Original Title: What builders need to know about the CLARITY Act, what it is and why it matters
Original Author: miles jennings, a16z crypto
Translated by: Jia Huan, ChainCatcher

The Senate Banking Committee just voted in a bipartisan manner to advance cryptocurrency "market structure" legislation (i.e., legislation regarding market segmentation, regulatory responsibilities, and trading rules), marking a historic moment for the crypto industry.

Why is this significant? Because the "Digital Asset Market CLARITY Act" will ultimately establish clear rules for blockchain networks and digital assets.

For the past decade, the lack of clear regulations in the United States has distorted the market, stifled innovation, and exposed consumers to significant risks. CLARITY will put an end to this.

The 1933 "Securities Act" established investor protection mechanisms, underpinning a century of capital formation and innovation in the United States. The significance of CLARITY is similar—within the U.S. financial regulatory landscape, this is a rare and transformative event that will bring immense opportunities.

With today's just-passed Senate deliberation, this foundational legislation crucial to the entire crypto industry is closer to becoming law than ever before.

Whether startup founders, consumers, or large traditional financial institutions and investors transitioning to the blockchain, all will benefit from this.

Next, the bills from two congressional committees will be merged into one comprehensive bill for a full Senate vote. If passed, it will move to the House for approval and, if successful, to the White House for the President's signature.

Why the United States Needs CLARITY Now

Over the past decade, the crypto industry has continued to expand, yet the United States has never had a comprehensive regulatory framework. Regulatory agencies have had to rely on patching together existing regulations to oversee this industry, a practice that has been a complete failure.

This has not only led to legal interpretation confusion and inconsistent approaches but has also triggered severe government overreach and abuse of power.

This regulatory uncertainty has not only hindered innovation but has also provided a breeding ground for bad actors. Over the past decade, in the highly publicized negative news in the crypto space, malicious actors have been able to easily launch products exploiting regulatory loopholes, exploiting consumers.

Meanwhile, responsible builders are facing the challenge of suspicious "regulation through enforcement."

This level of uncertainty has already driven crypto development overseas. When the U.S. fails to provide room for innovation, entrepreneurs will seek other jurisdictions, including those with more sophisticated regulatory regimes.

The EU's Markets in Crypto-Assets Regulation (MiCA) and the UK's crypto regulations are two examples where the U.S. is falling behind.

Fortunately for U.S. innovation, no other jurisdiction has yet gotten regulation right. But tailor-made regulatory frameworks will eventually attract and concentrate entrepreneurial activity in those regions, along with the economic value and job opportunities they create.

Imagine if Amazon, Apple, Facebook, Google, Microsoft, Netflix, NVIDIA, and Salesforce had all been founded outside the U.S., what would the U.S. economy look like.

So, if the U.S. can provide regulatory clarity to builders, domestic innovation will greatly benefit. The GENIUS Act passed by the U.S. in July 2025 is a prime example.

GENIUS establishes a regulatory framework for stablecoins (digital assets pegged to and typically backed by fiat currency), giving rise to a new model: open monetary infrastructure.

Following the passage of this act, unprecedented growth and adoption ensued, benefiting the U.S. economy and the long-term dominance of the U.S. dollar.

When legal frameworks are designed to both promote innovation and protect consumers, the U.S. can lead the way, and the world will benefit.

Entrepreneurs and early adopters who believe in the promise of crypto should have a clear regulatory framework to realize their vision, regardless of external perceptions.

They also need a framework that recognizes the potential of blockchain networks to drive a significant and novel technological platform transformation. This transformation should go beyond speculative applications driven by poor policy and allow for building outside the initial financial use case (which is already covered by existing U.S. regulations).

CLARITY is specifically tailored to establish such a clear framework.

How We Got Here

The content of the CLARITY Act is not entirely new. Many of its concepts and principles originate from existing commodities and securities laws. This act has also evolved from several previous rounds of legislative iterations, including two House-originated "market structure" bills:

The 2024 21st Century Financial Innovation and Technology Act, also known as "FIT21" (HR 4763); the 2025 Digital Asset Market CLARITY Act (HR 3633).

Similar to the current Senate bills, both FIT21 and the House version of CLARITY aim to provide a pathway for blockchain networks to:

· Launch blockchain networks and digital assets securely and effectively in the United States;

· Clarify the regulatory jurisdiction of the SEC and CFTC in the crypto space, determining whether digital assets are securities or commodities;

· Ensure oversight of crypto trading platforms;

· Further protect American consumers through regulatory constraints on crypto transactions.

Two years ago, FIT21 passed with overwhelming bipartisan support (279 yeas to 136 nays, with 71 Democrats in support).

The House version of CLARITY, in July 2025, passed with even higher bipartisan support (294 yeas to 134 nays, with 78 Democrats in support).

Together, these bills sent a strong signal to the Senate: expedite crypto market structure legislation.

