a16z: CLARITY Act Advances, The Cryptocurrency Industry Faces a Major Turning Point

Author: Miles Jennings Source: a16z Translation: Shan Ouba, Jinse Caijing

The U.S. Senate Banking Committee has just passed the crypto asset “Market Structure” Bill with a bipartisan vote — a historic milestone in advancing the crypto industry. Why is this significant? Because the “Digital Asset Market Clarity Act” (abbreviated as the CLARITY Act) will finally establish clear regulatory rules for blockchain networks and digital assets.

Over the past decade, due to the lack of clear regulation, U.S. regulatory approaches have distorted markets, suppressed innovation, and exposed consumers to significant risks. The CLARITY Act will end this chaos. Just as the 1933 Securities Act laid the foundation for investor protection and propelled a century of development and innovation in U.S. capital markets, the CLARITY Act will reshape the U.S. financial regulatory landscape, bringing a once-in-a-generation transformation and creating enormous opportunities.

Today, after the Senate “markup” approval, this foundational bill affecting the entire crypto industry — whether startup founders, ordinary users, traditional financial giants transitioning on-chain, or investors — is closer than ever to formal legislation. Next, two bills proposed by committees in the House and Senate will be merged into a comprehensive bill and submitted for a full Senate vote. If approved by the Senate, the bill will be sent to the House for review; if the House also passes it, it will be sent to the White House for signature and enactment.

Why the U.S. urgently needs the CLARITY Act now

Despite the expanding scale and increasing adoption of the crypto industry over the past decade, the U.S. has always lacked a comprehensive, unified regulatory framework. Regulators have had to piece together existing laws for oversight, resulting in complete failure: legal interpretations are chaotic and inconsistent, government overreach is common, and abuses of power frequently occur.

Regulatory uncertainty not only hampers innovation but also creates a breeding ground for illegal activities. In the negative news about crypto over the past decade, malicious actors easily exploit regulatory loopholes, launch fraudulent products, and harm consumers; meanwhile, compliant builders suffer from “law enforcement-style” unfair treatment.

This uncertainty has driven crypto technology development overseas. When the U.S. no longer encourages innovation domestically, entrepreneurs turn to more reasonable regulatory regions — the EU’s Markets in Crypto-Assets Regulation (MiCA), the UK’s crypto regulations, are clear examples of the U.S. falling behind. Fortunately, no country has yet established a perfect regulatory system, but tailored frameworks will eventually attract startups, concentrate industry value, and create jobs. Imagine: if Amazon, Apple, Facebook, Google, Microsoft, Netflix, Nvidia, and Sequoia all originated abroad, what would the U.S. economy look like?

Therefore, as long as the U.S. provides clear regulation for builders, domestic innovation will explode. The passage of the “Genius” Act in July 2025, which established a regulatory framework for stablecoins pegged to fiat currencies (mostly USD), is a prime example — it fostered a new paradigm: open monetary infrastructure. After implementation, stablecoins experienced unprecedented growth and adoption, benefiting the U.S. economy and solidifying the dollar’s long-term dominance.

When the legal framework encourages both innovation and consumer protection, the U.S. will lead globally, and the world will benefit.

Entrepreneurs and users who believe in the potential of crypto technology deserve a clear regulatory environment to realize their visions. They need a set of rules that recognize blockchain’s value: blockchain can drive major technological change, and also move beyond the speculative uses born from poor policies, opening up more possibilities outside existing financial applications (which are already covered by current U.S. regulations).

The CLARITY Act is precisely designed to build this clear regulatory framework.

The journey of the bill’s creation

The core content of the CLARITY Act is not entirely new; its principles and ideas stem from existing commodity and securities laws, as well as previous legislative drafts, including two “Market Structure” bills proposed by the House:

• 2024 “21st Century Financial Innovation and Technology Act” (FIT21, HR 4763)

• 2025 “Digital Asset Market Clarity Act” (House version of CLARITY, HR 3633)

Both aligned with the current Senate version, these bills aim to carve out a compliant path for blockchain networks:

1. Allow blockchain networks and digital assets to be launched safely and compliantly in the U.S.;

2. Clarify the regulatory boundaries between the SEC (U.S. Securities and Exchange Commission) and CFTC (U.S. Commodity Futures Trading Commission), defining whether digital assets are securities or commodities;

3. Regulate the operation of crypto exchanges;

4. Strengthen U.S. consumer protection through trading rules.

The FIT21 bill passed overwhelmingly with bipartisan support two years ago (279 votes in favor, 136 against, including 71 Democrats); the House version of the CLARITY bill passed in July 2025 with even higher support (294 in favor, 134 against, including 78 Democrats). These two bills send a clear signal: the Senate needs to accelerate legislation on crypto market structure.

