The Digital Asset Market Clarity Act is a crypto market structure bill recently passed by the US House of Representatives. It is currently being reviewed and amended before moving to a full floor vote in the US Senate. The bill was passed with bipartisan support with a vote of 294-134 by the House of Representatives in July.
Proponents of the Clarity Act say it will help to protect consumers, encourage innovation in the crypto industry, provide incentives to investors and builders and maintain the US’s lead in crypto.
One of the bill’s most important provisions is the formal classification of digital assets. The Clarity Act seeks to clearly distinguish between commodities, securities (investment contracts), and stablecoins.
Under the proposed framework, digital assets classified as commodities would fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC).
Securities would remain under the oversight of the Securities and Exchange Commission (SEC). This distinction is critical because regulatory uncertainty has long clouded the industry.
The bill also introduces a new maturity test specifically for digital assets. Unlike the traditional Howey Test, this updated standard evaluates blockchain-specific characteristics like decentralization, transparency, open-source development and real-world usage.
Stablecoins, which are typically pegged to the US dollar, have grown popular for payments, transfers, and yield-generating strategies.
However, the Clarity Act may restrict or ban yield-bearing stablecoin products offered through centralized and decentralized platforms.
Lawmakers argue that such yield programs resemble high-risk financial products that lack deposit insurance or guarantees. Supporters of the bill believe stricter oversight could reduce systemic risks and protect retail investors.
On the other hand, exchanges and crypto platforms warn that limiting yield products may reduce innovation and user participation.
The bill also builds upon earlier stablecoin proposals by creating a distinct regulatory category for these assets, potentially introducing joint oversight mechanisms.
The Clarity Act introduces improved investor protections through its requirement that businesses must separate their customer funds from their operational assets.
The requirement for exchanges and brokers to establish stronger risk management systems comes together with their obligation to follow Anti-Money Laundering (AML) regulations.
The new rule gives regulators additional power to investigate fraud cases and to stop deceptive marketing methods.
The process of following the regulations will make compliance more expensive for businesses although it will bring benefits through higher market stability and better trustworthiness.
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If enacted, the Clarity Act could open a more structured regulatory era for crypto markets. The new regulations will provide clearer guidelines. They will also drive institutional investment and support ETF development. The new regulations will change how decentralized and yield-based systems operate.
The bill brings both stabilization and transformation to investors as it shows digital assets are approaching conventional financial rules and still allowing smart development.