The U.S. cryptocurrency market structure bill — known as the Digital Asset Market Clarity Act (CLARITY Act) — is the most significant attempt to date to create a comprehensive federal framework for digital assets. This guide explains what the bill is, how it works, what it means for investors and businesses, and the risks and uncertainties that remain.
📜 Educational guide • Updated July 2026 • Read time: 14 min
The Digital Asset Market Clarity Act — commonly referred to as the CLARITY Act — is a proposed U.S. federal law that would establish a comprehensive regulatory framework for digital assets[reference:0]. Its primary goal is to answer a question that has plagued the crypto industry for years: Which regulator oversees which part of crypto, and what rules apply?
The bill passed the U.S. House of Representatives on July 17, 2025 with a bipartisan vote of 294–134[reference:1]. As of mid-2026, the Senate is actively debating its own version — which is significantly more extensive than the House version[reference:2]. On May 14, 2026, the Senate Banking Committee advanced the bill to the full Senate floor[reference:3][reference:4].
The bill is often described as a “market structure” bill because it addresses the foundational rules of how crypto markets operate — not just one product like stablecoins, but the entire ecosystem of issuance, trading, custody, and regulation[reference:5].
The U.S. crypto industry has operated for years without comprehensive federal market structure legislation[reference:6]. This has resulted in:
The current momentum is driven by geopolitical competition — particularly Europe's MiCA framework — and a growing legislative recognition that lacking clear domestic rules risks U.S. competitive advantages.
The most important feature of the market structure bill is its creation of a new classification framework for digital assets. The bill divides crypto assets into three novel categories[reference:15]:
Assets that demonstrate sufficient decentralization, algorithmic autonomy, and utility will fall under the CFTC's purview. This includes network tokens — digital assets intrinsically linked to a distributed ledger system and expected to derive value from the use of that system[reference:17]. These are not considered securities under federal securities laws.
Tokens tightly tied to centralized funding groups with prominent investment-contract characteristics will remain under SEC oversight, requiring rigorous registration and ongoing disclosure standards.
A hybrid category. An “ancillary asset” is a network token whose value relies upon the entrepreneurial or managerial efforts of an “ancillary asset originator” or a related person[reference:19]. These assets are subject to a disclosure and certification regime with the SEC[reference:20].
Title VI of the Senate version provides explicit statutory protections for software developers and individual users, addressing long-standing uncertainty about how financial regulations apply to non-custodial and software-based activity[reference:21].
The bill also includes a rebuttable presumption and a written certification process to the SEC, allowing an originator to certify, supported by reasonable evidence, that a network token is not an ancillary asset[reference:22].
The market structure bill is comprehensive. Here are the major provisions investors and market participants should understand.
The bill provides the CFTC with exclusive regulatory jurisdiction over transactions in digital commodities — including in spot or cash markets — by or on any entity registered with or required to be registered with it[reference:24]. The SEC's jurisdiction over digital asset securities is reaffirmed but narrowed[reference:25].
The draft introduces a strict operational framework for stablecoins, requiring issuers to maintain 1:1 high-quality liquid asset reserves and undergo audited monthly disclosures. The bill restricts stablecoin issuers from offering rewards or yield solely for holding stablecoins[reference:27] — a provision that has generated significant industry pushback[reference:28].
The bill instructs the SEC and the U.S. Treasury to develop rules clarifying how DeFi trading protocols must comply with applicable regulatory obligations, including disclosure, recordkeeping, and securities law requirements[reference:29]. It also mandates the U.S. Treasury to define how DeFi platforms are expected to comply with the Bank Secrecy Act and anti-money laundering rules[reference:30].
This title provides explicit protections for software developers, clarifying that non-custodial blockchain developers are not automatically subject to federal money transmission laws[reference:31][reference:32]. The Blockchain Regulatory Certainty Act (BRCA) is attached to the Senate version[reference:33].
Title IV allows banking institutions to engage in digital asset activities otherwise permissible under law and directs regulators to update capital and risk rules accordingly[reference:34].