The Senate version of the CLARITY bill continues the bipartisan consensus from the House and optimizes previous drafts in key areas (detailed below). The bill has made significant progress over the past year:

• June 2022: Senators Lumis and Gillibrand first proposed the “Responsible Financial Innovation Act,” the first bipartisan comprehensive crypto regulation proposal;

• July 2025: The Senate Banking Committee (which oversees the SEC) released a discussion draft, integrating and coordinating the regulatory ideas from Lumis-Gillibrand and the House CLARITY bill; simultaneously, a Request for Information (RFI) was issued to gather legislative suggestions balancing innovation, financial stability, and consumer protection;

• September 2025: A second version of the discussion draft was released based on feedback;

• January 2026: The latest version was published after months of bipartisan negotiations; in the same month, the Senate Agriculture Committee released and passed a draft of its own market structure bill within its jurisdiction;

• May 14, 2026: The Senate Banking Committee officially approved its portion of the CLARITY bill during a markup session.

Why the CLARITY bill is crucial: Network vs. Enterprise

For a century, enterprise models have driven American innovation: entrepreneurs raise funds to start businesses, and successful ventures generate profits for shareholders. U.S. law is highly adapted to this model — setting responsibilities, enhancing transparency, and balancing the rights and duties of founders and operators.

This set of rules works well for enterprises but not for networks.

The existing legal framework assumes centralized management, with control concentrated over the long term. But blockchain networks have no single controlling entity: they rely on shared rules rather than centralized ownership, coordinating users, capital, and resources.

When rules designed for enterprises are forcibly applied to networks, the networks are forced to distort into enterprise-like forms: centralized power, intermediaries rising, and value flowing out of the ecosystem participants’ hands.

In the digital economy, this phenomenon has led to highly concentrated giant platforms — payment systems, e-commerce platforms, social media apps, app stores — which capture the vast majority of value created by ecosystem participants: users pay $100 for a ride, but drivers get only a small cut; music artists with millions of streams see little income.

In enterprise-led networks, value flows to intermediaries. Traditional corporate laws protect intermediaries and investors but put users, creators, and workers at risk. In the internet era, this trade-off was perhaps unavoidable — open protocols lacked sustainable business models and couldn’t compete with the capital and resources of corporate networks.

Blockchain changes all that.

Blockchain and its protocols give rise to entirely new systems: decentralized networks. These networks are controlled without central authority, with transparent rules, owned and operated collectively by users. As network value grows through public use, earnings can be distributed to all participants (including edge users), rather than being monopolized by a central entity.

Blockchain restores the essence of networks, rather than turning them into enterprises.

Today, blockchain technology is at a critical turning point: personal computers, mobile internet, and the internet itself were all major technological revolutions; now artificial intelligence is also part of the picture.

But these technological shifts tend to lead to highly concentrated power: a few giants control the fate of countless consumers, creators, and developers. In the current era of digital economy and AI proliferation, the issue of control over digital systems becomes even more critical — if power continues to concentrate, giants will set network rules, restrict user access, and monopolize value: enterprises decide, and the benefits always go to the few.

Decentralized blockchain networks offer an alternative: infrastructure that cannot be arbitrarily altered, censored, or manipulated by a single entity. They can reconstruct existing platforms, creating digital public goods: reducing user lock-in, dispersing power, maintaining neutrality, eliminating single points of failure, and returning ownership to users.

The CLARITY Act is precisely designed to provide legal protection for this path.

As the bill enters full Senate review and details are updated, we will continue to analyze its practical impact on crypto builders. Once the legislative process is complete and it is officially enacted, U.S. law will finally align with the nature of blockchain networks: builders can operate transparently, raise funds domestically, and plan long-term without sacrificing core architecture due to regulatory ambiguity.

More projects operating within a compliant U.S. framework will enable regulators and law enforcement to better combat industry fraud and chaos. Practical regulation will foster genuine innovation: the GENIUS Act unleashed a wave of stablecoin innovation overnight; now, crypto technology is integrated into mainstream applications — from stablecoins to AI agents, more transformations are on the horizon.