What is the CLARITY Act of 2025?

The Digital Asset Market CLARITY Act is proposed US legislation designed to create a formal regulatory framework for cryptocurrencies and digital assets. The bill would clarify which regulators oversee different parts of the crypto market.

What did Senator Cynthia Lummis say about the CLARITY Act?

Cynthia Lummis said the legislation is intended to protect blockchain developers while giving law enforcement stronger tools to combat illicit activity in crypto markets.

How would the CLARITY Act divide crypto oversight?

The proposal would split regulatory authority between the SEC and the CFTC. Digital securities would remain under SEC oversight, while digital commodities such as Bitcoin would fall under the CFTC.

Why are developer protections important in the bill?

The bill would exempt qualifying blockchain developers from being classified as money transmitters. That matters because money transmitter rules can create expensive licensing and compliance burdens that many early-stage crypto projects struggle to meet.

What are money transmitter laws in crypto?

Money transmitter laws regulate businesses that move or transfer funds on behalf of users. Some developers argue applying those rules to software builders unfairly treats open-source developers like financial institutions.

How would the CLARITY Act affect crypto law enforcement?

The bill would introduce anti-money laundering and counter-financing of terrorism requirements for digital commodity brokers. These rules are designed to strengthen the government’s ability to investigate illicit crypto activity.

What does the bill say about a US CBDC?

The legislation would prohibit the Federal Reserve from issuing a central bank digital currency for monetary policy purposes. Supporters argue the restriction protects financial privacy and limits government surveillance risks.

Why are some crypto supporters against CBDCs?

Many crypto advocates believe government-issued digital currencies could increase financial surveillance and centralised control over payments. Senator Lummis has repeatedly framed decentralised assets like Bitcoin as alternatives focused on financial freedom.

Lummis backs CLARITY Act developer protections

Written by Mahathir BayenaPublished May. 13 2026Last Updated May. 13 2026

Cynthia Lummis promoted provisions in the Digital Asset Market Clarity Act of 2025 designed to protect blockchain developers while strengthening law enforcement oversight of digital asset markets.

The proposed legislation would formally divide regulatory authority between the SEC and the CFTC, assigning oversight of digital securities to the SEC and digital commodities to the CFTC.

One of the bill’s key provisions would exempt qualifying blockchain developers from being classified as money transmitters, reducing licensing requirements and compliance burdens for software builders.

Lummis said the legislation aims to support innovation while ensuring authorities retain tools to pursue illicit activity involving cryptocurrencies.

The bill would also impose targeted anti-money laundering and counter-financing of terrorism obligations on digital commodity brokers operating within crypto markets.

Another provision would prohibit the Federal Reserve from issuing a central bank digital currency for monetary policy purposes, reflecting privacy concerns raised by some lawmakers and crypto advocates.

The CLARITY Act additionally mandates federal studies examining decentralised finance risks and illicit use of digital assets, with reports expected within 180 to 360 days after enactment.

The legislation is scheduled for Senate markup in May 2026 and builds on earlier crypto regulatory efforts including the GENIUS Act focused on stablecoin oversight.