While U.S. crypto regulation is mired in indecision, major stakeholders in the digital asset universe are rallying behind fresh legislation that promises to bring much-needed certainty. Sponsored by pro-crypto lobbying organization Stand With Crypto and supported by Coinbase, the Digital Asset Market Structure and Investor Protection Act, often shortened as the CLARITY Act, aims to clearly define which agencies would regulate digital assets.
The proposed bill would officially hand oversight of most cryptocurrencies to the Commodity Futures Trading Commission (CFTC), which could significantly narrow the regulatory reach of the Securities and Exchange Commission (SEC). For companies and investors in crypto, it could mark the end of the regulatory uncertainty that has discouraged expansion and prompted enforcement action.
As the U.S. enters into what’s being dubbed as “Crypto Week”, a week of legislative hearings and policy forums, industry voices are urging Congress to move ahead before innovation leaves American soil.
What Is the CLARITY Act?
Primarily, the CLARITY Act aims to separate digital assets and categorize them into two groups: commodities and securities. Tokens that do not represent investment returns or rights like shares would be defined as commodities and fall under the oversight of the CFTC if the bill becomes a law.
Tokens that are closer to traditional investments, those which are tied to profit expectation or company performance, would remain under the SEC domain.
This two-way model would restrict regulatory uncertainty and allow crypto companies to choose upfront how their assets would be classified. This would accelerate development and improve investor protection through compliance from the outset.
CRYPTO WEEK
NEXT WEEK, crypto policy will take over the House floor.
The Committee’s goal of introducing market structure legislation BEFORE the AUGUST recess.
The GENIUS Act-which is EXPECTED to PASS and head to President Trump’s desk, as well as the CLARITY Act and… pic.twitter.com/QxeJAR4aBg
— Smooth Rey (@SmoothRey) July 7, 2025
Why the Need for Hurry Now?
The crypto industry has grown tired of coping with duplicative and often contradictory regulations. Over the past year, the SEC has gone aggressively after companies that it believes are selling unregistered securities. The enforcement-led strategy has faced criticism for its unpredictability and for stifling innovation within the crypto space.
Legislators are finally hearing industry discontent. Crypto Week unites regulators, policymakers, and industry experts in a focused push to shape the future of digital asset regulation. Supporters see the time as an opportunity to advance bills before the 2025 U.S. electoral cycle makes it harder.
We are on the breaking point,” a representative of one of the most prominent blockchain infrastructure companies stated. “We need legal rails that make sense. The CLARITY Act does just that, it provides definitions and structure without stifling progress.”
Its size, making it one of the largest U.S. crypto exchanges, has made Coinbase particularly loud. Its executives claim that without regulatory clarity, users and developers will abandon ship for more hospitable jurisdictions, further weakening the competitive standing of the U.S.
Stand With Crypto, founded to speak out on behalf of decentralised finance (DeFi), wallet providers, and blockchain startups, is also pushing hard. The coalition argues that small businesses are most vulnerable to unclear rules, and most likely to benefit from this bill.
The SEC vs. CFTC Showdown
The core of the conflict stems from the ongoing power struggle between the SEC and the CFTC over who governs digital assets. While the SEC sees most tokens as investment contracts, the CFTC views them as tradable commodities, something more like commodities.
This has caused legal disputes and uncertainty. Companies having no idea how their assets will be assessed will likely receive fines or litigation placed upon them after they’ve dropped products in good faith.
The CLARITY Act seeks to bring an end to the disagreement by granting the CFTC clearer authority over a broader class of tokens. It is maintained by proponents that it would prevent overreach and stimulate innovation, yet it makes opponents worried that it would erode investor protections.
WATCH: @RepBryanSteil delivers opening remarks at today’s hearing on the CLARITY Act:
“The Golden Age of digital assets is here. …The CLARITY Act will unleash innovation and ensure U.S. dominance in digital assets while protecting consumers from fraud.”
— Financial Services GOP (@FinancialCmte) June 4, 2025
Clarity Could Unlock Institutional Capital
Unclear regulations tend to discourage institutional investors from entering the market. Hedge funds, pension fund managers, and banks avoid digital assets if they do not know what laws govern.
With well-established rules being applied, more large-cap capital would be free to enter the crypto space. That is: better liquidity, more robust infrastructure, and firmer price stability. For retail investors, it might mean safer products and more regulated platforms.
Also Read: Maple Finance Offers Native Bitcoin Yield with Institutional-Grade Security
Crypto Week: Time to Get Momentum
The coming days will feature:
- Congressional hearings on digital asset regulation
- Policy roundtables with regulators and industry stakeholders
- Public campaigns by crypto lobbies
Crypto Week is not just hollow rhetoric, it’s legislative momentum. If the CLARITY Act can garner enough bipartisan support, it will be introduced, then policy, in a few months.
Challenges Ahead
Not everyone, naturally, supports the bill. Some lawmakers fear that it would grant crypto firms too much freedom or undermine the SEC’s power to protect investors.
Legal commentators also question how certain assets, namely, those that evolve from pre-launch funding arrangements to be utilized as utilities, are going to be categorized. Such gray areas could create loopholes, critics argue, unless bill language is tightened.
Still, almost everyone believes regulatory reform is necessary, and long overdue.
What It Means for the Market
If passed, the CLARITY Act would reshape the crypto space in the United States:
- Startups would launch with confidence, knowing their position legally
- Exchanges would list tokens more rapidly, supported by clearer rules
- Investors would be able to access safer, compliant products
- Regulators would better be equipped to crack down on actual abuses, not simply questions
For mainstream users, it could mean less surprise, reduced risk, and more protections.
Last Thought: Clarity Could Define Crypto’s Future
The crypto lobby is not seeking regulatory favoritism, it’s seeking consistency. The CLARITY Act represents a solid opportunity to bring structure to regulatory uncertainty, allowing the crypto sector to develop with greater confidence and stability.
Whether Congress listens or not is questionable. But with Crypto Week on the go and public opinion shifting, the moment of truth is now.
If the US is to rule the future of decentralised finance, it needs to figure out how to comprehend its regulations, and quickly.
