Overview of the CLARITY Act of 2025
In an important step towards regulating the burgeoning digital asset sector, U.S. Representative French Hill has put forward a significant piece of legislation titled the “Digital Asset Market Clarity Act of 2025,” commonly referred to as the “CLARITY Act of 2025.” The introduction of this bill has garnered bipartisan support, featuring collaboration from three Democratic co-sponsors alongside Hill, a Republican.
Objectives of the Legislation
The CLARITY Act aims to clarify the jurisdictional roles of two key regulatory bodies: the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Over the years, there has been widespread uncertainty regarding which agency should oversee various types of digital assets, and this legislation seeks to address those ambiguities.
“I am proud to introduce the bipartisan CLARITY Act with my colleagues,” Hill stated on May 29. He emphasized that this legislation is crucial for establishing clear guidelines within the digital asset framework to enhance consumer protection, promote American innovation, and build upon efforts made during the 118th Congress.
Proposed Regulations and Requirements
Under this proposed law, those developing digital asset projects will be mandated to furnish precise and pertinent disclosures regarding their operations, ownership, and frameworks. Additionally, the bill imposes new obligations on customer-oriented companies like brokers and dealers, requiring them to:
- Provide clear customer disclosures
- Ensure that client assets are kept separate from company funds
- Establish measures to prevent conflicts of interest through stringent registration and operational norms
Conclusion
As this initiative progresses, further updates will be provided to keep stakeholders informed of developments in the legislative process.
