Clarity Act: What’s In It and What’s Replacing It

Clarity Act, we hardly knew ye: What was in the bill, and what’s replacing it

The U.S. effort to pass a sweeping crypto market structure law has stalled, leaving regulators to fill the gap with agency rules and guidance that were originally meant to be anchored by statute.

The legislation in question, the Digital Asset Market Clarity Act (commonly called the CLARITY Act), was Congress’ latest attempt to establish a clear framework for how different types of digital assets are classified and which federal agencies oversee them.

With the CLARITY Act now effectively off the table “for now,” the practical question for the crypto industry is what replaces it—and whether those replacements are durable without an act of Congress.

One immediate place this shows up is at the Securities and Exchange Commission. The SEC is now led by Chairman Paul Atkins, appointed by President Donald Trump, and the agency has signaled that digital assets are a priority. In the absence of new law, the SEC is moving to build out what it can within its existing authority.

The broader issue is that agency-led approaches can change from one administration to the next, while legislation typically provides a longer-lasting foundation. The CLARITY Act was designed to set “governmental bedrock” rules for crypto markets; without it, regulators are left to substitute their own measures.

What the CLARITY Act was trying to do

The CLARITY Act was an updated version of a recurring congressional idea: define categories of digital assets and assign clear regulatory jurisdiction. Lawmakers revived and revised the concept in 2025, retaining the dual-agency approach associated with earlier proposals such as FIT21, while adjusting key mechanics around definitions and compliance pathways.

• Asset classification: clearer distinctions among types of digital assets and how they are treated under federal law.
• Regulatory roles: delineation of oversight responsibilities between the SEC and the Commodity Futures Trading Commission.
• Market infrastructure rules: proposed requirements affecting trading platforms and intermediaries, alongside customer protection measures.
• Pathways for compliance: revisions to disclosure and registration approaches, including how certain assets initially sold via investment contracts could be treated over time.
• Additional policy areas: committee work and substitute text described a package spanning topics such as decentralized finance, banking-related provisions, software developer protections (including the Blockchain Regulatory Certainty Act concept), customer property protections in bankruptcy, and expanded Treasury tools targeting illicit finance.

How the bill advanced—and then stalled

Introduced by Rep. French Hill (R-Ark.) as H.R. 3633 on May 29, 2025, the CLARITY Act moved quickly through the House:

• House Financial Services Committee approval (32–19) and House Agriculture Committee approval (47–6) in June 2025
• Passage in the House on July 17, 2025, by a vote of 294–134

In the Senate, the effort continued but did not reach enactment. A revised version cleared the Senate Banking Committee on May 14, 2026 (15–9), and the bill was placed on the Senate Legislative Calendar on June 1, 2026 (Calendar No. 423). It still did not become law.

On July 22, 2026, Sen. Cynthia Lummis (R-Wyo.), chair of the Senate Banking Subcommittee on Digital Assets, released updated bill text reflecting merged work from the Senate Banking and Agriculture Committees—another sign of ongoing negotiations, but not a final legislative victory.

Why it matters now

The CLARITY Act was meant to reduce uncertainty around who regulates what in crypto—an issue that affects exchanges, token issuers, intermediaries, developers, and users. With that comprehensive framework not in place, federal agencies are moving to substitute their own regulatory approaches where they can.

The result is a return to a more fragmented process: policy largely shaped through regulator action rather than a single market structure law passed by Congress.