Key Takeaways
The CLARITY Act is a bill that would finally decide who polices crypto in the United States. The choice is between two agencies, the Securities and Exchange Commission and the Commodity Futures Trading Commission. It passed the House in July 2025 and has been waiting for a Senate vote ever since.
In July 2026 the bill picked up four national police organizations and five of the biggest names on Wall Street. CNN then reported that the White House had pressured law enforcement officials to produce that support.
Its odds of becoming law still fell, from 82% in February to 25% on July 31. The Senate has one week of work left before its summer break on August 7.
July was the best month the CLARITY Act has ever had, if you count endorsements. It was also the month its chances of becoming law got cut in half. Both things are true. The space between them is the story.
What is the CLARITY Act, in plain English?
Right now, nobody agrees on what a cryptocurrency legally is. That sounds like a small problem. It is not.
In US law, a security is something like a share of stock. It is watched by the Securities and Exchange Commission, the SEC. A commodity is something like corn, oil, or gold. It is watched by the Commodity Futures Trading Commission, the CFTC. The two agencies have different rules, different paperwork, and different penalties.
Crypto never got sorted into either bucket. So for years, the way America decided the question was by suing people and seeing what a judge said. The industry calls this regulation by enforcement. It means a company can follow every rule it knows about and still get sued, because the rules were never written down.
The Digital Asset Market Clarity Act, or H.R. 3633, is the bill meant to end that. It would sort digital assets into the two buckets, say plainly which agency handles which, and set out how crypto exchanges have to register, what they must tell customers, and how they must hold customer money.
Question | Today, without CLARITY | If CLARITY became law |
|---|---|---|
Is my token a security or a commodity? | Decided case by case, often in court | Written into law with a test anyone can read |
Who regulates the exchange I use? | Contested between the SEC and CFTC | Assigned by statute |
What has to be disclosed to me? | Varies by platform | Set registration and disclosure rules |
Who writes the rules? | Agencies and judges, after the fact | Congress, in advance |
Is the CLARITY Act only about bitcoin $BTC ( ▲ 0.07% ) ?
No. It covers digital assets broadly. That is why holders of tokens like $XRP ( ▲ 1.2% ) watch it so closely. Whether a given token is treated as a security or a commodity changes which agency oversees it and what its issuer has to file. The bill sets the test. It does not name winners.
Why the CLARITY Act matters even if you never buy crypto
This is the part that usually gets skipped. Here is who is actually affected.
If you are... | What this bill could change for you |
|---|---|
Someone who has never bought crypto | Banks say the stablecoin rules could pull deposits out of local banks. Those deposits fund mortgages, small business loans, and farm loans in your town. |
Someone who owns any crypto | Clear rules on custody and disclosure, meaning you would be told more about who is holding your money and how. |
A fraud victim or a prosecutor | The bill adds information sharing, stronger money laundering reporting, and the power to freeze suspicious transactions. Some prosecutor groups say it also opens gaps. |
A taxpayer | Prediction markets and crypto exchanges currently pay different taxes than licensed gambling and licensed brokerages. This decides part of that. |
A software developer | A provision decides whether writing open-source code makes you legally responsible for what strangers do with it. |
Why do banks care so much about a crypto bill?
Because of one narrow question. A stablecoin is a digital token designed to always be worth about one dollar. Some stablecoins pay the people holding them something that looks like interest. Banks pay interest on savings accounts too. If a stablecoin can pay a similar return without following bank rules, money may move out of banks. Banks lend that money out locally. That is their whole argument, and it is about deposits, not about crypto.
Who are the players in the CLARITY Act fight?
Two rough sides, but neither is united. Here is who moved in July and what they actually said.
Who supports the CLARITY Act?
Who | What they are | Date | Position |
|---|---|---|---|
NOBLE | National Organization of Black Law Enforcement Executives | July 1 | First major police group to endorse. Signed by president Reneé Hall, former Dallas police chief. |
FLEOA | 34,000+ federal officers across 65 agencies | July 10 | Support, but with four requested changes. Conditional, not a clean yes. |
Fraternal Order of Police | 382,000+ members | July 24 | Endorsed after opposing the bill in April. A reversal. |
Major Cities Chiefs Association | Police chiefs of the largest US cities | July 29 | Endorsed the newest draft. Signed by Milwaukee chief Jeffrey Norman. |
Goldman Sachs | Investment bank | July 23 | CEO David Solomon broke with the banking trade groups. |
BlackRock, Fidelity, Franklin Templeton, SoFi | Asset managers and a digital bank | Week of July 27 | Public statements backing passage. |
Grayscale, Strategy, Block | Crypto firms | July 29 to 31 | Letters and statements asking for a floor vote before recess. |
a16z crypto | Venture capital firm | July 22 and August 1 | An essay by Chris Dixon and a podcast with Marc Andreessen. |
Who opposes the CLARITY Act?
