The CLARITY Act, passed by the House in 2025, aimed to replace the U.S. approach of ad‑hoc enforcement with a statute that spells out who regulates which crypto activities and when. It proposed a lifecycle model for token classification and a formal “maturity” test for blockchains.
The Clarity Act bill sought to codify a clear division of authority: the Commodity Futures Trading Commission would oversee “digital commodities” and their spot markets, while the Securities and Exchange Commission would retain exclusive jurisdiction over tokens sold as part of capital formation as “investment contract assets.”
This two‑lane model was described in detail in advisory analyses and legal summaries circulated in 2025, and it was designed to end years of overlapping enforcement actions by giving each agency a defined role.
Under the proposal, permitted payment stablecoins would be regulated by banking regulators at the issuer level, while both the SEC and the CFTC would keep anti‑fraud and anti‑manipulation authority over transactions on their registered platforms. The practical effect: exchanges, custodians and broker‑dealers would face clearer rules on segregation, capital and reporting when listing or handling assets falling under each regime.
The Act introduced a three‑tier taxonomy that moved beyond a static Howey test by assessing an asset across its lifecycle. A token initially sold in a capital raise would be treated as an investment contract during issuance and transition to a digital commodity once resold by a non‑issuer in secondary markets.
A central mechanism was the statutory concept of “blockchain maturity.” Issuers or governance systems could file for a maturity certification; the SEC would have a 60‑day window to rebut such claims. The bill also contemplated timeframes — typically up to four years from enactment — to prevent indefinite limbo for projects that sought to transition from SEC oversight to the CFTC’s commodity framework.
Clarity Act politics and market impact
The measure drew bipartisan backing in the House but then ran into friction in the Senate and lost support from some industry players; reports in early 2026 noted that at least one major exchange withdrew its backing. Those political headwinds left the proposal stalled in the upper chamber after clearing the House, illustrating the legislative risk that accompanies structural change in crypto regulation.
For market participants, the Act’s principal implication was predictability: a statutory taxonomy and a defined pathway to commodity status could lower legal execution risk for institutional entrants and clarify custody and listing requirements for venues. At the same time, firms that had relied on existing enforcement ambiguities to shape business models faced a narrower compliance corridor.
Investors and market operators are now focused on the Senate’s next steps and on the operational details of maturity certification and secondary‑market treatment; those processes will determine whether the theory of clearer rules translates into wider institutional participation and changed risk profiles for token issuers and custodians.
