Washington’s CLARITY Act Aims to Resolve Crypto Regulatory Turf Wars

The Digital Asset Market Clarity Act of 2025 (CLARITY Act) is poised to redefine cryptocurrency oversight by consolidating regulatory authority at the federal level. The bill's passage through the House marks a pivotal shift in how digital assets will be governed, particularly for tokens that blur traditional classifications between commodities and securities.

Two critical provisions drive the legislation: a DeFi exemption shielding protocol operations from intermediary regulation, and a preemption clause designating 'digital commodities' as 'covered securities' to override conflicting state-level rules. This framework directly challenges the SEC-CFTC jurisdictional stalemate that has left crypto markets in limbo.

Market participants anticipate the Senate's January markup could either establish a lasting regulatory framework or collapse under the weight of unresolved edge cases. The outcome will significantly impact trading venues and token projects navigating the current compliance maze.