Author: @milesjennings
Compiled by: Jia Huan, ChainCatcher
The Senate Banking Committee has just voted bipartisan to advance crypto “market structure” legislation (i.e., legislation on market division of labor, regulatory responsibilities, and trading rules), a historic moment for the crypto industry.
Why? Because the Digital Asset Markets Clarity Act will ultimately establish clear rules for blockchain networks and digital assets.
For the past decade, the United States has lacked clear regulations, resulting in distorted markets, stifled innovation, and consumers exposed to enormous risks. CLARITY will end this situation.
The Securities Act of 1933 established investor protection mechanisms, underpinning capital formation and innovation in the United States for the next century. The significance of CLARITY is similar—it represents a once-in-a-lifetime shift in the US financial regulatory landscape, bringing tremendous opportunities.
With its passage through the Senate today, this fundamental legislation, crucial to the entire crypto industry, is closer than ever to becoming law.
Whether it's startup founders, consumers, or large traditional financial institutions and investors migrating to the blockchain, everyone will benefit.
Next, the bills from the two congressional committees will be merged into a single complete bill, which will then be voted on by the full Senate. If passed, it will be sent to the House of Representatives for approval, and if successful, to the White House for the President's signature.
Why does the US need CLARITY now?
Over the past decade, the crypto industry has expanded rapidly, but the United States has consistently lacked a comprehensive regulatory framework. Regulators have been forced to piece together existing regulations to govern the industry, a practice that has proven utterly ineffective.
This has not only caused confusion in legal interpretation and inconsistent statements, but has also led to serious overreach and abuse of power by the government.
This regulatory uncertainty not only hinders innovation but also provides fertile ground for unscrupulous players. The highly publicized negative news surrounding the crypto space over the past decade has highlighted how malicious individuals have easily launched products that exploit regulatory loopholes and prey on consumers.
At the same time, responsible builders face the questionable practice of "substituting law enforcement for legislation."
This uncertainty has pushed crypto development overseas. When the U.S. can no longer provide space for innovation, entrepreneurs are turning to other jurisdictions, including those with more sophisticated regulatory systems.
The EU's Crypto Asset Market Regulation (MiCA) and the UK's crypto regulations are two examples of the US lagging behind.
Fortunately, no other jurisdiction has yet gotten the regulatory framework right for American innovation. But tailored regulatory systems will ultimately attract and concentrate entrepreneurial activity in these regions, along with the economic value and jobs they create.
Imagine what the U.S. economy would be like if Amazon, Apple, Facebook, Google, Microsoft, Netflix, NVIDIA, and Salesforce had all been founded outside the U.S.
Therefore, if the United States can provide regulatory clarity to builders, domestic innovation will greatly benefit. The GENIUS Act (Guiding and Establishing National Innovation for Stablecoins) passed by the United States in July 2025 is a typical example.
GENIUS has established a regulatory framework for stablecoins (digital assets pegged to fiat currencies and typically pegged to the US dollar), giving rise to a new model: open monetary infrastructure.
The passage of this bill has led to unprecedented growth and adoption, which is beneficial to the US economy and the long-term dominance of the dollar.
When the legal framework is designed to both foster innovation and protect consumers, the United States can lead the way, and the world will benefit.
Entrepreneurs and early adopters who believe in the promise of crypto deserve a clear regulatory framework to realize their vision, regardless of how others perceive it.
They also need a framework that acknowledges the potential of blockchain networks to drive a significant and novel transformation of technology platforms. This transformation must move beyond speculative applications fueled by poor policies, allowing people to build beyond the initial financial scenarios (which are already covered by current US regulations).
CLARITY was designed specifically to establish such a clear framework.
How did we get to this point?
The Clarity Act is not entirely new. Many of its concepts and principles are derived from existing commodity and securities laws. This act also evolved from previous legislative iterations, including two "market structure" bills originating in the House of Representatives:
The 21st Century Financial Innovation and Technology Act of 2024, also known as "FIT21" (HR 4763); and the Digital Asset Markets Clarity Act of 2025 (HR 3633).
Similar to the current Senate bill, FIT21 and the House version of CLARITY both attempt to provide a path for blockchain networks to:
- Launching blockchain networks and digital assets safely and effectively in the United States;
- Clarify the regulatory division of labor between the SEC and CFTC in the crypto space, and determine whether digital assets are securities or commodities;
- Ensure oversight of crypto exchage;
- Further protect U.S. consumers by imposing rules on crypto transactions.
Two years ago, FIT21 was passed with overwhelming bipartisan support (279 votes in favor and 136 against, including 71 Democrats in favor).
The House version of CLARITY passed in July 2025 with higher bipartisan support (294 votes in favor to 134 against, including 78 Democrats in favor).
These bills, taken together, send a strong signal to the Senate: accelerate legislation on the structure of the crypto market.
