The US crypto industry has spent years in a regulatory twilight zone, unsure whether its tokens are securities, commodities, or something else entirely. Sen. Cynthia Lummis wants to turn the lights on.
Lummis, who chairs the Senate Banking Subcommittee on Digital Assets, threw her weight behind the Digital Asset Market Clarity Act of 2025, better known as the CLARITY Act. The bill cleared the Senate Banking Committee on May 14 with a 15-9 vote, with all Republicans and two Democrats voting in favor. At the Bitcoin 2026 conference, Lummis announced the next step: a markup in May, positioning the legislation for a potential summer Senate floor debate.
What the CLARITY Act actually does
The CLARITY Act attempts to resolve the SEC-CFTC jurisdictional dispute by drawing a clear line between the two agencies. Most tokens would be classified as digital commodities, placing them under CFTC oversight. Securities fall under the SEC’s domain, which brings with it a far heavier regulatory burden, including registration requirements that many crypto projects have argued are impractical for decentralized networks.
The legislation also includes provisions aimed at protecting decentralized finance developers and addressing stablecoin yields. DeFi builders have long worried that writing code could be treated the same as operating a financial institution.
The long road to this vote
This bill builds on years of legislative groundwork, most notably the Lummis-Gillibrand Responsible Financial Innovation Act, which the Wyoming senator co-authored with Sen. Kirsten Gillibrand. That earlier effort laid the conceptual foundation for splitting crypto oversight between the SEC and CFTC.
The House version of the CLARITY Act passed in July 2025 with a 294-134 vote. The Senate’s 15-9 committee vote was narrower, with two Democrats crossing party lines.
Lummis stated that only about 1% of the work remains to achieve full bipartisan support. The senator also issued a warning: if Congress fails to pass the bill in 2026, comprehensive market-structure regulations for digital assets could be delayed until at least 2030.
What this means for investors
Classifying most tokens as digital commodities under CFTC jurisdiction would provide the legal clarity that institutional investors have been demanding. It would also reduce the existential risk hanging over many crypto projects from the possibility of receiving an SEC enforcement action arguing their token is an unregistered security.
For DeFi specifically, provisions protecting developers from being treated as regulated financial intermediaries would remove one of the biggest legal risks in the space. The stablecoin yield provisions are also significant, as stablecoins have become the backbone of crypto market infrastructure.
The bill still faces real obstacles before reaching President Trump’s desk. Senate floor dynamics are unpredictable, and the narrow committee margin suggests the full chamber vote won’t be straightforward. But the bipartisan House vote and the committee advancement give the legislation more momentum than any previous attempt at comprehensive crypto regulation has enjoyed.