What exactly is the CLARITY Act, what is it not, what are the important time points, and how might it change the competitive rules for exchanges, stablecoins, and RWA?

Written by: Gracy Chen, CEO of Bitget

Last week, I just returned from business trips to New York and Miami, where I met with traditional financial institutions, regulatory personnel, lawyers, investment bankers, and had a lot of conversations with peers and competitors. One obvious feeling is that the U.S. crypto market cannot avoid the CLARITY Act, also known as the Clarity Act.

It is not merely a legal text belonging to Washington, nor is it just a policy news within the crypto industry; rather, it is a key attempt by the United States to establish federal rules for the digital asset spot market. On May 14, it will reach an important voting point at the Senate level. Taking this moment, I want to discuss: what exactly is the CLARITY Act, what is it not, what are the important time points, and how might it change the competitive rules for exchanges, stablecoins, and RWA.

1. What is the CLARITY Act, and what is it not?

The CLARITY Act (full name: Digital Asset Market Clarity Act, often associated with bill number H.R. 3633) is a landmark federal regulatory legislation proposed by the United States for the cryptocurrency and digital asset sector during the 2025-2026 period.

From a business impact perspective, the main line of the CLARITY Act is not simply "positive" or "negative," but rather aims to push the U.S. crypto spot market from an uncertain status driven by law enforcement towards a systematic state that encompasses SEC/CFTC division, trading platform registration, custody and segregation of customer assets, anti-fraud, anti-money laundering and conflict of interest governance.

The most common misconception in the market is to simplify the CLARITY Act as "determining whether a certain token is a security or a commodity." This question is certainly important, but it is not the whole picture. The Clarity Act focuses more on: even if certain assets are considered digital commodities, there is currently a lack of a complete federal-level regulatory framework for spot trading in the United States. In traditional finance, there are brokers, dealers, exchanges, and custodians; however, in the crypto market, these roles have long existed in a gray area between SEC, CFTC, and state regulations. The core of the CLARITY Act is to institutionalize this gray area.

2. What will happen on May 14? What will happen afterwards to truly legislate? Why is August this year a critical time point?

First, it is clear that May 14 is not the final day of legislation, but rather a markup/advancement voting point at the Senate Banking Committee level. Markup means that the committee reviews, modifies, votes on the bill text, and decides whether to advance it to the next step. During this process, the main fierce negotiation is about the details concerning DeFi exemptions and stablecoins.

In 2026, at least the following steps are still needed: committee approval, full Senate approval, House approval of the same or a compatible version, coordination of differences between the two houses, final text approval, and presidential signature. The largest uncertainty here is not just legal technicality, but political timing. I have discussed with several lawyers in the U.S., and everyone’s judgment points to the same conclusion: if there isn't significant progress before August, the likelihood of passing before the end of the year will drop sharply. The reason is very realistic: the public’s memory is short, and before the midterm elections, neither party is willing to easily give the other significant legislative victories. In the worst-case scenario, if the House shifts post-2026, and the White House or Congressional combination continues to be unfavorable after 2028, the legislative window for market structure may shift from "completed this year" to "repeatedly dragged out over the next 2 to 6 years."

3. If the CLARITY Act passes, what type of companies will be most affected, and what does it mean for Bitget?

If the CLARITY Act passes, the most affected will not be a single project, but rather the entire structure of the U.S. crypto market.

The first category that will be most affected is exchanges within the U.S. For platforms like Coinbase, the CLARITY Act is relatively beneficial. It may bring a clearer federal registration pathway, allowing platforms to avoid repeatedly explaining their business among SEC securities exchanges, CFTC derivatives, and state MTL. However, benefits do not mean looser regulations. On the contrary, exchanges will face requirements more akin to traditional financial markets: customer asset segregation, market manipulation monitoring, conflict of interest management, custody rules, disclosure, auditing, and AML/BSA/OFAC compliance. Simply put, compliant exchanges will gain a larger legitimate market but will also have to accept heavier financial-grade regulation.