The Senate version of CLARITY has built upon the bipartisan momentum in the House and made several improvements over the previous bill at key points (see details below). This bill has been advancing in the Senate for several years, with the past year seeing the most rapid progress:

· June 2022: Senators Lummis and Gillibrand introduced the first-of-its-kind bipartisan legislation, the Lummis-Gillibrand Responsible Financial Innovation Act, aimed at establishing a comprehensive regulatory framework for the crypto industry.

· July 2025: The Senate Banking Committee (which oversees the SEC) released a discussion draft of the legislation within its jurisdiction, merging and harmonizing the approaches of the Lummis-Gillibrand Act and the House version of CLARITY.

· Engaged in a notice-and-comment process, gathering feedback and legislative solutions, aiming to strike a balance between innovation, financial stability, and consumer protection.

· September 2025, based on the feedback received, the Senate Banking Committee released the second discussion draft.

· January 2026, the Senate Banking Committee released another iteration, reflecting the outcome of months of bipartisan negotiations.

· Also in January 2026, the Senate Agriculture Committee released and advanced market structure legislation within its jurisdiction.

· Today (May 14, 2026), the Senate Banking Committee has just advanced the portion of the CLARITY Act it is responsible for in a "markup" session.

Why CLARITY Matters: Networks Aren't Corporations

For over a century, building a corporation has been a primary driver of American innovation. This path is well-trodden: entrepreneurs raise funds to start a business, which, when successful, generates profits that are returned to shareholders.

A sophisticated legal framework in the U.S. has honed this model, outlining responsibilities, emphasizing transparency, aligning incentives, and managing trust in founders and operators.

This framework works well for building corporations. However, it is not suitable for constructing networks.

The existing legal framework presumes control by a manager and requires this control to be enduring. Yet networks have no single controller. Networks rely on shared rules to coordinate people, capital, and resources, rather than central ownership.

Forcing a framework designed for corporations onto networks distorts the network into a corporate shape. Control is re-centralized, intermediaries reemerge, and value is extracted from those reliant on the system.

In the broader digital economy, this dynamic has given rise to a set of corporate-dominated networks—payment systems, e-commerce markets, social platforms, app stores—that capture a disproportionate share of the value created by participants.

A ride-hail passenger pays $100 for a trip, but the driver only receives a small portion. A musician's song, listened to by millions, earns them only a fraction of a cent in every dollar of revenue.

In places where corporate-dominated networks prevail, the majority of value flows to intermediaries. Traditional company law protects these intermediaries and their investors, but users, creators, and workers are left unprotected.

For most of the Internet era, this trade-off has been inevitable. Open protocols lacked a sustainable economic model that could compete with the capital and coordination behind corporate networks.

Blockchain changed that.

Blockchain and the software protocols deployed on top of it have fostered a new kind of system: the blockchain network. The design goal of this network is to enable decentralized control, operate according to transparent rules, and exist as shared infrastructure owned and operated by users.

The value of a blockchain network grows with public usage and can be distributed to participants—including those at the network's edge—rather than being captured solely by central nodes.

Blockchain enables "building networks that operate more like the internet and less like a company" to become a reality.

Blockchain technology is at a critical juncture. Past platform shifts—personal computing, mobile phones, the internet—have been among the most significant technological innovations in human history. The emergence of artificial intelligence is rapidly joining them.

However, all these platform shifts have ultimately led to highly concentrated power and control, with a few determining the fate of countless consumers, creators, and developers reliant on these technologies and services.

As more economic activities digitize, more aspects are shaped by artificial intelligence, and the question of "who controls the digital systems we rely on" becomes unprecedentedly critical.

If this control remains centralized, the ability to shape outcomes, restrict access, and capture value will also be concentrated: companies would dominate how networks operate and decide who benefits from them.

Decentralized blockchain networks offer another path: an infrastructure that no single entity can easily rewrite, censor, or redirect.

In other words, this kind of network can help decentralize existing platforms, replacing them with networks that have the characteristics of digital public goods—reducing lock-in effects, distributing control, embedding neutrality, reducing single points of failure, and returning ownership to users.

The design goal of the CLARITY Act is to truly enable this path.

As CLARITY moves to full Senate consideration and undergoes updates, we will share more about what it means for crypto builders.

But if CLARITY successfully navigates the remaining legislative steps, the U.S. legal framework would finally align with the essence of blockchain networks. Builders will be able to operate transparently, raise funds domestically, build for the long term without having to make structural compromises due to regulatory ambiguity.

As more projects operate within the regulatory perimeter in the United States rather than outside of it, regulatory agencies and law enforcement have better tools to combat the fraud and abuse that have long plagued this industry.

Once crypto gets workable regulation, we’ve already seen what happens: the GENIUS Act unleashed a wave of innovation overnight. Today, we can already see crypto in several mainstream applications, from stablecoins to AI agents, and more—exciting times lie ahead.

Original Article

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia