What Is The CLARITY Act and Why It Is So Important

If you have spent any real time building, trading, or working in crypto in the U.S., you already know the pattern. The rules are never fully clear. Guidance usually comes after the fact. And “compliance” often feels less like a checklist and more like a guessing game.

That is the environment the Digital Asset Market Clarity Act, better known as the CLARITY Act, is trying to change.

On January 15, 2026, the Senate Banking Committee is scheduled to hold a critical markup session on the bill. That might sound like inside-baseball legislative procedure, but it is not. A markup is where lawmakers decide what a bill really is. Language gets tightened. Loopholes get closed or widened. Entire sections can disappear.

For crypto, this is one of those moments where the future shape of U.S. regulation is actually being decided.

The problem CLARITY is trying to solve

Right now, crypto regulation in the U.S. is reactive.

The laws that exist were written long before blockchains, tokens, or decentralized networks. Regulators have mostly tried to force crypto into frameworks that were never designed for it, often relying on enforcement actions to define the rules retroactively.

CLARITY is an attempt to stop doing that.

The bill starts from a simple premise: not everything in crypto is the same, so it should not all be regulated the same way.

Launching a token to fund a network is not the same as trading that token years later. Writing open-source code is not the same as holding customer funds. Running a wallet is not the same as running an exchange.

Those distinctions sound obvious inside the industry. CLARITY tries to make them explicit in law.

Tokens are not frozen in time

One of the most important ideas in the bill is that a token’s legal treatment should not be locked forever to how it was first sold.

Under the current system, if a token was ever distributed in a way that looks like fundraising, it can carry securities risk indefinitely. Even if the network decentralizes. Even if the original team steps away. Even if the token functions more like a commodity than an investment.

CLARITY tries to separate:

• The initial transaction, which may look like an investment contract

• The token itself, once it is broadly distributed and actively used

That distinction matters because it opens the door to secondary markets operating without constant legal uncertainty, while still keeping guardrails around early fundraising.

What “mature blockchain” actually means

To make that transition possible, CLARITY introduces the concept of a mature blockchain system.

Stripped of legal language, the question is pretty straightforward: does anyone actually control this thing?

If a small group can still unilaterally change the rules, supply, or governance, regulators get more leverage. If control is meaningfully distributed and no one actor is calling the shots, the regulatory burden can ease.

The bill creates a certification process around this idea, with a defined window for regulators to challenge a claim of maturity.

This is one of the most debated sections of the bill. It is also one of the most important. The standard has to be real, but it also has to be achievable. Senate changes here could dramatically affect how useful the bill ends up being.

How token launches could work going forward

CLARITY does not remove oversight from token launches. Instead, it tries to make that oversight fit reality.

The bill allows certain token offerings to proceed under an exemption, but only with meaningful disclosures. Projects would need to explain things like:

• How token supply and issuance work

• What rights, if any, token holders have

• How governance actually functions in practice

• What the project plans to build and what risks exist

The shift here is away from clever legal gymnastics and toward plain-English transparency. For founders, that could mean fewer surprises and a clearer sense of what is expected.

Why exchanges are watching this so closely

For U.S. crypto exchanges, CLARITY is largely about secondary markets.

Today, listing a token can feel risky even if that same asset trades freely outside the U.S. The legal line between primary fundraising and secondary trading has never been cleanly drawn.

CLARITY tries to draw that line. If it holds, exchanges would finally have a framework designed specifically for spot crypto markets, instead of trying to fit into rules written for something else.

A bigger role for the CFTC

Another major shift is regulatory jurisdiction.

CLARITY gives the CFTC clear authority over spot markets for digital commodities, not just derivatives. It also creates new registration paths for exchanges, brokers, and dealers that are tailored to how crypto markets actually function.

Importantly, the bill pushes for speed. It directs the CFTC to create an expedited registration process, acknowledging that waiting years for clarity is not realistic in fast-moving markets.

DeFi, software, and where things get tricky

DeFi is where the bill walks a tightrope.

CLARITY says that people should not be treated as regulated intermediaries just for building or maintaining software, running nodes, providing wallets, or supporting non custodial infrastructure. It also makes clear that participating in certain liquidity pools, by itself, should not automatically trigger exchange-level regulation.

At the same time, fraud and manipulation laws still apply.

Supporters see this as long overdue recognition that infrastructure is not the same as custody or brokerage. Critics worry about edge cases, especially where front ends, admin controls, or governance tokens blur the lines.

This is an area where Senate edits could have outsized impact.

Federal rules versus state rules

The bill also leans toward stronger federal oversight and narrower state-by-state requirements in certain areas.

For companies, that means fewer conflicting regimes and lower compliance friction. For critics, it raises concerns about losing fast-moving state enforcement in an industry that still sees its share of bad actors.

That tension is not going away, and it will likely surface again during markup.

Self custody, explicitly protected

One of the clearest statements in CLARITY is its protection of self custody.

The bill explicitly affirms the right to hold your own crypto and transact peer to peer for lawful purposes. In an environment where indirect restrictions have been a constant fear, putting this into statute is not symbolic. It is structural.

Developers get some breathing room

CLARITY also addresses a long-running concern among builders.

The bill says that non-controlling developers and infrastructure providers should not be treated as money transmitters simply for writing code or publishing software, as long as they do not control user funds or transactions.

For many developers, this removes a quiet but persistent legal cloud that has hung over the industry.

Why January 15 is such a big deal

The January 15 markup is where all of this either becomes real or starts to unravel.

This is where lawmakers decide how strict the maturity standards are, how wide the DeFi exclusions go, how much authority regulators actually get, and whether the bill delivers usable clarity or just new gray areas.

If CLARITY moves forward in a recognizable form, it becomes the most serious attempt yet to give crypto a durable U.S. market structure. If it does not, the industry likely stays where it is now, building first and hoping the rules catch up later.

How you can get involved?

This is also the moment where voices outside Washington still matter.

Lawmakers are actively weighing feedback. Staffers are reading messages. Offices are tracking where their constituents stand. Silence gets interpreted as indifference, and indifference makes it easier for complex bills to stall or be watered down.

If you believe crypto should have clear rules instead of enforcement-by-surprise, this is the time to say so.

That means contacting your representatives. Find out who your representative is and where they stand on crypto policy. Tell them that market structure clarity matters. Explain why builders, users, and businesses need predictable rules to stay in the U.S. Explain why self custody, open infrastructure, and lawful innovation should be protected, not pushed offshore.

It also means supporting organizations that are trying to organize that voice.

One such organization is Rare PAC, a political action committee advocating for regulatory clarity, innovation, and economic opportunity powered by decentralized technologies. Rare PAC works to ensure that the United States remains a global leader in those decentralized technologies and supports candidates who are committed to building A Crypto Forward America.

Bills like CLARITY do not pass or fail in a vacuum. They pass because people show up, speak up, and make it clear that getting this right matters.

January 15 is not the end of the process, but it is one of the moments that will shape everything that comes after.