The Digital Asset Market Clarity Act, the centerpiece of the US crypto market structure bill effort, passed the House on July 17, 2025, by a vote of 294 to 134 and is now sitting in two competing Senate committees. The two drafts must be reconciled and merged before going for a full Senate vote.
The bill assigns primary regulatory oversight of digital commodities to the CFTC while limiting SEC jurisdiction over assets that qualify under its new classification framework, replacing what Senate Banking has called the prior regulation-by-enforcement model.
Key Takeaways
- The CLARITY Act passed the House by a bipartisan 294-134 vote, with 78 Democrats joining Republicans in support.
- Senate Banking released a 278-page draft on January 12, 2026, prohibiting passive yield on stablecoin balances while allowing activity-linked rewards.
- The Senate Agriculture Committee’s Digital Commodity Intermediaries Act, released January 21, 2026, gives the CFTC exclusive jurisdiction over registered digital commodity exchanges.
- A “mature blockchain” cannot be controlled by any person or group holding 20% or more of tokens, the test that flips a digital asset from security to commodity status.
- The Senate Banking RFIA discussion draft includes a $75 million ancillary asset exemption threshold under SEC authority.
- The CFTC and SEC signed a landmark Memorandum of Understanding on March 11, 2026, harmonizing enforcement to avoid duplicative actions.
Editor’s Choice
- The bill was introduced by House Financial Services Committee Chairman French Hill on May 29, 2025.
- House Committees on Financial Services and Agriculture voted to advance the bill on June 10, 2025, with bipartisan majorities.
- Senate Banking Chairman Tim Scott held a markup on January 15, 2026, releasing a manager’s amendment.
- The CFTC issued joint interpretation 9198-26 with the SEC on March 17, 2026, describing five token categories.
- More than 100 crypto firms signed an industry coalition letter on April 23, 2026, urging a Senate Banking Committee markup.
- Senators Tillis and Alsobrooks released the stablecoin yield compromise text on May 1, 2026, ahead of an expected mid-May markup.
What Is the Crypto Market Structure Bill?
The bill establishes clear rules by drawing a bright line between SEC and CFTC jurisdiction and replacing the SEC’s regulation-by-enforcement model with a workable statutory framework, according to Senate Banking Committee materials.
On June 10, 2025, bipartisan majorities of the House Committees on Financial Services and on Agriculture voted to advance the Digital Asset Market Clarity Act of 2025. The bill was introduced by House Financial Services Committee Chairman French Hill on May 29, 2025.
The bill is best understood as the operational follow-on to FIT21, the 2024 House-passed market structure framework that died in the Senate. Where FIT21 created the conceptual scaffolding, the CLARITY Act fills in registration mechanics, custody rules, and stablecoin-yield carve-outs that practitioners need before launching compliant US products.
How the CLARITY Act Splits SEC and CFTC Jurisdiction
The CFTC has exclusive anti-fraud and anti-manipulation authority over digital commodities and intermediary registration, while the SEC has exclusive jurisdiction over investment contract asset issuance and maintains anti-fraud authority on SEC-registered platforms.
The legislation establishes a regulatory structure dividing jurisdiction between the CFTC and SEC, defines digital commodity classes, and creates registration categories for digital commodity exchanges, brokers, and dealers.
On January 30, 2026, SEC Chair Paul Atkins and CFTC Chair Michael Selig announced that Project Crypto, previously an SEC-led initiative, would proceed as a joint effort between the SEC and the CFTC to harmonize federal oversight of digital asset markets. On March 11, 2026, SEC Chairman Paul S. Atkins and CFTC Chairman Michael S. Selig signed a landmark Memorandum of Understanding on regulatory harmonization.
By the numbers: According to Arnold & Porter’s advisory on the CLARITY Act, the CFTC has exclusive anti-fraud and anti-manipulation authority over digital commodities and intermediary registration, while the SEC has exclusive jurisdiction over investment contract asset issuance and maintains anti-fraud authority on SEC-registered platforms. The split is the first clean statutory boundary between the two agencies for digital assets in US history.
Defining Digital Commodity, Mature Blockchain, and Restricted Digital Asset
The CLARITY Act defines a Digital Commodity as a digital asset intrinsically linked to a blockchain system, with value directly related to the functionality or operation of the blockchain system. Investment Contract Assets are digital commodities sold for capital-raising that can be held peer-to-peer on blockchain and become ordinary commodities after secondary market resale.
A Mature Blockchain must be (1) functional for transactions and services, (2) open-source, (3) operate on transparent rules, (4) not controlled by a single person or group (including 20%+ token holders). A digital asset on a non-mature blockchain falls under SEC jurisdiction as a security; once the blockchain meets the maturity test, the asset transitions to CFTC commodity status.
Permitted Payment Stablecoins are assets designed as payment means, denominated in national currency, with an issuer subject to banking regulator supervision and obligated to repurchase at a fixed value.
How Exchanges, Brokers, and Dealers Register Under the Bill
CFTC-registered exchanges must segregate customer funds, use qualified custodians, list only compliant issuers, provide retail disclosures, and prohibit mandatory blockchain service participation.
