Skip to content
ContentLora

    Tip: press / anywhere to search.

    Explainer

    What the CLARITY Act does: SEC vs CFTC and digital commodities

    The CLARITY Act is a US bill that would decide which regulator oversees which crypto assets. Tokens tied to the use of a blockchain would be "digital commodities" under the CFTC, while securities stay with the SEC.[1][2][3] The House passed it in 2025, but a Senate vote to begin debate failed 49-50 on September 15, 2026.[4][5]

    Editor reviewedStrict sourcingUpdated CryptoTech policy

    The CLARITY Act tries to answer a long-running question in US crypto policy: is a given token a security, regulated by the SEC, or a commodity, regulated by the CFTC?[2][3] This explainer is the first stop in a short course. It covers the bill’s main ideas, the two regulators, the related stablecoin law and the political fight. This page is for information only and is not financial or investment advice.

    The problem the bill addresses

    US financial law has two big rulebooks. Securities, such as shares, fall under the Securities and Exchange Commission, whose mission is to protect investors and keep markets fair.[6] Commodity derivatives, such as futures, fall under the Commodity Futures Trading Commission.[7] Crypto tokens do not fit neatly into either. Today the CFTC can go after fraud in everyday crypto trading, but there is no federal licence for the exchanges where people buy and sell tokens.[8] The CLARITY Act would create that licence and decide which agency is in charge.[2]

    Under current law the CFTC has anti-fraud and anti-manipulation authority over spot digital commodity markets, but no statutory registration regime for spot intermediaries.[8] H.R. 3633 would give the CFTC exclusive jurisdiction over contracts of sale of digital commodities, including cash and spot transactions, on or through CFTC-registered entities.[9] It would also create registration categories for digital commodity exchanges, brokers and dealers.[2] The SEC keeps jurisdiction over digital commodity activity by brokers and dealers on alternative trading systems and by national securities exchanges.[3] Intermediaries would be covered by the Bank Secrecy Act.[10]

    What is a “digital commodity”?

    The bill’s key term is “digital commodity”. Roughly, it means a token that belongs to a blockchain and gets its value from people using that blockchain.[1] Examples of that kind of use include paying network fees, accessing a network’s services, or voting on how the network is run.[11] Shares, regulated stablecoins and bank deposits recorded on a blockchain do not count.[12] For background on specific networks, see our bitcoin and ethereum pages.

    The House text defines a digital commodity as “a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system”.[1] An asset is intrinsically linked if, for example, it is generated by the protocol, used to transfer value, used to access services or used in decentralized governance.[11] The definition excludes securities (other than certain investment contracts), security derivatives, permitted payment stablecoins and deposits.[12] A separate “mature blockchain system” test asks whether any person or group under common control controls the system.[13] Issuers may sell digital commodities under an SEC exemption capped at $50 million over 12 months, among other conditions.[14] The Senate Banking substitute takes a different approach. It adds “ancillary assets”, network tokens whose value depends on the managerial efforts of their originator, with disclosure duties under the Securities Act.[15]

    How the Senate changed it

    The Senate Banking Committee rewrote the bill. Its version includes a title called the Lummis-Gillibrand Responsible Financial Innovation Act of 2026.[16] It bars crypto platforms from paying interest or yield simply for holding stablecoins, but allows rewards tied to genuine activity.[17][18] It says people who only validate transactions or run nodes are not covered by the Securities Act for that reason alone.[19] It also adds titles on illicit finance, decentralized finance and customer property in bankruptcy.[20] The Senate Agriculture Committee wrote a separate CFTC-focused text, which would need to be merged with the Banking version before a final Senate vote.[21]

    Where it stands

    The House passed the bill 294-134 on July 17, 2025.[4] The Senate Banking Committee reported it 15-9 on May 14, 2026.[22] On September 15, 2026, a cloture vote to begin debate failed 49-50, short of the 60 votes needed.[5][23] A motion to reconsider was entered the same day.[24] Meanwhile, the SEC and CFTC have started writing crypto rules under their existing powers.[25][26] Follow the details in the CLARITY Act tracker.

    Next in this course

    Read the CLARITY Act reference page, then the profiles of the SEC and CFTC. Then see how the bill relates to the 2025 stablecoin law in CLARITY Act vs GENIUS Act, and weigh the arguments in the CLARITY Act debate.

    Questions readers ask

    Who regulates crypto under the CLARITY Act?

    The CFTC would generally regulate trading in digital commodities, including exchanges, brokers and dealers. The SEC would keep jurisdiction over securities and over some digital commodity activity on securities platforms.[2][3]

    What counts as a digital commodity?

    In the House text, a digital asset intrinsically linked to a blockchain system whose value is derived, or expected to be derived, from the use of that system. Securities, permitted payment stablecoins and bank deposits are excluded.[1][12]

    Who regulates crypto exchanges today?

    The CFTC can police fraud and manipulation in spot crypto commodity markets, but it has no general program to register spot exchanges, brokers and dealers. The CLARITY Act would have created one.[8]

    Did the CLARITY Act pass?

    It passed the House 294-134 in July 2025. In the Senate, a cloture vote on the motion to proceed failed 49-50 on September 15, 2026, and a motion to reconsider was entered.[4][5][24]

    Does the CLARITY Act ban stablecoin interest?

    The Senate Banking version would bar crypto platforms from paying interest or yield simply for holding payment stablecoins, while allowing rewards tied to genuine activity. The GENIUS Act already bars issuers from paying such interest.[17][18][27]

    Sources

    Each numbered claim is a statement we checked against the sources listed with it. Status shows how well established it is.

