The CLARITY Act Faces Its Decisive Senate Test

The CLARITY Act remains the most consequential crypto legislation before Congress. It cleared the House in July 2025 and has spent the time since in the Senate, where the market structure question it answers has proved harder to move than the stablecoin question that preceded it.

What it would settle

The bill draws the boundary between SEC and CFTC jurisdiction in statute rather than leaving it to enforcement, guidance and litigation. That boundary is currently described by a joint SEC-CFTC interpretation classifying sixteen major assets, including bitcoin-adjacent and payment tokens, as commodities.

An interpretation is not a law. It can be withdrawn by the agencies that issued it, narrowed by a court, or reversed by a subsequent administration. Firms building custody, clearing and listing operations around it are building on a foundation that a change of leadership can move. Statute is what makes those investments safe.

Why it has been slow

Stablecoin legislation succeeded because the object being regulated is simple to describe: a fully reserved dollar liability. Market structure is not simple. It requires Congress to decide which regulator oversees spot trading venues, how custody is treated, what disclosure a token issuer owes and at what point a network becomes decentralised enough to change the answer. Each of those has an incumbent constituency with a settled view.

The interaction nobody should ignore

CLARITY does not sit alone. The SEC's proposed Regulation Crypto Assets, with comments due 20 October, offers a safe harbour by which a token can shed security status. The OCC's stablecoin rules are targeted for November. If the Act passes in a form that contradicts either, the agencies will be rewriting rules they have only just finished.

Firms planning compliance programmes should be modelling the combinations rather than any single outcome. The most expensive mistake available this year is building for one rulebook and getting a different one.