Who | Their camp | Main objection |
|---|---|---|
Sen. Elizabeth Warren and allies | Senate Democrats | The ethics rules do not stop the president from profiting from crypto, and they expire in January 2029. |
134 bank leaders in 44 states | Community banking | Stablecoin rewards would drain local deposits. Letter dated July 28. |
JPMorgan | Big banking | Same deposit fight. CEO Jamie Dimon went public in May. |
NASAA | State securities regulators | The bill overrides state fraud and investigation powers. |
NDAA, IACP, National Sheriffs, NAAUSA | Prosecutors and police | Developer exemptions would create money laundering gaps. Joint letter June 23, position unchanged. |
Transparency International US | Anti-corruption | Conflict of interest loopholes are still open. |
US Hispanic Chamber of Commerce | Small business | Community banks losing deposits would hurt Hispanic-owned businesses. Letter July 23. |
Did police groups really change their minds?
Some did, and the timing drew scrutiny. On July 30, CNN reported that the Trump administration pushed law enforcement officials to produce that support. White House crypto adviser Patrick Witt leaned on officials at the FBI and other agencies, according to the report. One law enforcement group official told CNN that "everybody in the law enforcement got hammered to support that legislation."
The letter that started the campaign is worth a second look too. On June 2 the Blockchain Association released a letter with 160 signatures, described as former national security and law enforcement officials. Association CEO Summer Mersinger said "the Clarity Act is a win for law enforcement." The signature list is worth reading closely. Some signers still hold their posts. Many are military veterans rather than police. And several work for crypto companies that stand to gain if the bill passes, including Coinbase's chief policy officer.
And the groups that objected have not budged. Four groups wrote to the Justice Department together on June 23. They were the National District Attorneys Association, the International Association of Chiefs of Police, the National Sheriffs' Association, and the National Association of Assistant United States Attorneys. Their warning was that the bill would create gaps in money laundering enforcement. They were still opposed as of CNN's July 30 report. A Justice Department spokesperson told CNN the letter "contains factual inaccuracies and mischaracterizes Administration policy."
Why the CLARITY Act's odds fell from 82% to 25%
Odds the CLARITY Act becomes law in 2026. Sources: Polymarket contract on 2026 enactment, and Galaxy Research estimates.
Endorsements are not votes. That is the whole explanation.
Galaxy Research cut its odds of the bill passing in 2026 from 50% to 30% on July 24. Head of research Alex Thorn wrote that "the calendar is no longer merely an obstacle. It is now the enemy." Polymarket, where people bet real money on outcomes, traded the same question at 25% on July 31. In February it was 82%.
How the Senate vote math works
A Senate bill usually needs 60 votes to get past a filibuster and reach a final vote. That step is called cloture. Republicans hold 53 seats. So on paper the bill needs 7 Democrats.
Number | What it means |
|---|---|
60 | Votes needed to break a filibuster |
53 | Republican seats |
7 | Democrats needed if every Republican votes yes |
~10 | Democrats likely needed in reality, because some Republicans object too |
7 | Democrats currently negotiating, not committed |
Those seven Democrats issued a joint statement on July 22. They are Catherine Cortez Masto, Angela Alsobrooks, Cory Booker, Ruben Gallego, John Hickenlooper, Mark Warner, and Raphael Warnock. They said the text "as it currently stands falls short," while promising to keep working. That is a negotiating position, not a no.
What exactly does Elizabeth Warren object to?
Four things, and they are specific. President Trump took in more than $1.4 billion from crypto ventures in 2025, close to two thirds of his income that year. Enforcement of the bill's ethics rules would run only through the Justice Department. State attorneys general are barred from bringing cases. And the ethics rules expire in January 2029, after he leaves office. Responding to the July 22 text, Warren wrote that "this bill should be dead on arrival." Senator Chris Van Hollen called it a "corrupt piece of legislation that will do a lot of harm."