Broker-dealers need CFTC registration with capital standards, custody requirements, and futures association membership. The bill folds digital commodity broker-dealers into the existing futures association framework, easing the compliance lift for firms that already hold CFTC registrations for derivatives.
Qualified Digital Asset Custodian status requires supervision by banking or securities regulators.
| Registration Class | Primary Regulator | Custody Standard | Capital Floor |
| Digital Commodity Exchange | CFTC | Qualified Digital Asset Custodian | Set by CFTC rule |
| Digital Commodity Broker-Dealer | CFTC + futures association | Qualified custody + segregation | Set by CFTC rule |
| Digital Commodity Dealer | CFTC | Qualified custody | Set by CFTC rule |
| Stablecoin Issuer | Federal banking regulator | Bank-equivalent supervision | GENIUS Act framework |
Senate Banking vs Senate Agriculture: Two Bills in Search of One Reconciliation
On January 12, 2026, the Senate Banking Committee released a 278-page draft bill, which prohibits digital asset service providers from offering interest or yield to users for simply holding stablecoin balances, but allows for stablecoin rewards or activity-linked incentives.
Senate Agriculture Committee Chairman John Boozman released the updated bipartisan crypto market structure text titled the Digital Commodity Intermediaries Act on January 21, 2026, with a markup and hearing scheduled for January 29, 2026.
The Senate Agriculture Committee discussion draft is led by Chairman John Boozman (R-AR) and co-sponsored by Senator Cory Booker (D-NJ). The draft defines Digital Asset as any representation of value which is recorded on a cryptographically-secured distributed ledger, and Digital Commodity as any fungible asset that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary.
The Ag text preserves joint rulemaking by the SEC and CFTC for exchanges and intermediaries, mixed digital asset transactions, portfolio margining transactions, and conflicts of interest. The legislation provides expedited registration and provisional status, with the CFTC taking effect no later than 180 days after enactment.
The discussion draft extends the effective date to 18 months, compared to the CLARITY Act’s 270 to 360 days. The longer runway gives industry more time to comply, but pushes meaningful rulemaking past the next election cycle.
Key finding: According to Davis Wright Tremaine’s January 2026 analysis of the Senate Agriculture Committee text, the bill incorporates definitions relating to blockchain and decentralized finance from the House CLARITY Act, includes network tokens and certain ancillary assets as digital commodities, and excludes securities, stablecoins, banking deposits, commodities, pooled vehicles, and collectibles. Memecoins are newly added to the digital commodity definition.
How the Bill Closes the GENIUS Act Stablecoin Yield Loophole
The draft market structure bill prohibits yields for simply holding stablecoin balances but allows activity-linked incentives like transacting, staking, providing liquidity, or posting collateral.
On May 1, 2026, Senators Thom Tillis and Angela Alsobrooks released a compromise on stablecoin yield in the CLARITY Act, banning yield equivalent to bank deposits but allowing bona fide activities. The text bars crypto firms from paying interest or yield on stablecoin balances in a manner economically or functionally equivalent to a bank deposit.
The compromise narrows what was a genuine policy gap. The GENIUS Act, signed in 2025, banned interest payments by payment-stablecoin issuers but did not stop platforms from offering rewards on customer balances that functioned like a deposit yield. Without the CLARITY Act language, a crypto exchange could route the yield through a non-issuer entity and reproduce the bank-deposit economics the GENIUS Act tried to close.
Stablecoin issuers and platforms can no longer offer passive, bank-like returns just for holding assets, but rewards tied to actual usage remain protected. The line is drawn around “bona fide activities”, staking, liquidity provision, and posting collateral, which arguably represent compensable risk-taking rather than synthetic deposit substitutes.
Custody, Conflict of Interest, and Consumer Protection Provisions
Digital commodity exchanges must hold customer digital assets with qualified digital asset custodians, though the CFTC may grant exemptions. Segregation prevents commingling of the kind that wiped out customer balances when FTX became insolvent.
The Senate Agriculture draft adds a private right of action for digital commodity transactions, mandates Chief Compliance Officers work solely for the regulated entity, and establishes ongoing CFTC inspection authority.
The bill ensures that centralized digital asset intermediaries are subject to an appropriate sanctions framework and gives law enforcement new, targeted tools to combat money laundering, terrorist financing, and sanctions evasion. The bill explicitly preserves OFAC authority and Bank Secrecy Act obligations rather than carving crypto out of those regimes.
How the SEC and CFTC Are Coordinating Without Waiting for the Bill
On March 17, 2026, the CFTC joined the SEC in clarifying the application of federal securities laws to crypto assets. CFTC Chairman Selig said American builders, innovators, and entrepreneurs have awaited clear guidance on the status of crypto assets.
The CFTC stated it would administer the Commodity Exchange Act consistent with the SEC’s interpretation and that certain non-security crypto assets could meet the definition of “commodity” under the CEA. The interpretation provides a coherent token taxonomy for digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.
