U.S. House Releases Comprehensive Digital Asset Regulatory Framework

The U.S. House of Representatives has taken a significant step towards regulating digital assets by releasing a comprehensive regulatory framework. This framework, announced by key congressional leaders from the House Financial Services Committee and House Agriculture Committee, aims to provide much-needed clarity to the digital asset market. The initiative, driven by French Hill, G.T. Thompson, Bryan Steil, and Dusty Johnson, underscores the importance of establishing a clear regulatory environment to enhance institutional adoption and confidence in the U.S. digital asset market.

The regulatory framework is designed to affect major digital assets such as BTC, ETH, and stablecoins. By clarifying the roles of regulatory bodies and setting standards for compliance with KYC/AML, the framework aims to increase institutional inflows and foster growth in U.S.-based DeFi protocols. This move is expected to reduce legal risks for U.S. projects and spur increased development activity, particularly on platforms like GitHub. The framework draws comparisons to previous efforts like the FIT21 Act, which established a dual-agency supervisory structure involving the CFTC and SEC.

Former SEC Commissioner Elad Roisman emphasized the growing need for clear digital asset regulations, noting that current laws and regulations have not kept pace with technological advancements. This regulatory uncertainty has created significant ambiguity regarding the status and regulation of digital assets. The new framework aims to address these issues by providing a clear and consistent regulatory environment.

The U.S. House of Representatives is also set to consider the Digital Asset Market Clarity Act of 2025 (CLARITY), a pivotal piece of legislation aimed at providing a comprehensive regulatory framework for digital assets. This Act seeks to address years of regulatory ambiguity that has hindered innovation and left market participants navigating a fragmented landscape. By clearly delineating the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), CLARITY aims to unlock responsible innovation, protect consumers, and cement the U.S.'s position as a global leader in the digital asset economy.

The legislation comes at a time when there is growing bipartisan consensus that digital assets are central to the future of payments, capital markets, and decentralized finance. CLARITY builds on the Financial Innovation and Technology for the 21st Century Act (FIT21), which passed the House in 2024 with bipartisan support. FIT21 laid the groundwork for progress in the digital asset space by defining digital asset categories and assigning regulatory roles to the SEC and CFTC. CLARITY expands and codifies these principles, introducing statutory definitions and operational rules for issuers, intermediaries, and exchanges involved in the issuance, custody, and trading of certain digital assets.

The Act defines key terms related to blockchain technology, digital assets, and digital commodities, providing a consistent framework that helps resolve regulatory ambiguity. It introduces new definitions such as "digital asset," "blockchain protocol," and "mature blockchain system," as well as terms related to persons who issue, manage, or hold substantial stakes in a digital commodity. The Act also defines "end user distribution" and "permitted payment stablecoin," incorporating definitions from the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), which addresses the issuance and custody of payment stablecoins and passed the Senate with bipartisan support on June 17, 2025.

CLARITY provides a comprehensive framework for the regulation of digital commodities, including stablecoins and security tokens. It exempts certain primary transactions in digital commodities from traditional securities registration, provided they meet specific threshold requirements. The Act also clarifies that secondary distributions and end-user distributions, including various forms of staking, are not to be treated as the offer or sale of a security. Additionally, it outlines requirements for digital commodity issuers and other related parties seeking to have their blockchains certified as "mature," which includes less onerous filing requirements and looser restrictions on distributions.

The Act grants the SEC jurisdiction over certain digital commodities and stablecoins, providing an anti-fraud framework and requirements for CFTC-SEC cooperation over new, dual-registered entities. It also amends the Commodity Exchange Act to provide the CFTC with primary regulatory oversight authority over spot digital commodities, including the registration and regulation of digital commodity brokers, dealers, and exchanges. The Act introduces a new trading certification and approval framework for digital commodities, as well as the concept of a qualified digital asset custodian to hold digital assets on behalf of registered entities.

CLARITY also addresses other areas, such as self-custody of digital assets, decentralized finance activities, and permitted payment stablecoins. It ensures that U.S. individuals retain the right to maintain hardware and software wallets for their own lawful custody of digital assets and engage in direct, peer-to-peer transactions. The Act excludes decentralized finance activities from SEC regulation but notes that these activities are not exempt from the SEC's anti-fraud and anti-manipulation enforcement authority. It also incorporates the definition of a permitted payment stablecoin from the GENIUS Act and provides the SEC with authority to prevent fraud, manipulation, and insider trading in transactions involving permitted payment stablecoins.

The Act calls for various research studies related to cryptocurrency and blockchain technology, covering topics such as decentralized finance, NFTs, financial literacy, and the use of blockchain technology by the private sector. It also addresses the risks posed by central intermediaries located in foreign jurisdictions and the potential for foreign adversarial governments to collect data or intellectual property from the digital commodity market in the U.S.

In conclusion, the CLARITY Act represents a significant step toward establishing a regulatory framework for digital assets in the United States. By providing clear jurisdictional boundaries, tailored registration and compliance regimes, and new regulatory obligations, the Act seeks to foster responsible innovation while improving market integrity and investor protection. As Congress advances CLARITY alongside the GENIUS Act, stakeholders should prepare for new registration, compliance, and disclosure obligations, assess the current and anticipated maturity of their blockchain systems, and monitor forthcoming rulemakings and studies that will affect implementation.