    1. [1]

      The House-passed text defines a digital commodity as a digital asset intrinsically linked to a blockchain system whose value is derived, or reasonably expected to be derived, from the use of that blockchain system. confirmedas of 2026-10-10

    2. [2]

      According to the Congressional Research Service summary, the bill would make the CFTC the general regulator of digital commodity transactions, including digital commodity exchanges, brokers and dealers. confirmedas of 2026-10-10

    3. [3]

      According to the CRS summary, the bill gives the SEC jurisdiction over digital commodity activity by certain brokers and dealers on alternative trading systems and by national securities exchanges. confirmedas of 2026-10-10

    4. [4]

      The House passed H.R. 3633 on July 17, 2025, by a vote of 294 to 134 (Roll no. 199). confirmedas of 2026-10-10

    5. [5]

      On September 15, 2026, the Senate rejected cloture on the motion to proceed to H.R. 3633 by 49 to 50 (Rollcall Vote No. 234), with Sen. Chris Coons not voting. confirmedas of 2026-10-10

    6. [6]

      The SEC was founded in 1934 with a mission of protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation. confirmedas of 2026-10-10

      • SEC mission · U.S. Securities and Exchange Commission · 2023-08-09 (retrieved 2026-10-10)
    7. [7]

      The CFTC was created in 1974; its mission is to promote the integrity, resilience and vibrancy of US derivatives markets through sound regulation. confirmedas of 2026-10-10

    8. [8]

      Under current law the CFTC can police fraud and manipulation in spot crypto commodity markets but has no general program to register or supervise spot exchanges, brokers and dealers; the CLARITY Act would have created one. confirmedas of 2026-10-10

    9. [9]

      The House text gives the CFTC exclusive jurisdiction over contracts of sale of digital commodities, including in cash or spot markets, conducted on or through CFTC-registered entities. confirmedas of 2026-10-10

    10. [10]

      Under the bill, digital commodity exchanges, brokers and dealers would be subject to the Bank Secrecy Act's anti-money-laundering rules. confirmedas of 2026-10-10

    11. [11]

      The House text treats a token as intrinsically linked to a blockchain if, among other things, it is generated by the blockchain's programmatic functioning, used to transfer value, used to access the system's services, or used in its decentralized governance. confirmedas of 2026-10-10

    12. [12]

      The House text's digital commodity definition excludes securities, security derivatives, permitted payment stablecoins and bank deposits. confirmedas of 2026-10-10

    13. [13]

      The House text defines a mature blockchain system as one that, together with its digital commodity, is not controlled by any person or group of persons under common control. confirmedas of 2026-10-10

    14. [14]

      The House text exempts certain primary sales of digital commodities from SEC registration where the issuer has raised no more than $50 million (inflation-adjusted) in the preceding 12 months, subject to other conditions. confirmedas of 2026-10-10

    15. [15]

      The Senate Banking text introduces "ancillary assets", network tokens whose value depends on the entrepreneurial or managerial efforts of the token's originator or a related person. confirmedas of 2026-10-10

    16. [16]

      The Senate Banking Committee's substitute text, reported June 1, 2026, includes a title called the Lummis-Gillibrand Responsible Financial Innovation Act of 2026. confirmedas of 2026-10-10

    17. [17]

      The Senate Banking text bars digital asset service providers from paying interest or yield to US customers solely for holding payment stablecoins. confirmedas of 2026-10-10

    18. [18]

      The Senate Banking text permits rewards based on bona fide activities or transactions that are not economically equivalent to interest on a bank deposit. confirmedas of 2026-10-10

    19. [19]

      The Senate Banking text says a person is not subject to the Securities Act solely for activities such as validating network transactions, running a node or providing computational work. confirmedas of 2026-10-10

    20. [20]

      The Senate Banking text also includes titles on illicit finance, decentralized finance, bank activities, protections for software developers and customer property in bankruptcy. confirmedas of 2026-10-10

    21. [21]

      The Senate Agriculture Committee's text, published in January 2026 as the Digital Commodity Intermediaries Act, focuses mainly on CFTC authority over digital commodity markets. confirmedas of 2026-10-10

    22. [22]

      On May 14, 2026, the Senate Banking Committee voted 15-9 to report the CLARITY Act with a substitute amendment, with two Democrats joining all 13 Republicans. confirmedas of 2026-10-10

    23. [23]

      Invoking cloture on the motion to proceed required 60 votes, three-fifths of the Senate, and would not itself have passed the bill. confirmedas of 2026-10-10

    24. [24]

      After the vote, Sen. Thom Tillis entered a motion to reconsider it, which keeps the bill procedurally alive. confirmedas of 2026-10-10

    25. [25]

      On August 18, 2026, the SEC proposed Regulation Crypto Assets, with a one-time $5 million exemption over four years and a $75 million per-12-month exemption for certain crypto asset investment contracts. confirmedas of 2026-10-10

    26. [26]

      On October 5, 2026, the CFTC published an advance notice of proposed rulemaking on crypto asset transactions, including a new "crypto asset market" subcategory of designated contract market. confirmedas of 2026-10-10

    27. [27]

      The GENIUS Act bars stablecoin issuers from paying holders interest or yield solely for holding, using or retaining a payment stablecoin. confirmedas of 2026-10-10

    Revision history (1)
    1. Page created.

    Created Oct 10, 2026. Last reviewed by an editor on Oct 10, 2026. Next scheduled review: Dec 10, 2026.

    Cite this page

    "What the CLARITY Act does: SEC vs CFTC and digital commodities." ContentLora, updated Oct 10, 2026. https://contentlora.com/explain/clarity-act-explained

    Spotted an error? Suggest a correction or emailcorrections@contentlora.com.

    Keep exploring

    ☰ Contents