The second category is overseas exchanges that wish to enter the U.S. market. For overseas exchanges including Bitget, the CLARITY Act will not automatically open the U.S. market, but will make "how to enter the U.S. compliantly" clearer. Currently, without the CLARITY Act, assets may be considered securities by the SEC, commodities or swaps by the CFTC, or just regulated by various state money transmission licenses. In this scenario, it is easy for federal and state regulatory bodies to expand interpretations and claim jurisdiction. For us, even wanting to conduct the simplest spot trading business in the U.S., obtaining 50 state MTL licenses one by one is really painful, and MTL does not cover everything. New York has BitLicense and MTL, California will also have a similar digital asset-specific regime, and Louisiana (home to Chicago) has similar arrangements. For businesses, the biggest headache is not obtaining a single license, but that each state has different requirements for customer assets, margins, custody, disclosures, and fully funded trading. The value of federal law is, precisely, to potentially preempt some state laws, reducing the cost of fragmentation across 50 states, avoiding "back-and-forth friction."

The third category significantly affected is stablecoin businesses, such as Circle, and this impact is twofold. On one hand, stablecoins will find it easier to enter compliant trading, settlement, and payment infrastructures, with the institutional dividend of compliant stablecoins like USDC being more significant. On the other hand, yield is a red line, the most sensitive point for U.S. banking and regulatory bodies. The GENIUS Act passed last year stipulated that "stablecoin issuers cannot pay interest," and the focus of current disputes is whether exchanges, wallets, or service providers can indirectly pay interest to users using rewards, rebates, or yield accounts without directly paying interest. The core of future stablecoin business will not be "who can offer higher yields" but rather who can prove that they are a payment and settlement infrastructure, not a shadow bank.

Additionally, the fourth, fifth, and sixth categories of affected companies are also considerable, and I'll briefly list them without expanding further:

The fourth category is RWA companies. The CLARITY Act will lead the market to more seriously distinguish: are you selling an on-chain certificate of a real underlying asset, or a contract that tracks prices? Do users have a claim to the underlying? "On-chain" is merely the simplest action; clarifying legal rights, custody, bankruptcy isolation, transfer agency, intermediary access, and trading venue arrangements is core.

The fifth category includes custodial, OTC, prime brokerage, and market makers. After the act is passed, these infrastructure companies may gain more space due to market formalization. However, they will also face heavier registration, capital, customer asset, and reporting obligations.

The sixth category is DeFi. The impact of the CLARITY Act on DeFi depends on how the final text defines "decentralization" and "intermediary." If a protocol is merely open-source code with no controlling party, no custody, and no intermediary for matchmaking, it may strive for lighter treatment. However, if a frontend actually controls user entry, collects fees, does routing, provides custody, and markets to U.S. users, regulation is likely not to overlook it simply because it is called DeFi. The future dividing line will not be "on-chain or off-chain," but rather "is someone operating a financial intermediary."

4. Conclusion

Therefore, my view on the CLARITY Act is: it is a crucial step in pushing the crypto industry from “competition among tech companies” to “competition among financial infrastructure companies.” In the past, the market rewarded speed, traffic, and product packaging; if the act is passed, the U.S. market will reward licenses, custody, customer asset protection, bankruptcy isolation, compliant stablecoin settlement, institutional access, and regulatory communication capabilities more.

The joys and sorrows of humanity are not shared, and the joys and sorrows of crypto companies are also not shared. Once the act passes, those who will "rejoice" are companies that are already prepared to accept financial-grade regulation and embed themselves in the U.S. capital market structure; those who will "sorrow" are those whose business models are "claiming to be DeFi but are actually CeFi," reusing customer assets, employing high leverage, or unable to explain the rights to underlying assets.

Every round of financial innovation ultimately raises the same question: is it merely an asset bubble, or can it become a new market infrastructure? The significance of the CLARITY Act lies here. It will not make crypto more romantic, and may even cause many stories to lose their imaginative space; but it may allow the truly valuable parts to be included in the rules of the U.S. financial system for the first time. For the industry, this is not the end, but a coming-of-age ceremony.