The U.S. Just Moved Closer to Regulating Crypto — Here Is What It Means

 



The U.S. Senate Banking Committee voted 15-9 on May 14 to advance the Digital Asset Market Clarity Act, known as the CLARITY Act, moving crypto's first comprehensive regulatory framework one step closer to becoming law. Two Democrats, Senators Angela Alsobrooks and Ruben Gallego, crossed party lines to give the bill its bipartisan margin.

The bill draws a hard line between Securities and Exchange Commission and Commodity Futures Trading Commission jurisdiction over digital assets. It also protects software developers working in decentralised finance from being regulated as money transmitters, provided they do not hold or control user funds.

That protection matters. DeFi builders have operated without legal clarity for years. The bill, if it reaches the Senate floor and clears the 60-vote threshold, would change that.

Senator Cynthia Lummis of Wyoming, who chairs the Senate Banking Subcommittee on Digital Assets, has been working on this legislation since 2022. She warned after the vote that without the CLARITY Act, crypto industry activity will migrate offshore to jurisdictions that engage with regulators constructively. That migration does not stay contained to the United States. Users and builders in Africa, Asia, and Latin America often rely on U.S.-built platforms and U.S.-regulated exchanges. Regulatory uncertainty in Washington ripples outward.

Brian Armstrong, CEO of Coinbase, called the committee vote a historic day for digital assets in America and noted specific improvements in how the bill handles tokenisation, DeFi, and CFTC authority compared to earlier drafts.

The ethics provision is still unresolved. Democrats have said the bill will not reach 60 votes without language on government officials' conflicts of interest in the crypto sector. That negotiation continues.

The CLARITY Act still needs to pass the full Senate, then align with the House version of the legislation before reaching the President's desk. Polymarket currently estimates a 67% probability the bill passes in 2026.

For the full breakdown of what the bill contains and what it means for crypto regulation in the United States, read the complete coverage at CryptoNewsLive.org.

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