When is the CLARITY Act expected to pass?
No vote is scheduled. The bill has sat on the Senate calendar as Calendar No. 423 since June 1, eligible for a vote that leadership has never called.
Date | What happened or happens |
|---|---|
July 17, 2025 | House passed it 294 to 134, with more than 70 Democrats voting yes |
May 14, 2026 | Senate Banking Committee advanced it 15 to 9 |
June 1, 2026 | Placed on the Senate calendar |
July 22, 2026 | Updated text released. Warren and seven Democrats respond the same day |
Week of July 27 | Thune gives floor time to nominations and a Russia sanctions bill instead |
August 7, 2026 | Last Senate session day before summer break |
September 14, 2026 | Senate returns |
Majority Leader John Thune said on July 23, "we'll see where the votes are." That leaves two realistic windows. The first week of August, or September.
What a16z argues, and why the 15% number matters
On August 1, a16z crypto released a podcast episode called "Marc Andreessen and Chris Dixon: Why America Needs CLARITY," hosted by Robert Hackett. It runs 58 minutes. The chapter list is a map of the whole fight. It covers whether the bill could prevent another FTX, the crypto exchange that collapsed in 2022, along with developer liability, the banking lobby's stablecoin fight, government ethics, and what happens if the bill fails.
Dixon made the written version on July 22, writing that "no law is perfect, and the CLARITY Act is no different." His main point is a proportion. Stablecoins are under 15% of the crypto market, and they already have federal rules under the GENIUS Act, the stablecoin law Congress passed last year. The other 85% has no federal rules at all. He compares it to writing rules for smartphones and ignoring cell networks.
The firm has skin in this beyond its portfolio. a16z crypto also spent the summer making the case for the DUNA, the decentralized nonprofit legal form Wyoming created in 2024, which the CLARITY Act names. WYDE is organized as a Wyoming DUNA, so that section is not abstract to us.
Where the CLARITY Act stands now
None of this is new. What is new is that the bill has the widest coalition of its life and the worst odds of its life at the same moment, and both were produced in the same four weeks.
The coalition is real. Parts of it were manufactured. The objections that matter most are not really about crypto at all. They are about who gets to enforce the ethics rules, and when those rules expire. And there is one week of floor time left.
WYDE has tracked this since the merged Senate draft was first reported in July and since the bill missed the White House's July 4 signing target. There is a warning in the recent record. The GENIUS Act passed, and then its one-year rulemaking deadline arrived with no final rules written. Passing a bill and getting rules are two different things. Worth watching.
More questions people ask about the CLARITY Act
What is the CLARITY Act in simple terms?
It is a bill that decides who regulates crypto in the US. It sorts digital assets into securities, watched by the SEC, or commodities, watched by the CFTC, and sets registration rules for exchanges. Today that question is answered by lawsuits instead of law.
What is the difference between the CLARITY Act and the GENIUS Act?
The GENIUS Act covers stablecoins, which are tokens pegged to the dollar. It is already law. The CLARITY Act covers everything else, which is roughly 85% of the crypto market by value.
Has the CLARITY Act passed the Senate?
No. It passed the House in July 2025 and cleared the Senate Banking Committee in May 2026, but it has never received a Senate floor vote. As of August 1, 2026, none is scheduled.
Is the CLARITY Act good for crypto?
Supporters say clear rules would bring activity back onshore and let regulated firms participate. Critics say the current text leaves money laundering gaps and conflict of interest loopholes. Both camps include people who want a market structure law, so the argument is over this version, not over the idea.
What does the CLARITY Act mean for XRP and other altcoins?
The bill sets the test for whether a digital asset is treated as a security or a commodity, which determines the agency in charge and the filings required. It does not single out individual tokens. This is not investment advice, and holders should read the text or follow the committee record rather than rely on summaries.
Why is Trump's crypto income part of a crypto regulation bill?
Because the bill includes ethics provisions covering senior officials. Democrats say those provisions are too weak, point to more than $1.4 billion in 2025 crypto income, and object that only the Justice Department could enforce them and that they expire in 2029. That dispute is the main thing standing between the bill and 60 votes.