In a significant stride toward regulating the burgeoning digital assets market, key Republicans in the U.S. House of Representatives have unveiled the Digital Asset Market Clarity Act. Announced on Thursday, this legislation seeks to lay down a structured framework for cryptocurrencies, a move the industry has eagerly awaited for years. This bill, a successor to the Financial Innovation and Technology for the 21st Century Act (FIT21), is spearheaded by influential Republicans from the House Financial Services and Agriculture Committees.
A New Era for Crypto Regulation?
The proposed 236-page Clarity Act promises comprehensive oversight of digital commodities, granting the Commodity Futures Trading Commission (CFTC) exclusive regulatory authority over cash or spot markets. This approach aligns with current regulatory perspectives, which view the CFTC as a fitting overseer for much of the crypto activity in the United States. Representative Dusty Johnson, a South Dakota Republican and a leading figure on the agriculture subcommittee focused on digital assets, emphasized the necessity of this framework. “America should be the global leader in the digital assets marketplace, but we can’t do that without establishing a clear regulatory framework,” he stated, underscoring the strategic importance of the legislation.
Navigating the Complexities
The Clarity Act outlines a dual registration pathway for crypto platforms, distinguishing between those that deal in digital asset commodities and securities. Platforms engaging in both areas have the option to register with either the CFTC or the Securities and Exchange Commission (SEC). Moreover, the bill permits provisional registrations for entities applying to become digital commodity exchanges, brokers, or dealers while the CFTC drafts the necessary rules.
In a nod to the evolving financial landscape, the bill exempts specific decentralized finance (DeFi) operations and wallet providers from SEC scrutiny. It also restricts regulators from mandating custody firms to maintain customer assets on their balance sheets—a contentious issue previously championed by the SEC. Further, it designates regulatory authority over payment stablecoins to existing oversight bodies, categorically affirming these digital assets are not securities.
The act also addresses the contentious topic of “qualified digital asset custodians,” setting a benchmark for custodians to be under “adequate supervision and appropriate regulation” by federal, state, or foreign authorities—a definition the CFTC will be tasked to clarify. For a deeper dive into the regulatory implications, see our coverage of the SEC’s latest guidance.
The Road Ahead
As the legislative process unfolds, the Clarity Act faces the intricate task of harmonizing with the Senate’s stablecoin bill, which has already cleared several procedural hurdles. However, skepticism remains, particularly among Democrats wary of former President Donald Trump’s alleged ties to the crypto sector—a subplot that could influence the bill’s progress. Some voices in Congress are advocating for a unified legislative approach, combining stablecoin and market structure bills into a single, cohesive push. President Trump has ambitiously called for both bills to reach his desk by August, though insiders warn this timeline may be overly optimistic. This follows a broader pattern of legislative scrutiny, as detailed in U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer.
Meanwhile, the House committees are gearing up for digital assets hearings next week, offering lawmakers a platform to delve into the nuances of the proposed legislation. During these discussions, the crypto sector—and indeed, U.S. financial markets at large—will be watching closely. The Clarity Act could herald a new chapter in the regulation of digital assets, yet whether it will navigate the legislative labyrinth unscathed remains to be seen.
Source
This article is based on: U.S. House Republicans Officially Introduce Crypto Market Structure Bill
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
