The most consequential piece of cryptocurrency legislation in American history is four steps away from becoming law — and the clock is ticking. The Digital Asset Market Clarity Act (H.R. 3633), known as the CLARITY Act, has cleared the Senate Banking Committee and is now on the Senate calendar with a hard deadline of the August 2026 congressional recess.
Here is what the bill does, what still needs to happen, and how it could reshape the crypto landscape for investors, exchanges, and developers.
What the CLARITY Act Actually DoesThe CLARITY Act is a 309-page bill designed to end the decade-long regulatory tug-of-war between the SEC and CFTC over digital assets. Its core innovation is a clean jurisdictional split: the SEC regulates tokens that function as investment contracts, while the CFTC oversees digital commodities — tokens on sufficiently decentralized networks like Bitcoin and potentially Ethereum.
The bill introduces a mature blockchain test that lets tokens shift from SEC to CFTC oversight once their network meets specific decentralization criteria: no single entity controls more than 20% of token supply or voting power, the code is open-source, and the token has functional utility beyond investment.
Where the Bill Stands Right NowThe bill has completed five of nine required steps. It passed the House in July 2025 with a bipartisan 294-134 vote, cleared the Senate Banking Committee vote 15-9 on May 14, 2026, and was placed on the Senate Legislative Calendar on June 1 — making it eligible for full Senate debate.
The remaining four steps are the hardest: full Senate floor debate with a 60-vote threshold, House-Senate reconciliation, and presidential signature. The White House is targeting a July 4 signing ceremony.
The 0 Million Bet on PassageGalaxy Digital has placed a 0 million institutional prediction market trade on the bill passing in 2026, with Polymarket pricing the odds at 59%. Senator Cynthia Lummis has warned that failure to pass before the August recess would push the next viable window to 2030.
Market Impact If It PassesWhen the committee vote succeeded, Bitcoin rose to 1,449, with Ethereum climbing to ,288. Citi projects a 43,000 Bitcoin target contingent on passage, while Standard Chartered projects 50,000, citing regulatory clarity as the primary catalyst for institutional inflows.
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