House Agriculture Committee Advances CLARITY Act, Paving Way for Crypto Regulatory Framework

The U.S. House Agriculture Committee voted 47-6 on June 10 to advance the Digital Asset Market Clarity Act (CLARITY Act), a bipartisan legislative proposal aimed at establishing a comprehensive regulatory framework for digital assets in the United States. The bill, seen as a successor to last year’s Financial Innovation and Technology for the 21st Century Act (FIT21), now heads to the House Financial Services Committee for further deliberation. If approved, the two committees’ versions will be merged into a single bill for a full House vote, marking a significant step toward clarifying the regulatory landscape for the crypto industry.

Key Provisions and Objectives of the CLARITY Act

The CLARITY Act seeks to address longstanding uncertainties in the U.S. crypto market by delineating clear roles for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The legislation aims to classify digital assets as either securities or commodities, providing a structured path for crypto firms to operate under federal oversight. Key provisions include:

• Regulatory Clarity: The bill establishes guidelines for determining when a digital asset falls under SEC or CFTC jurisdiction, reducing ambiguity for crypto projects. It builds on FIT21’s framework, which previously passed the House but stalled in the Senate.

• Enhanced CFTC Authority: The legislation grants the CFTC expanded oversight over digital commodities, such as Bitcoin, and spot markets, addressing gaps in current regulations.

• Disclosure Requirements: Crypto project members must disclose token holdings exceeding 1% of total issuance, a measure intended to promote transparency and curb insider influence.

• Fundraising Pathways: The bill outlines a process for crypto firms to raise funds under SEC supervision while registering digital commodities with the CFTC, fostering innovation while ensuring investor protections.

The legislation is backed by key Republican figures, including House Agriculture Committee Chairman Glenn “G.T.” Thompson, House Financial Services Committee Chairman French Hill, and subcommittee chairs Bryan Steil and Dusty Johnson. Their joint efforts underscore a commitment to positioning the U.S. as a leader in digital asset innovation.

Bipartisan Support Amid Political Tensions

The CLARITY Act has garnered bipartisan support, with co-sponsors from both parties emphasizing the need for regulatory certainty to foster innovation. Representative Dusty Johnson, who leads the agriculture subcommittee on digital assets, stated, “our bill creates clear rules of the road, ensuring America will power the future of blockchain and digital assets.” However, the bill’s progress has not been without contention. Some Democrats, including House Financial Services Committee Ranking Member Maxine Waters, have raised concerns about potential conflicts of interest tied to President Donald Trump’s crypto ventures, such as World Liberty Financial’s USD1 stablecoin. In response, Waters introduced the first amendment to the CLARITY Act following the Agriculture Committee’s vote, dubbed the “Stop TRUMP In Crypto Act,” according to crypto reporter Eleanor Terrett.

Additionally, Terrett reported that ahead of the House Agriculture Committee’s markup of the CLARITY Act, industry insiders voiced concerns about a new provision in the revised text, labeled a “Gensler-era provision.” This amendment removes exemptions for previously issued tokens, granting the SEC broad authority to determine on a case-by-case basis whether each token qualifies as a security. Critics argue this reintroduces the uncertainty the bill was intended to resolve.

Next Steps and Challenges

The House Financial Services Committee is scheduled to review the CLARITY Act in a markup session, with a joint hearing titled “American Innovation and the Future of Digital Assets” expected to refine the legislation further. However, securing Democratic support remains a hurdle, particularly given concerns about Trump’s influence in the crypto space.

If the bill clears both committees, it will face a full House vote before advancing to the Senate, where stablecoin legislation recently gained traction. The crypto industry is closely watching these developments, as a federal framework could reshape compliance, innovation, and global crypto competitiveness.