Original article | Odaily Odaily( @OdailyChina )
Author｜Azuma ( @azuma_eth )
This morning, overseas cryptocurrency media outlet Decrypt reported that sources revealed that several representatives from Wall Street and the cryptocurrency industry held a closed-door meeting yesterday to resolve their differences on the upcoming cryptocurrency market structure bill (CLARITY) to be submitted to the Senate for consideration.
This closed-door meeting had never been publicly disclosed before, but according to Decrypt, the Securities Industry and Financial Markets Association (SIFMA), a major Wall Street trade organization, participated in the discussions. SIFMA had previously opposed key aspects of the CLARITY bill, including explicitly opposing regulatory exemptions for decentralized financial services such as DeFi and their developers. Sources familiar with the matter revealed that yesterday's talks were "constructive" and "productive" on contentious issues such as DeFi regulation.
CLARITY Core Content Breakdown
CLARITY, short for Digital Asset Market Clarity Act of 2025, was originally introduced on May 29, 2025, by French Hill, Chairman of the House Financial Services Committee, and GT Thompson, Chairman of the House Agriculture Committee. The bill aims to establish a regulatory framework for digital assets, clearly define their classification, and delineate the regulatory responsibilities of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Arnold & Porter, a top law firm in the financial sector, has provided a detailed interpretation of the bill's provisions. Specifically, CLARITY aims to categorize digital assets into three distinct classes: digital goods, investment contract assets, and compliant payment stablecoins.
"Digital goods" are digital assets intrinsically linked to a blockchain system. Their value directly depends on the functionality or operation of the blockchain system, or on the activities or functions it serves when it is created or used. In other words, the value of these digital assets must rely on the functionality of the blockchain network itself, such as payments, governance, access to on-chain services, and incentive structures. It is worth noting that the bill explicitly excludes financial instruments such as securities, derivatives, and stablecoins from the definition of "digital goods."
"Investment contract assets" are digital goods that simultaneously meet the following conditions: first, they can be exclusively held and transferred peer-to-peer without intermediaries; second, they are recorded on the blockchain; and third, they have been or are planned to be sold or transferred under an investment contract (i.e., for financing purposes). This means that if a digital good is sold in a financing scenario (such as an ICO), it will be considered an investment contract asset and treated as a security, falling under the regulatory scope of the SEC. Furthermore, the Clarity Act also separates these investment contract assets from the traditional definition of "investment contract" in U.S. securities law.
However, the security nature of investment contract assets is "temporary." Once the digital asset is sold or transferred again by a third party other than the issuer or its agent, the asset will no longer be considered a security , even if it was initially issued as an investment contract asset. In other words, when the asset enters the secondary market for trading, it no longer meets the definition of an investment contract asset and will be regarded as a pure digital commodity.
"Compliant payment stablecoins" refer to digital assets that meet the following conditions: First, they are designed for use as a means of payment or settlement; second, they are denominated in a fiat currency; third, the issuer is subject to regulation and review by state or federal regulatory agencies; and fourth, the issuer is obligated to redeem them at a fixed monetary value.
- Odaily Note: Compared to the classification of stablecoins as commodities and securities, the content related to stablecoins is not the core content of the CLARITY Act, but it is one of the current focal points of disagreement regarding the bill. The GENIUS Act, which has already passed both houses of Congress and been signed by Trump, tacitly approved yield-generating stablecoins pegged to the US dollar, while SIFMA and the banking industry lobbying teams hope to eliminate related content through CLARITY.
Based on this classification, CLARITY also clarifies the regulatory responsibilities of the two major agencies, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
- Specifically, CLARITY will grant the CFTC exclusive jurisdiction over fraud and manipulation enforcement of digital goods (including cash or spot transactions), and will also require intermediaries handling digital goods—including cryptocurrency exchanges or other brokers and dealers that currently dominate the market—to register with the CFTC.
- Regarding the SEC, CLARITY will be granted exclusive jurisdiction over the issuers and issuance activities of investment contract assets, including related registration, disclosure, and ongoing reporting obligations. The SEC will also retain anti-fraud and anti-manipulation jurisdiction over digital commodity trading conducted by SEC-registered brokers, dealers, or national securities exchanges.
- For compliant payment stablecoins, their issuers will be primarily regulated by banking regulators, but the CFTC and SEC will retain anti-fraud and anti-manipulation jurisdiction over transactions on their registered platforms, respectively.
What is the meaning of CLARITY?
In summary, CLARITY aims to establish a clear and functional federal regulatory framework for the U.S. digital asset market, addressing long-standing issues of regulatory ambiguity and inconsistent enforcement.
Over the past five years, the power struggle between the SEC and CFTC over the regulation of digital assets has shaped the overall landscape of cryptocurrency regulation in the United States.
Under former SEC Chairman Gary Gensler, the agency's stance was that "the vast majority of digital assets are securities," based primarily on the Howey Test established by the U.S. Supreme Court in 1946. The SEC thus argued that most token sales constituted investment contracts and were therefore subject to federal securities laws. This interpretation laid the foundation for the SEC's aggressive enforcement, during which the SEC launched dozens of high-profile enforcement actions against token issuers, crypto exchage, and related service providers.