On enforcement, the SEC-CFTC Memorandum of Understanding targets duplicative agency actions for the same conduct, with the agencies agreeing to identify matters involving potential jurisdictional overlap at the commencement of any enforcement investigation and coordinate on potential charges, remedies, filings, strategy, and communications. The MOU does not change statutory authority but reduces double-tracked investigations.
Where the Bill Connects to Stablecoin and Prediction Market Regulation
The market structure bill does not exist in a vacuum. The GENIUS Act governs stablecoin issuance, the CLARITY Act governs platforms that handle stablecoin balances, and any future statute on stablecoin investment products would sit over both.
The Lummis-Gillibrand RFIA defines digital assets as natively electronic assets that confer economic, proprietary, or access rights or powers and are recorded using cryptographically secured distributed ledger technology or similar means. The CFTC would have exclusive jurisdiction over digital assets, subject to several exclusions, including digital assets that provide rights with respect to a business entity such as debt or equity interests, liquidation rights, dividends, or profit shares.
The CFTC would not have jurisdiction over digital collectibles and other unique digital assets, including NFTs. The Responsible Financial Innovation Act of 2026 allows major banks to offer digital asset custody, staking, and payments under proper supervision. Prediction markets trade on event outcomes and sit at the boundary between CFTC event-contract authority and the digital commodity framework.
For tracking how exchange registration changes affect concentration, see the crypto exchange market share statistics pillar.
Current Legislative Status and What Comes Next
More than 100 crypto firms signed a coalition letter on April 23, 2026, urging the Senate Banking Committee to schedule a markup on the market structure bill. Industry advocates, including Coin Center and the Blockchain Association, argued that prolonged regulatory uncertainty pushes development offshore and exposes US consumers to platforms operating without federal oversight.
As of late April 2026, Senate talks over the bill’s final text continue, with no firm date set, and reports indicate senators still disagree on how far to relax rules for trading platforms and reward programs. The Tillis-Alsobrooks compromise on stablecoin yield, released the following week, marked the most concrete movement in months.
The latest Senate Banking draft incorporates a separate bipartisan measure from Senators Cynthia Lummis and Ron Wyden that would shield software developers and infrastructure providers from being treated as financial intermediaries simply for creating or maintaining code. The developer-shield provision answers concerns that smart contract authors and node operators could face money transmission liability.
For ongoing momentum signals around the legislation itself, see Senate floor activity on the crypto market bill.
Frequently Asked Questions (FAQs)
The crypto market structure bill establishes clear rules by drawing a bright line between SEC and CFTC jurisdiction and replacing the SEC’s regulation-by-enforcement model with a workable statutory framework. The CLARITY Act and competing Senate Banking and Agriculture drafts together define digital commodities and set exchange and broker registration rules.
The CLARITY Act passed the House on July 17, 2025, by a vote of 294 to 134 with bipartisan support. The bill was introduced by House Financial Services Committee Chairman French Hill on May 29, 2025, and both the Financial Services and Agriculture committees advanced it on June 10, 2025.
A Mature Blockchain must be (1) functional for transactions and services, (2) open-source, (3) operate on transparent rules, (4) not controlled by a single person or group (including 20%+ token holders). An asset on a mature blockchain qualifies as a digital commodity under CFTC jurisdiction; assets on non-mature blockchains remain under SEC oversight.
The draft market structure bill prohibits yields for simply holding stablecoin balances but allows activity-linked incentives like transacting, staking, providing liquidity, or posting collateral. Senators Thom Tillis and Angela Alsobrooks released a compromise on stablecoin yield in the CLARITY Act on May 1, 2026, banning yield equivalent to bank deposits but allowing bona fide activities.
The CFTC has exclusive anti-fraud and anti-manipulation authority over digital commodities and intermediary registration, while the SEC has exclusive jurisdiction over investment contract asset issuance and maintains anti-fraud authority on SEC-registered platforms. On March 11, 2026, SEC Chairman Paul S. Atkins and CFTC Chairman Michael S. Selig signed a landmark Memorandum of Understanding on regulatory harmonization.
Senate Banking Committee Chairman Tim Scott held a markup on comprehensive digital asset market structure legislation on January 15, 2026. A markup and hearing was scheduled for January 29, 2026, in the Senate Agriculture Committee. The two drafts must be reconciled and merged before going for a full Senate vote, after which the reconciled bill returns to the House.
Conclusion
The crypto market structure bill is the most consequential US digital asset legislation in years. The CLARITY Act passed the House on July 17, 2025, by a vote of 294 to 134, demonstrating bipartisan consensus.
Practitioners should treat the framework as directionally locked even before the final text passes. The CFTC vs SEC split, the 20% control test for blockchain maturity, the qualified custodian requirement, and the stablecoin activity-linked-yield carve-out have all survived multiple drafting rounds across both chambers.
Firms positioning for the post-CLARITY environment are restructuring custody, registering with futures associations, and decoupling stablecoin reward programs from passive holdings. Tracking infrastructure for this rulemaking lives at the SEC-CFTC Project Crypto coordination dashboard.
