House Financial Services Committee Statement on the CLARITY Act

What Is the Committee's Position?

The House Financial Services Committee issued this statement to explain the rationale and goals of the CLARITY Act. The Committee emphasizes that the legislation addresses a fundamental barrier to digital asset market development in the United States: the lack of clear regulatory jurisdiction.

According to the Committee, the CLARITY Act provides the certainty that market participants, investors, and regulators need to operate effectively in the digital asset space.

What Are the Committee's Key Points?

The Committee's central argument is that the current system leaves market participants guessing about which rules apply to them. Enforcement has been inconsistent and unpredictable, and the resulting uncertainty pushed development activity offshore. CLARITY's answer is prospective rules that apply to every participant, published in advance rather than established case by case.

The Committee is emphatic that the legislation came out of extensive cross-party negotiation, drawing input from industry, regulators, and consumer advocates. It frames the result as comprehensive market structure reform rather than a narrow fix, balancing innovation against investor protection.

CLARITY and the GENIUS Act are designed to divide the field between them. GENIUS governs stablecoins; CLARITY covers non-stablecoin digital assets. Taken together, the Committee argues, they form a coordinated federal approach in which an asset's category determines which statute and which regulator applies to it.

How Does the Committee View Market Structure?

The Committee's structural claim is that jurisdiction should follow function. The SEC oversees digital asset securities and the markets they trade on, the CFTC oversees digital commodities and derivatives, and a functional test determines which category an asset falls into. Coordination mechanisms between the two agencies are meant to close the gaps that an either/or split would otherwise leave open.

Trading platforms carry obligations that will look familiar to any regulated venue: registration for digital asset exchanges, segregation and protection of customer assets, market surveillance and manipulation prevention, and operational resilience requirements.

Intermediaries face a parallel set. Digital asset intermediaries register as broker-dealers, hold customer assets to defined custody standards, meet best execution requirements, manage conflicts of interest, and disclose to customers accordingly.

What Consumer Protections Does the Committee Highlight?

Disclosure carries most of the weight. Issuers disclose for token offerings, trading platforms disclose fees and risks, and retail-facing material must meet plain language requirements, so that a reader can find out what a digital asset actually risks before buying it.

Asset protection is the second pillar. Customer assets are segregated, commingling with firm assets is prohibited, holdings are subject to custody standards, and customer assets carry protections if the firm becomes insolvent.

Enforcement is the third. Both the SEC and CFTC receive clear enforcement authority, anti-fraud provisions apply to digital assets, market manipulation is prohibited, and the agencies coordinate with state regulators and the Department of Justice.

How Does the Act Support Innovation?

The Committee points to three mechanisms intended to give projects room to build before full registration applies:

• A three-year development safe harbor lets token projects build without carrying the registration burden immediately, on conditions meant to demonstrate good faith toward decentralization, with progress reporting along the way.
• A decentralization pathway sets criteria for an asset to transition from security to commodity, recognizing that projects mature over time, and requires a certification process rather than a self-declared claim.
• Regulatory sandboxes give the SEC and CFTC authority to run innovation programs where new products are tested under supervision, with a defined path to full compliance and coordination with state sandbox programs.

What Should Financial Institutions Consider?

The near-term work is classification. An institution needs to review its current digital asset activities, determine which of the two regulators is primary for each, assess what registration that implies, and evaluate whether its existing compliance infrastructure can carry the requirement.

Further out, clearer rules make product roadmaps possible in a way they were not before. Institutional digital asset services now have a compliance pathway, and the competitive landscape will shift as those requirements settle, which is the argument for moving early rather than waiting for the field to fill in.