at least seven votes from Democrats or independents. However, a successful cloture motion does not pass the bill. It merely ends debate on the procedural motion, and the bill itself only comes up for consideration afterwards.

Furthermore, the course of the process is covered in the reports on the delay of the vote to 15 September, on the stalling in the Senate before the summer recess and on the ethics clause for the CLARITY Act.

When a blockchain system counts as mature

Maturity is a control concept in the CLARITY Act. Neither the issuer nor affiliated persons may hold a decisive share of the outstanding voting power. The bill draws that line at the power to unilaterally direct 20 percent or more. The same threshold applies to economic holdings. Also, issuer and affiliated persons together may not hold 20 percent or more of all outstanding units. The test therefore measures control, not technology or market size.

Furthermore, the test requires open source code and the absence of special privileges for insiders. The bill ultimately leaves the precise design to the SEC. That agency must issue the rules on the maturity test within 270 days after the section takes effect. Compared with FIT21, the split between the two agencies remains in place. The CLARITY Act nonetheless frames the decentralization test more explicitly.

How self-certification with the SEC works

The procedure rests on a self-certification with a rebuttable presumption. Specifically, issuers, affiliated persons, decentralized governance systems and registered exchanges file it with the SEC in advance. The review covers the underlying blockchain system. After receipt, the agency first has 60 days to contest maturity. However, if the agency stays silent, the certification takes effect automatically. Consequently, without an effective certification, jurisdiction remains with the SEC.

Should the SEC object, it can suspend the review for up to 120 additional days. At the same time, it opens a public comment process. Moreover, after a rebuttal, a renewed filing for the same blockchain system stays blocked for 90 days. Finally, the applicant may appeal to the U.S. Court of Appeals for the D.C. Circuit. That court reviews the case entirely anew.

The CLARITY Act changes nothing about the Howey test. This judge-made standard decides whether a transaction is an investment contract. It comes from the ruling in SEC v. W.J. Howey Co. and remains applicable. In addition, the bill creates the category "investment contract asset". Under certain conditions, that category falls outside the definition of a security.

What distinguishes the CLARITY Act from MiCA

In the EU, MiCA has applied in full since December 2024. The regulation classifies crypto assets functionally, that is, by what a token is and does. A single national authority grants the license. That license consequently applies across the entire single market.

The CLARITY Act follows a different logic. What counts there is the degree of decentralization of the blockchain, not the function of the token. Instead of a single supervisor as under MiCA, the SEC and the CFTC would share jurisdiction. MiCA is also already applicable. Even after a signature, the CLARITY Act would take hold only once its transition periods expire.

Switzerland regulates tokens just as functionally as the EU does. Specifically, the FINMA guidelines and the DLT Act of 2021 govern here. Those guidelines divide tokens into payment, utility and asset tokens. Both regimes ultimately ask which function a token performs. By contrast, a control threshold such as the 20 percent in the CLARITY Act is no criterion for classification there.