The CLARITY Act is set to become the first comprehensive federal framework for cryptocurrencies and digital assets in the United States: the bill allocates powers between regulators, introduces token classification, and sets rules for exchanges, brokers, custodians, and issuers.
- The CLARITY Act is the first attempt to create a unified federal system of oversight for cryptocurrencies and digital assets.
- The bill divides digital assets into three groups, clarifies the responsibilities of the SEC and CFTC, and establishes common rules for market participants.
- If a compromise is not reached by August 8, the likelihood of the CLARITY Act passing in 2026 will significantly decrease.
The Digital Asset Market Clarity Act of 2025, or simply the CLARITY Act, is a bill in the US Congress designed to close a years-long gap in crypto industry regulation. Before its introduction, the market operated in what participants called “regulation by lawsuit”: the US Securities and Exchange Commission and the US Commodity Futures Trading Commission argued for years over who exactly had authority over digital assets.
In the English-speaking legal environment, these regulators are known as the United States Securities and Exchange Commission and the United States Commodity Futures Trading Commission. The CLARITY Act seeks to draw a clear jurisdictional line between them: where oversight of securities begins, and where oversight of commodities and crypto assets traded on the spot market starts.
Why the CLARITY Act Was Needed
Under former SEC Chair Gary Gensler, the approach was strict: almost any token was considered a security, meaning it was subject to securities law. The CFTC, by contrast, saw decentralized crypto assets as more of a commodity and sought to expand its authority over spot markets.
This conflict created a gray area. For institutional investors, this meant increased risks; for projects, uncertainty; for innovation, an incentive to move outside the United States. As a result, the market received not clear rules, but a constant threat of litigation.
The CLARITY Act aims to replace this model with a clear system. Its logic is that regulation is built not around one-off claims against individual companies, but around pre-defined rules. For the market, this is a matter of transparency; for regulators, a matter of jurisdictional boundaries; for businesses, the ability to understand which requirements must be met.
Three Categories of Digital Assets
The main idea of the bill is to divide digital assets into three groups. This way, the same token does not have to depend each time on how a particular agency interprets it.
- Category: digital commodities. Description: assets linked to blockchains and used for payments, voting, access to services, or incentivizing network participants. Regulator: the CFTC gets oversight of spot markets, including fraud and manipulation prevention. Examples: Bitcoin and Ethereum are highly likely to fall into this group.
- Category: investment contract assets. Description: tokens sold to raise capital, for example through ICOs. Regulator: at the initial offering, this falls under the SEC; but when sold on the secondary market by a party not affiliated with the issuer, the token may transition to the digital commodity category and come under CFTC oversight. Examples: tokens through which a project first raises money and then enters open trading.
- Category: authorized payment stablecoins. Description: tokens pegged to a national currency and providing for redemption at a fixed rate. Regulator: issuers are subject to banking regulators, while the SEC and CFTC retain authority to combat fraud on platforms where such assets are traded. Examples: payment stablecoins that meet reserve and redemption requirements.
Here, the CLARITY Act complements the GENIUS Act, adopted in July 2025. That law already set basic requirements for stablecoins: one-to-one reserving, a ban on algorithmic stablecoins, and monthly disclosure of reserve data.
What the CLARITY Act Could Change for XRP
For XRP, the key question is not a separate rule for a single token, but which category it will fall into under the new system. If XRP is considered a digital commodity on the secondary market, its spot trading will come under CFTC oversight, and exchanges and brokers will have to comply with registration, customer identification, anti-money laundering, and segregation of client assets requirements.
For platforms, this could simplify the decision to list XRP: instead of arguing over which regulator is in charge, there will be a clear admission and oversight scheme. But if the sale of XRP is used to raise capital by the issuer or an affiliated party, such a transaction may remain under SEC jurisdiction as an investment contract.
For XRP holders, adoption of the CLARITY Act would mean more clarity when trading and storing the asset. For issuers and affiliated sellers, it would mean the need to understand in advance which rules apply to initial offerings, secondary sales, and working with trading platforms.
What Rules Will Appear for Exchanges, Brokers, and DeFi
The CLARITY Act is not limited to classification. It introduces practical requirements for market participants: crypto exchanges and brokers must register with the CFTC, conduct customer identification, combat money laundering, monitor suspicious transactions, and keep client assets separate from their own funds.
A separate section concerns decentralized finance. Code developers and non-custodial wallet providers are exempted from direct regulation. But if a platform effectively controls users’ funds, it must comply with the rules as a full-fledged financial market participant.