The bill sets forth a disclosure framework for ancillary assets, requiring initial and periodic disclosures by an ancillary originator with the SEC. The SEC is directed to develop disclosure rules based on originator size, amount sold to the public, and whether a system is subject to “coordinated control”[reference:35].
| Feature | House CLARITY Act (Passed July 2025) | Senate Banking Committee Version (May 2026) |
|---|---|---|
| Scope | Focused on market structure and classification | Far more extensive; includes DeFi, stablecoin yield limits, tokenization standards, developer protections, and bankruptcy protections[reference:36][reference:37] |
| Length | ~35 pages[reference:38] | More than 100 pages longer than House version[reference:39] |
| Network Tokens | Not a defined concept | Explicitly defined and excluded from securities classification[reference:40] |
| Ancillary Assets | Not a defined concept | Defined with disclosure and certification regime[reference:41] |
| Stablecoin Yield | Not addressed | Restricts issuers from offering yield solely for holding[reference:42] |
| DeFi Regulation | Minimal | Explicit framework for SEC and Treasury rulemaking[reference:43] |
| Developer Protections | Limited | BRCA attached; explicit software developer protections[reference:44][reference:45] |
| Status | Passed House (294–134)[reference:46] | Advanced by Senate Banking Committee (May 14, 2026)[reference:47] |
Important: The Senate Agriculture Committee has also released a separate, narrower version — the “Digital Commodity Intermediaries Act” — which focuses on CFTC oversight of digital commodity intermediaries[reference:48][reference:49]. The final bill will need to reconcile all three versions.
If the market structure bill becomes law, it would have significant implications for crypto investors. Here are the key areas to watch.
With clearer classification rules, exchanges may face reduced delisting risks and could list a wider range of tokens with greater confidence. This could improve market access and liquidity for a broader set of digital assets.
The bill would impose disclosure requirements on ancillary asset issuers, providing investors with more information about governance, token economics, and other material characteristics[reference:51]. Regulation Best Interest and investment adviser fiduciary duties would be preserved for digital commodities[reference:52].
The restriction on stablecoin yield could affect how exchanges reward holders and may reduce the attractiveness of holding certain stablecoins[reference:53]. This provision has been controversial and may change during the legislative process.
The bill would bring DeFi protocols within a formal regulatory perimeter for the first time[reference:54]. This could increase compliance costs for DeFi projects but also provide greater legal certainty for users.
You are the founder of a new blockchain project. You are planning to issue a token that will be used to access services on your platform. Under the current regulatory landscape, you face uncertainty about whether your token is a security.
Under the CLARITY Act framework:
Your decision: You design your token to emphasize decentralization and utility, documenting the network's governance structure and algorithmic autonomy. You work with legal counsel to prepare a certification to the SEC that your token is a network token, not an ancillary asset.
ⓘ This scenario is hypothetical and for educational purposes. Actual outcomes depend on the final legislation and SEC/CFTC rulemaking.
This guide is for educational purposes only and does not constitute financial, legal, or tax advice. Legislative and regulatory developments are inherently uncertain. Always verify current information through official sources and consult with qualified professionals before making any investment or business decisions.
The cryptocurrency market structure bill is a proposed U.S. federal law that would establish a comprehensive regulatory framework for digital assets. Its primary goal is to clarify how cryptocurrencies are classified and which federal agencies have jurisdiction over them.
Yes. The CLARITY Act (Digital Asset Market Clarity Act) is the formal name of the market structure bill that passed the House in July 2025 and is currently being debated in the Senate.
The bill creates a new classification framework. Assets that are sufficiently decentralized and have utility (network tokens) are treated as digital commodities under CFTC jurisdiction. Assets tied to centralized issuer efforts and investment contracts remain digital securities under SEC jurisdiction.
Both. The bill divides jurisdiction: the CFTC would have exclusive oversight over digital commodities and spot markets, while the SEC would retain jurisdiction over digital asset securities. This replaces the current case-by-case uncertainty.
Yes. Title VI of the Senate version includes explicit protections for software developers, clarifying that non-custodial and software-based activities do not automatically trigger money transmission or securities regulations.
The bill restricts stablecoin issuers from offering rewards or yield solely for holding the stablecoin. This has been one of the most debated provisions, with industry critics arguing it favors traditional banks.
As of mid-2026, the Senate has not yet passed the bill. The Senate Banking Committee advanced it on May 14, 2026, but it still needs full Senate passage, reconciliation with the House version, and presidential signature. The timeline is uncertain.
If passed, the bill could provide greater regulatory clarity, potentially reducing delisting risks and making it easier for exchanges to list tokens. However, investor protections and market structure could also change significantly.