Clarity Act Aims to Provide Regulatory Framework for Digital Assets

The Clarity Act has the potential to unlock the floodgates for institutional capital in the cryptocurrency market. By establishing a clear regulatory framework, it would provide much-needed clarity for investors and financial institutions.

Under the bill, every digital asset will fall into one of three categories: digital commodities, investment contract assets, or permitted payment stablecoins. The Commodity Futures Trading Commission (CFTC) would oversee digital commodities, while the SEC would retain authority over investment contract assets.

The bill also addresses the issue of passive yield generation on stablecoin balances. While passive yield on stablecoin balances is banned under the bill's current formulation, activity-based rewards for stablecoin capital tied to transactions, payments, staking, or liquidity provision are explicitly permitted.