US preparing to redraw oversight of digital currencies through fresh regulatory framework
The CLARITY Act: A Step Forward in Crypto Regulation
The CLARITY Act, or the Digital Asset Market Clarity Act of 2025, has been passed by the U.S. House of Representatives and is currently awaiting consideration by the Senate. This legislation aims to establish a comprehensive regulatory framework for digital assets, providing a clear distinction between the jurisdictions of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The Act proposes a specific legal category for digital assets like Bitcoin, Ethereum, XRP, and DOGE, classifying them as "digital commodities" and placing them under the CFTC’s regulatory umbrella. Assets with centralized control or profit-sharing features will remain under the SEC's jurisdiction.
The CFTC will have exclusive authority over spot cryptocurrency markets and the supervision of cryptocurrency derivatives under the CLARITY Act. This includes registration requirements for digital commodity exchanges, brokers, dealers, and the extension of CFTC authority to activities like "commodity pools" involving spot digital commodities. This could impact investment funds and digital asset treasury companies.
The Act also lays out clearer rules for issuers, custodians, and intermediaries in the crypto ecosystem, aiming to foster innovation and protect consumers in a more structured way. It introduces a “safe harbor” approach, allowing some projects to transition from securities to non-securities status over time, reflecting the evolving nature of blockchain technology.
However, the CLARITY Act has faced criticism for prioritizing regulatory certainty over consumer protections. Consumer advocacy groups warn that shifting oversight from the SEC— which has a strong consumer protection mandate— to the CFTC could reduce safeguards for investors and market stability.
In summary, the CLARITY Act represents a major step toward a unified crypto regulatory regime in the U.S. It defines a clear legal framework for digital assets, encourages a safer environment, fosters technological and economic innovation, and facilitates the entry of new market participants. However, its ultimate fate and final form depend on upcoming Senate actions.
| Aspect | CLARITY Act Provisions | |-------------------------|------------------------------------------------------------------------| | Status | Passed House July 2025; pending Senate consideration | | Regulatory Bodies | CFTC oversees digital commodities (BTC, ETH, XRP, DOGE); SEC keeps securities oversight | | Key Actions | Defines digital asset categories; sets registration for exchanges/brokers; applies commodity pool rules to spot digital assets | | Goals | Clear regulatory framework, reduce confusion, support innovation | | Criticisms | Potential erosion of SEC consumer protections; concerns over investor safety[5] |
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The CLARITY Act, under consideration by the Senate, will specifically classify digital assets like Bitcoin, Ethereum, XRP, and DOGE as "digital commodities," shifting their regulation to the Commodity Futures Trading Commission (CFTC). This change can impact various businesses, including investment funds and digital asset treasury companies, as the CFTC will have exclusive authority over spot cryptocurrency markets.
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