Clarity Act – Latest Draft Details

The Digital Asset Market Clarity Act (CLARITY Act) is moving through the Senate with significant updates. Here are the latest details on the proposed legislation.

Current Status

As of March 2026, the Senate Banking Committee is actively negotiating the bill. The most recent amendment was released in January 2026, with ongoing discussions focused on stablecoin rewards, DeFi regulation, and jurisdictional boundaries between the SEC and CFTC .

Key Provisions in the Latest Draft

1. SEC-CFTC Jurisdictional Framework

The bill establishes a clear "bright line" between the two agencies:

· SEC jurisdiction: Digital assets that function as securities, particularly "ancillary assets" dependent on entrepreneurial efforts
· CFTC jurisdiction: Digital commodities and network tokens intrinsically linked to distributed ledger systems

A written certification process allows network token originators to demonstrate their tokens are not ancillary assets. The SEC has 60 days to deny certification .

2. Stablecoin Rewards and Yield (Most Controversial Provision)

Latest language (as of March 24, 2026) :

· Prohibited: Paying interest or yield solely for holding stablecoin balances
· Permitted: Activity-based rewards tied to specific actions including:
· Account opening and transactions
· Wallet or protocol usage
· Loyalty or incentive programs
· Staking and providing liquidity
· Network governance participation

This represents a compromise between the crypto industry and traditional banks, who argued stablecoin rewards shouldn't compete with bank deposits .

3. DeFi Regulation

New Title III addresses decentralized finance:

· Developer protections: Non-controlling developers who publish or maintain code without controlling customer funds are not treated as money transmitters
· Intermediary requirements: Centralized intermediaries interacting with DeFi protocols must implement risk management, AML, and sanctions compliance
· Cybersecurity: NIST will establish voluntary cybersecurity standards for DeFi protocols

4. Illicit Finance Provisions

The bill includes what the Senate Banking Committee calls "the strongest illicit finance framework Congress has ever considered for digital assets" :

· Digital asset brokers, dealers, and exchanges must establish AML, CIP, and CFT programs
· Digital asset kiosk registration: Kiosk locations must register with Treasury with transaction limits, holding periods, and customer service requirements
· Transaction holds: Law enforcement may place temporary holds (up to 30 days, extendable to 150 days) on suspicious transactions
· Sanctions compliance: Treasury will clarify OFAC obligations for distributed ledger applications

5. Self-Custody and Developer Protections

The "Keep Your Coins Act" provision explicitly protects:

· The right to self-custody digital assets using self-hosted wallets
· Software developers creating or publishing blockchain code without controlling customer funds

6. Tokenization of Real-World Assets

The bill establishes rules for tokenized assets:

· Tokenized securities remain securities under federal law
· Prohibits representing tokenized assets as legally equivalent to underlying assets unless specific conditions are met
· SEC and CFTC will issue rules on custody, recordkeeping, and auditability

Comparison with House Version

The Senate amendment differs from the House-passed CLARITY Act in several ways:

· Introduces new terms like "ancillary assets" and "network tokens" requiring reconciliation
· Adds comprehensive DeFi regulation not present in the House version
· Includes specific stablecoin rewards language

Legislative Path Forward

Key hurdles remaining:

1. Reconciliation with Senate Agriculture Committee (CFTC oversight)
2. Reconciliation with House version
3. Democratic concerns about ethics provisions targeting government officials' crypto interests
4. Stablecoin rewards language clarity

Timeline: The bill was scheduled for markup January 15, 2026, but was postponed. Negotiations continue with White House involvement .

What This Means

For crypto businesses: Clearer jurisdictional boundaries between SEC and CFTC, but potential restrictions on stablecoin business models.

For users: Stronger protections including disclosure requirements, but possible limits on passive stablecoin yields.

For developers: Explicit protections for non-custodial software development and self-custody rights.

For investors: Enhanced disclosure requirements and anti-fraud protections remain in place .