On July 22, Senator Cynthia Lummis unveiled the full text of the CLARITY Act in public. This final draft will help the bill move forward to a possible full Senate vote.
In the official statement, Lummis said that the upcoming weeks are “likely the last real chance we will have for years to get this right.” She mentioned the urgency, as the legislative calendar has a small window before the August recess.
The 616-page bill is expected to create clear federal rules for digital assets by dividing oversight between the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
Major Provisions in the Updated Draft of CLARITY Act
The CLARITY Act is expected to provide the much-needed regulatory clarity for the digital asset sector. Till now, the crypto sector was operating under regulatory ambiguity, raising concerns about consumer protection. The bill will enhance consumer protections while taking control of illegal finance. There are some important provisions that this bill text mentions.
- Regulatory Clarity for Digital Assets – The bill would establish clear rules for deciding whether a digital asset is a security or a commodity. While the SEC will regulate cryptocurrencies that fall under security categories, the CFTC will handle commodities. The bill will allow projects to avoid the “regulation by enforcement” approach that has caused so much uncertainty. Mature blockchain networks and their tokens could be treated more clearly as commodities.
- Protections for Developers – One of the biggest highlights is strong protections for software developers. Those who only write and publish open-source code without controlling user funds would generally not be treated as money transmitters. This provision will provide very important protection to developers and save them from the prosecutions of coders, like Tornado Cash co-founder Roman Storm. It will also give them space to create new innovations without living in fear of legal scrutiny.
- Consumer Protection and Illicit Finance Safeguards – The bill comes with many anti-money laundering measures, sanctions tools, and rules requiring exchanges to freeze suspicious assets. It also includes disclosure requirements and frameworks covering stablecoins and DeFi activities.
Temporary Ethics Restrictions with a 2029 Sunset
A new ethics section has been added to the bill. It would prevent top government officials, including the President, Vice President, members of Congress, federal judges, and their spouses, from issuing or sponsoring digital assets “in exchange for consideration.” However, they could still invest in digital assets.
The rules include a sunset clause, meaning they expire at noon on January 20, 2029, when the current presidential term ends. Senator Lummis said this reflects “a standard President Trump chose to hold himself to, not one Congress imposed on him.” The provision came from White House negotiations, and it is expected to address conflict-of-interest concerns while building broader support.
CLARITY Act Aims to Become Turning Point for US Crypto Regulation
The bill’s release comes after months of negotiations. The House passed its version in July 2025 with strong bipartisan support (294-134), and the Senate Banking Committee advanced its version in May 2026 on a 15-9 vote with some Democratic backing.
Today’s updated text follows stakeholder briefings and tackles remaining issues, including ethics language Democrats pushed for and some Republicans initially opposed. Though the draft is Republican-led, Lummis thanked Democratic colleagues and expressed optimism about reaching a final deal soon.
However, some Democrats have raised questions about ethics enforcement and called for more refinements, while critics from traditional finance continue to voice concern about stablecoins and competition with banks.
If the U.S. passes this regulatory framework, the CLARITY Act would be the most important crypto legislation in US history. It could reduce regulatory ambiguity for developers, exchanges, and investors.
The bill needs 60 votes to pass, though it has a very narrow window before the August recess. In order to achieve this threshold, Lummis and other team members are reaching out to other members to raise support.
For instance, White House crypto advisor Patrick Witt revealed that he received a deferment from the Georgia Army National Guard service in order to advance the CLARITY Act.
Chairman Scott, who is leading the Banking Committee portion, stated, “As a kid raised by a single mom in South Carolina, I saw firsthand how access to opportunity can change the course of a family’s life. That’s what the Clarity Act is about: protecting everyday Americans and their hard-earned money, giving entrepreneurs a fair shot to build and create jobs here at home, and strengthening our national security by making it harder for criminals and foreign adversaries to exploit our financial system.”
Credit: Source link
