The United States is edging closer to a complete crypto regulatory system after Senator Thom Tillis publicly demanded a May markup hearing for the CLARITY Act, with Senator Cynthia Lummis suggesting the landmark bill could clear Congress and become law as early as June 2026.
The push accelerates a legislative timeline that has moved faster in 2026 than at any point in the history of US digital asset policy, following the enactment of the GENIUS Act earlier this year and a joint SEC/CFTC interpretive release published in March that began pulling digital assets out of regulatory grey zones for the first time.
What the CLARITY Act Covers
The CLARITY Act is designed to do what the GENIUS Act did for stablecoins – but for the broader digital asset system. Where the GENIUS Act established a federal licensing regime for stablecoin issuers and clarified reserve requirements, the CLARITY Act addresses the classification of digital commodities versus securities, DeFi protocol obligations, and the jurisdictional boundaries between the SEC and CFTC.
The bill’s key provisions include a functional test for determining whether a digital asset is a commodity or a security – replacing the longstanding application of the Howey Test that has driven years of legal uncertainty – and carve-outs for sufficiently decentralised networks that would exempt them from securities registration requirements.
Fintech.global noted in a recent analysis that the combination of the enacted GENIUS Act and the pending CLARITY Act, alongside the March SEC/CFTC guidance, represents “the most coherent regulatory architecture for digital assets that the US has produced,” pulling firms out of ambiguity and into clearly defined compliance categories.
Tillis and Lummis Align on Timeline
Speaking at a policy forum on April 30, Senator Tillis said he had “run out of patience” with delays in scheduling a markup hearing for the CLARITY Act in the Senate Banking Committee. A markup hearing is the formal step where a bill is debated, amended, and voted on before advancing to the full Senate floor.
Tillis indicated that the primary remaining obstacle – concerns from the banking sector about stablecoin yield competition – has been substantially resolved through amendments to the GENIUS Act’s prohibition on stablecoin issuers paying yields to holders.
Senator Lummis, who co-authored the CLARITY Act, went further at the Bitcoin 2026 conference in Las Vegas, stating that a June enactment was a realistic target if the markup proceeded in May. “The political will is there,” Lummis said. “The industry has done its job. Congress needs to do its job.”
The White House Budget Complication
A potential complication has emerged from an unexpected direction. The White House’s FY2026 budget proposal includes a provision applying wash sale rules to crypto, a loophole that equity traders have never had access to. The Treasury estimates the change would generate $5.4 billion in revenue over ten years by preventing crypto investors from selling at a loss, claiming the tax benefit, and immediately repurchasing the same asset.
The budget also includes a 30% mining tax on electricity costs targeting proof-of-work miners – a proposal that has generated fierce opposition from the Bitcoin mining industry.
These provisions are separate from the CLARITY Act and would require independent legislative vehicles to become law. But, their presence in the White House budget signals that the current administration sees crypto taxation as a revenue source worth pursuing, which could complicate floor dynamics if the CLARITY Act moves to a full Senate vote.
SEC’s 85-Item Rulemaking
Simultaneously, the SEC is processing a substantial 85-item rule change affecting Bitcoin and XRP ETF listings, according to a summary published by Yahoo Finance. The scope of that rulemaking reflects how much the agency’s position has shifted since the landmark Bitcoin spot ETF approvals of early 2024.
The March SEC/CFTC interpretive release also provided the first explicit federal guidance on airdrops, staking rewards, and crypto wrapping – clearing ambiguity that had kept several institutional products in legal limbo since 2022.
Industry Reaction
The prospect of a June enactment has generated cautious optimism across the digital asset industry. Exchanges, custodians, and DeFi protocol teams have spent the past 18 months preparing compliance frameworks in anticipation of exactly this legislative outcome.
Coinbase, which has been among the most vocal advocates for clear crypto regulation, responded to the Tillis announcement by stating that the CLARITY Act would “provide the foundation US crypto companies need to compete globally.” Several European exchange operators have also monitored the US process closely, noting that MiCA’s enactment in Europe has already driven some institutional flows toward EU-regulated venues.
The coming weeks will determine whether the political momentum translates into a scheduled hearing. If Tillis secures a May markup date, the CLARITY Act will have a credible path to becoming the most significant piece of US financial legislation to affect the crypto industry since the Bank Secrecy Act.
Frequently Asked Questions
What is the CLARITY Act? The CLARITY Act is proposed US legislation that would establish a complete regulatory system for digital assets, clarifying whether tokens are commodities or securities, defining DeFi obligations, and drawing a clear boundary between SEC and CFTC jurisdiction over crypto markets.
When could the CLARITY Act become law? Senator Cynthia Lummis, a co-author of the bill, said at the Bitcoin 2026 conference that June 2026 is a realistic target for enactment, provided a Senate Banking Committee markup hearing takes place in May as Senator Tillis is demanding.
How does the CLARITY Act differ from the GENIUS Act? The GENIUS Act, which has already been enacted, focuses specifically on stablecoins – establishing a licensing regime and reserve requirements for stablecoin issuers. The CLARITY Act covers the broader digital asset system, including the commodity versus security classification of tokens and DeFi protocol obligations.
