CLARITY Act Stalled in Senate as Industry Pressure Mounts

The Digital Asset Market Clarity (CLARITY) Act has been stalled in the Senate since last year, despite industry pressure to pass it. The bill aims to provide a federal framework for digital assets and promote innovation in the US.

Industry executives are warning that removing Section 604 of the bill could lead to a First Amendment battle over open-source code. This provision shields noncustodial blockchain developers from being classified as federal money transmitters.

Coin Center and the Blockchain Association have labeled Section 604 nonnegotiable, arguing it's essential for safeguarding open-source innovation. Web3 founders and executives echoed this sentiment, warning that omitting this protection would drive developers out of the US market.