HR 3633: Digital Asset Market Clarity Act

HR 3633 in plain English: The CLARITY Act of 2025 establishes a federal regulatory framework for digital assets (cryptocurrencies and similar assets). The Commodity Futures Trading Commission would oversee most digital commodity transactions, while the SEC would retain jurisdiction over certain trading systems and exchanges. The bill sets rules for exchanges, brokers, and dealers, including anti-money laundering requirements and customer asset protections.

Stated purpose

To create a clear regulatory framework for digital assets (cryptocurrencies and similar products) by dividing oversight between the Commodity Futures Trading Commission and the Securities and Exchange Commission, and to prohibit the Federal Reserve from offering central bank digital currency directly to individuals or using it for monetary policy.

Key points

• Gives the CFTC primary authority to regulate digital commodity exchanges, brokers, and dealers
• Exempts qualifying digital commodities from SEC registration if annual sales do not exceed $50,000,000
• Requires digital commodity blockchains to be mature or decentralized to qualify for exchange trading
• Applies Bank Secrecy Act anti-money laundering rules to digital commodity exchanges, brokers, and dealers
• Provides a provisional registration period for industry participants while the new rules are implemented

Arguments supporters make

• The current lack of clear rules creates legal uncertainty that drives crypto businesses overseas; this bill gives companies a defined path to operate legally in the U.S.
• Dividing oversight between the CFTC and SEC based on how decentralized a blockchain is provides a logical, technology-based framework rather than forcing all digital assets into rules designed for traditional stocks.
• Blocking the Federal Reserve from issuing a retail digital currency protects Americans' financial privacy and prevents the government from gaining direct surveillance over individuals' transactions.

Arguments opponents make

• Critics argue the bill's definition of a 'mature' or 'decentralized' blockchain could let many assets escape SEC oversight, weakening investor protections that exist for good reason.
• Splitting jurisdiction between two agencies over similar activities may create confusion, regulatory gaps, or opportunities for firms to choose the lighter-touch regulator.
• Opponents contend that prohibiting central bank digital currency research or future tools limits policymakers' ability to modernize the payment system and respond to future financial challenges.

Tradeoffs

Providing regulatory clarity and lighter registration requirements for digital assets may encourage innovation and domestic business growth, but could reduce the level of investor protection and government oversight that currently applies to traditional financial products. Restricting a potential central bank digital currency protects privacy concerns for some, but removes a tool that policymakers might otherwise use to improve payment systems or conduct monetary policy.

Current status in Congress: Passed House.

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