The Digital Asset Market Clarity Act, formally H.R. 3633, better known as the CLARITY Act, is the most comprehensive piece of crypto regulation ever passed by one chamber of the United States Congress.
It passed the House of Representatives on July 17, 2025, by a 294 to 134 bipartisan vote, according to Congress.gov.
The bill does one fundamental thing, which is, end the decade-long regulatory guessing game about which US government agency is in charge of crypto.
Right now, both the Securities and Exchange Commission and the Commodity Futures Trading Commission have been asserting jurisdiction over different parts of the digital asset market, often simultaneously, often contradicting each other.
The CLARITY Act draws a permanent statutory line between them.
Under the bill, digital assets are sorted into three legal categories.
Digital commodities, assets whose value comes from how a blockchain network functions rather than from the promises of a central team, would fall exclusively under CFTC oversight.
Bitcoin (BTC) and Ethereum (ETH) are the clearest examples. Investment contract assets, meaning tokens that function more like securities, stay with the SEC. And payment stablecoins get their own framework under banking regulators.
On March 17, 2026, the SEC and CFTC issued a joint 68-page interpretation classifying Bitcoin, Ethereum, Solana (SOL), XRP, Dogecoin (DOGE), and several others as digital commodities, according to Backpack Exchange's legal analysis. The CLARITY Act would make that classification permanent through federal statute rather than leaving it subject to future agency reinterpretation.
The bill also gives DeFi developers a formal safe harbour: writing non-custodial, open-source software does not make you a financial intermediary. Banks holding company status would be amended to allow qualifying institutions to conduct digital commodity activities. Exchanges would register with the CFTC and operate under clear core principles for the first time.
Why It Has Been Stuck Since January
The CLARITY Act cleared the House and the Senate Agriculture Committee, but has been deadlocked in the Senate Banking Committee since January 14, 2026, when Chairman Tim Scott cancelled a scheduled markup session at the last minute. Over 100 amendments had been filed. The vote was too close to risk.
The fight that killed it was stablecoins, specifically whether crypto platforms can pay interest or rewards on stablecoin balances held by users. Banks hate the idea. Their argument, backed by a Standard Chartered estimate, is that unrestricted stablecoin yield could pull up to $500 billion in deposits out of the insured banking system and into crypto platforms, shrinking the lending capacity of traditional banks.
The American Bankers Association formally rejected a White House-brokered compromise on March 5, 2026.
Crypto firms, led publicly by Coinbase and Stripe, argue that yield-bearing stablecoins are the primary incentive for institutional and retail adoption. Without them, the product is just a slower bank transfer.
Coinbase Chief Legal Officer expressed confidence in early April that a compromise on reward structures was close, but the company had not fully accepted the latest draft text as of Easter recess, according to FinTech Weekly and Elliptic reporting.
A compromise framework was reached on March 20, 2026, by Senators Thom Tillis and Angela Alsobrooks. It bans passive yield on stablecoin balances but permits activity-based rewards tied to actual payments and platform use.
Senator Lummis described negotiations as 99% resolved. But 1% in Washington is often where deals go to die. The stablecoin yield fight is not the only unresolved issue. Senate Democrats are pushing for ethics language explicitly barring government officials and their family members from personally profiting from crypto, language directed at the Trump family's holdings in WLFI and the TRUMP meme coin.
DeFi provisions remain contested, with several Democratic senators citing illicit finance concerns and Senate Republicans are now discussing attaching community bank deregulation to the bill as part of a broader legislative trade, according to FinTech Weekly, adding a new variable that did not exist a month ago.
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The Five Hurdles That Still Remain
Passing a Senate Banking Committee markup is only step one.
According to FinTech Weekly's mapping of the official 2026 Senate calendar, the CLARITY Act must then clear four more sequential steps: a full Senate floor vote requiring 60 votes and therefore meaningful Democratic support; reconciliation of the Banking Committee version with the Agriculture Committee version, reconciliation of the combined Senate bill with the House-passed version; and finally, the President's signature. Each step is a potential veto point.
Senator Bernie Moreno has said explicitly that if the bill does not reach the Senate floor by May, it risks being pushed off the calendar until after the November 2026 midterms. Senator Bill Hagerty told the Vanderbilt University Digital Assets Policy Summit he believes the Banking Committee can complete markup in April, but added there is still a lot more work to do.
What The Experts Are Saying
The gap between optimists and realists is wide. Ripple CEO Brad Garlinghouse has estimated passage odds at 80 to 90%. JPMorgan analysts described CLARITY Act passage by midyear as a positive catalyst for digital assets, citing regulatory clarity, institutional scaling, and tokenisation growth. Polymarket's prediction market currently prices 2026 signing odds at approximately 61 to 66%.
Ron Hammond, head of policy at crypto market maker Wintermute, published a markedly cooler assessment on April 11, 2026 via CoinDesk, which is, 30% odds of passage this year. His reasoning covers political friction, stalled negotiations, and the constant risk of schedule disruption from higher-priority events, including, right now, an active war in Iran consuming Senate floor time and political capital.
Peter Van Valkenburgh, executive director of Coin Center, framed the bill's long-term purpose in terms that cut through the noise, saying that the aim of passing the CLARITY Act is not to trust the current administration. It is to bind the next one.
What Happens If It Passes And What Happens If It Does Not
If the CLARITY Act becomes law, the impact extends far beyond the crypto industry. Asset managers who have been waiting for a defined legal framework to deploy institutional capital at scale would have their signal.
The pipeline for altcoin ETFs covering Solana, XRP, and others would accelerate. The tokenization of real-world assets would gain a legal framework to move from pilots to production. Exchanges operating under regulatory ambiguity would have two years to achieve full compliance under clear rules.
If it stalls past May, the Senate's legislative calendar closes quickly ahead of the August congressional recess and November midterms. Regulatory guidance from the current administration would remain in place but would be reversible by the next one.
Crypto firms are already pursuing parallel routes, Coinbase received conditional OCC approval for a national trust charter, and Circle and Ripple are in similar processes, but a federal charter is not the same as an act of Congress.
The Senate returns from Easter recess on April 13. The Banking Committee markup window is the second half of April.
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