This is a particularly sensitive issue for the industry. On one hand, developers need a safe harbor so they are not prosecuted just for creating software. On the other, authorities fear that too broad protection will allow such tools to be used for ransomware attacks and money laundering.
How the Bill Passed the House and Got Stuck in the Senate
The House of Representatives passed the CLARITY Act on July 17, 2025: 294 congresspeople voted in favor, 134 against. All Republicans and 78 Democrats supported the bill. For a crypto bill, this is a rare level of bipartisan agreement. But a House vote does not make the CLARITY Act law: final Senate approval, reconciliation of the final text, and the president’s signature are still ahead.
In the Senate, the process moved more slowly. In January 2026, the Agriculture Committee approved its version, and in May 2026, the United States Senate Committee on Banking, Housing, and Urban Affairs did the same. Then work began to reconcile the two Senate texts and align them with the House version.
After this, the consolidated version was added to the Senate legislative calendar. At this stage, the main political bargaining over the final text began: the bill was not rejected, but got stuck in the Senate and has not yet completed the process to become law.
Main Intrigue: Will There Be Enough Votes
For the bill to pass the Senate, 60 votes are needed. This is the threshold to overcome a filibuster—a parliamentary tactic of delaying debate, which allows the minority to block a bill. Republicans have 53 seats, so they need the support of at least seven Democrats.
By the third decade of July, not a single Democrat had publicly stated they were ready to support the final version. The main dispute is not about crypto mechanics, but about an ethics amendment.
The future of the CLARITY Act depends not on a single amendment, but on whether Republicans and Democrats can agree on ethics, DeFi, and stablecoins before the Senate calendar finally shifts priorities.
Democrats are demanding that the legislation include strict rules prohibiting the president, vice president, members of Congress, and their families from having personal financial interests in the crypto business. The context is clear: according to a financial disclosure published on July 1, 2026, Donald Trump’s crypto income for 2025 was about $1.4 billion, mainly from World Liberty Financial and his memecoin.
On July 20, Donald Trump agreed to include the ethics clause in the text. But the key question is how strict it will be. If the wording is soft and leaves loopholes for the president’s family and business, Democrats are unlikely to support the document.
Section 604 and the Safe Harbor Dispute
Another unresolved issue is Section 604, known as the Blockchain Regulatory Certainty Act. It is intended to protect open source software developers, node operators, and non-custodial wallet creators from prosecution, even if someone launders money through their software.
The FBI and Department of Justice are strongly opposed. Their position is simple: such a provision would create a “safe harbor” for architects of tools that can be used in ransomware attacks and money laundering schemes. Negotiations have not yet led to a compromise.
This is a fundamental point for the crypto industry. Developers want the law not to equate writing code with controlling other people’s funds. Law enforcement, on the other hand, fears losing leverage over those who create infrastructure for shadow operations.
Stablecoins and Competition With Banks
The third contentious issue concerns yield on stablecoins. The banking version of the bill prohibits crypto platforms from paying interest on stablecoin deposits. If a platform pays yield for “holding” such assets, it effectively becomes a bank and must comply with banking requirements.
Exceptions are allowed for transaction rewards, payments, and loyalty programs. The crypto market disagrees: in the industry’s view, such a provision protects not the consumer, but traditional banks from competition.
The scale of the issue is huge. Stablecoins with a total volume of over $300 billion are already circulating in the market, and yield rules affect a wide range of users, platforms, and investors.
Why the August 8 Deadline Is So Important
The final date is August 8, 2026, the last working day of the Senate before recess. After returning in September, lawmakers’ attention will be focused on the budget process and the election campaign.
If agreement on key amendments is not reached before the break, the chances of the CLARITY Act passing in 2026 will sharply decrease. However, this does not mean a final rejection: the bill could return to active consideration if a bipartisan compromise is reached and there is room in the Senate calendar.
The same bottlenecks will affect further prospects: the strictness of the ethics clause, the Section 604 dispute, stablecoin yield rules, the budget agenda, and the election campaign. For the crypto market, delay means continued uncertainty: without a unified regulatory framework, investors, platforms, and issuers will continue to operate under blurred rules.
The further fate of the bill depends on three compromises:
- Ethics clause.
- Developer status.
- Stablecoin yield rules.
If agreement is reached on these points, the United States may get its first full-fledged federal law on digital assets. If not, the crypto industry will remain in its familiar zone of legal uncertainty for at least another year.
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