In contrast, the CFTC prefers to view some digital assets as commodities, especially those with a high degree of decentralization that do not directly generate profits. While the CFTC has consistently attempted to expand its regulatory role in the cryptocurrency market and has repeatedly warned that the current "regulatory vacuum" caused by unclear regulatory responsibilities could jeopardize market integrity, the existing Commodity Exchange Act limits the CFTC's authority in the spot commodity market, concentrating its power primarily on anti-fraud and anti-manipulation enforcement.
The ongoing jurisdictional competition between the SEC and CFTC has left market participants and crypto developers in a gray area—unsure whether their products or services should be regulated by securities or commodity laws. CLARITY is a legislative response to this regulatory impasse, aiming to establish a stable, clear, and long-term framework for the division of responsibilities between the SEC and CFTC through legislation.
For the cryptocurrency industry, the launch of CLARITY will signify a substantial shift in the regulatory environment. This means that there will be more predictable compliance paths in the future, and market participants will be able to clearly understand which activities, products, and transactions fall under the scope of regulation. This will reduce long-term regulatory uncertainty, lower litigation risks and regulatory friction, and ultimately attract more innovators and traditional financial institutions to enter the market.
As for the more direct impact on the market, while it cannot be ruled out that a breakthrough in CLARITY at a key juncture (such as the recent Senate review) could trigger short-term positive news, its longer-term impact lies in making cryptocurrency an "asset class that is more easily allocated by traditional capital." By addressing institutional uncertainties, it allows long-term capital that was previously unable to enter the market to obtain a compliant entry path, thereby raising the valuation floor of the entire market.
What is the progress of CLARITY ? What are the obstacles?
On July 17 last year, CLARITY passed the U.S. House of Representatives with an overwhelming majority (approximately 294–134 votes). However, unlike GENIUS, which progressed smoothly at the same time, CLARITY encountered obstacles in its subsequent transfer to the Senate due to disagreements among various factions.
Overall, the disagreements surrounding CLARITY mainly focus on the regulatory approach to DeFi, the issue of yield-generating stablecoins, and the ethical standards of the Trump family.
Among these, the regulation of DeFi is the most sensitive point of contention between the two sides . Proponents in the cryptocurrency field want to protect developers and open-source software, arguing that code should not be regarded as a regulated financial intermediary; however, Wall Street has expressed concerns about money laundering, sanctions evasion, and national security risks, believing that such safeguards, if too broad, could pose risks, and therefore strongly demands that DeFi be included in the scope of traditional financial regulation.
Another key point of contention lies with yield-bearing stablecoins . As mentioned earlier, GENIUS tacitly approved the existence of this type of stablecoin, but major US banks have been actively lobbying to prohibit stablecoin issuers from transferring the yields of reserve assets (such as Treasury bonds) to holders, in order to prevent this window from causing deposits to flow out of the traditional banking system. The cryptocurrency industry is clearly unwilling to be shackled, and industry representatives are criticizing the protectionism of the banking industry while also emphasizing that GENIUS has resolved the regulatory and licensing issues related to stablecoins, and there is no need to discuss them again.
Due to persistent disagreements, the bill was originally scheduled for consideration in the middle of last year, but was subsequently postponed to October, then to the end of last year, and then to 2026... until this Tuesday, when Senator Tim Scott, chairman of the Senate Banking Committee, officially announced that the committee will vote on the bill on January 15.
Tim Scott, a Republican senator from South Carolina, insisted on the January 15th date, despite widespread concerns within the cryptocurrency industry that it was too rushed to resolve differences and could even jeopardize the bill's chances of passing this year. In an interview with Breitbart, Scott stated, "I think we have to be out in the open and vote. So, next Thursday we will vote on CLARITY. For the past six months, we have worked tirelessly to ensure that every member of the committee has seen multiple drafts."
Therefore, the current situation is that next week's vote will determine whether CLARITY can pass the Senate Banking Committee—a crucial step before CLARITY is finally submitted to the full Senate for consideration. Only with bipartisan support in the committee's review will it have a chance of ultimately passing the Senate. However, according to multiple reports, it is still unclear whether the bill has enough votes to pass the committee's review.
While the closed-door meeting mentioned at the beginning of this article brought some positive news, it's still not enough to guarantee a smooth passage in next week's vote. In Decrypt's report, a representative from the cryptocurrency industry even bluntly stated: "I simply can't believe we're finally seeing Democrats and Republicans actively cooperating on something, and we could kill it because of some arbitrary timetable. "
Jake Ostrovskis, head of over-the-counter trading at Wintermute, took a longer-term view and mentioned the critical timeline for CLARITY's Senate passage: " The market generally believes that April is the last realistic deadline for a full Senate vote (before the political turmoil of the midterm elections) , and to achieve this, the SEC and CFTC need to reach an agreement on the amendments by the end of January. This matter is likely to become further politicized, so as things develop, we expect related news reports throughout January."
In short, next week's Senate Banking Committee vote will kick off the CLARITY's journey. Although the current situation remains uncertain, a clearer directional expectation will emerge next week.