The Senate version of CLARITY builds upon the momentum of bipartisan cooperation in the House and improves upon previous bills on several key points (see below). This bill has been progressing in the Senate for several years, with the past year being its most rapid phase:
- In June 2022 , Senators Lummis and Gillibrand first introduced the Lummis-Gillibrand Responsible Finance Innovation Act, the first bipartisan legislative proposal aimed at establishing a comprehensive regulatory framework for the crypto industry.
- In July 2025 , the Senate Banking Committee (the committee that oversees the SEC) released a draft bill under its jurisdiction that merged and unified the approaches of the Lummis-Gillibrand Act and the House version of CLARITY.
- The initiative seeks to release information, gather feedback and legislative solutions, aiming to find a balance between innovation and maintaining financial stability and protecting consumers.
- In September 2025 , based on feedback received, the Senate Banking Committee released a second discussion draft.
- In January 2026 , the Senate Banking Committee released another iteration, reflecting the results of months of bipartisan negotiations.
- Also in January 2026 , the Senate Agriculture Committee released and advanced a draft bill on market structure legislation within its jurisdiction.
- Today (May 14, 2026) , the Senate Banking Committee just advanced its part of the CLARITY Act during its "deliberation" session.
Why CLARITY is important: The internet is not a company
For over a century, establishing companies has been a major driving force behind innovation in the United States. This path is well-established: entrepreneurs raise funds to start a business, and upon success, generate profits to reward shareholders.
U.S. law has been meticulously crafted for this model, defining responsibilities and emphasizing transparency to align incentives and manage trust in founders and operators.
This framework is suitable for building a company. But it's not suitable for building a network.
The existing legal framework presupposes control by a single administrator and requires that control to persist indefinitely. However, networks have no controlling party. Networks coordinate people, capital, and resources through shared rules, not through centralized ownership.
By forcibly imposing a corporate framework onto the internet, the internet is distorted into a corporate structure. Control is re-centralized, intermediaries re-emerge, and those who depend on the system are exploited.
Looking at the digital economy as a whole, this dynamic has spawned a number of corporate networks with enormous centralized power—payment systems, e-commerce marketplaces, social platforms, app stores—that capture a disproportionate share of the value created by participants.
Ride-hailing users pay $100 for a ride, but the driver only gets a small portion. Musicians create songs that are listened to by millions of people, but they only receive a few cents out of every dollar they earn.
Where corporate networks dominate, the vast majority of value flows to intermediaries. Traditional corporate law protects these intermediaries and their investors, but users, creators, and workers are left unprotected.
For most of the internet age, this trade-off was unavoidable. Open protocols lacked a sustainable economic model and couldn't compete with the capital and coordination capabilities behind corporate networks.
Blockchain has changed that.
Blockchain and the software protocols deployed on it have given rise to a new type of system: blockchain networks. These networks are designed to decentralize control, operate according to transparent rules, and exist as shared infrastructure owned and operated by users.
The value of a blockchain network increases with public use and can be distributed among participants—including those at the network edge—rather than being taken away solely by the central node.
Blockchain makes it possible to "build networks that truly function like networks rather than like companies".
Blockchain technology is at a critical juncture. The past platform transformations—personal computers, mobile phones, and the internet—have been among the most important technological innovations in human history. The emergence of artificial intelligence is rapidly becoming one of them.
But all these platform transformations ultimately lead to a high degree of centralized power and control, with a small number of people deciding the fate of countless consumers, creators, and developers who depend on these technologies and services.
As more and more economic activities become digitalized and more and more processes are shaped by artificial intelligence, the question of "who will control the digital systems we depend on" has become more critical than ever before.
If this control continues to be centralized, then the ability to shape outcomes, restrict access, and extract value will also become centralized: companies will dominate how the network operates and determine who benefits from it.
Decentralized blockchain networks offer another way: an infrastructure that no single participant can easily rewrite, censor, or redirect.
In other words, this kind of network can help decentralize existing platforms, replacing them with networks that possess the attributes of digital public goods—reducing lock-in effects, distributing control, embedding neutrality, reducing the risk of single points of failure, and returning ownership to users.
The goal of the CLARITY Act is to make this path truly viable.
We will share more details about what CLARITY specifically means for crypto builders once it enters full Senate consideration and is updated.
But if CLARITY passes the next few steps in the legislative process, the legal framework in the United States will finally align with the nature of blockchain networks. Builders will be able to operate transparently, raise funds domestically, and build for the long term, no longer forced to make structural compromises due to regulatory ambiguity.
As more and more projects operate within, rather than outside, U.S. regulations, regulators and law enforcement will have better tools to combat the fraud and abuse that have long plagued the industry.
We've already seen what happens when crypto gains viable regulation: the GENIUS Act unleashed a wave of innovation overnight. Today, we can already see crypto in several mainstream applications, from stablecoins to AI agents, and more—and the best is yet to come.
