David Sacks announced on December 18 that Senate Bench Chairman Tim Scott and Senate Agriculture Chairman John Boozman confirmed a January 2026 increase for the CLARITY Act.
“We look forward to completing the job in January!”
The problem: a markup in January doesn’t settle anything.
It is the opening move in a multi-year pipeline in which the most contentious questions have not yet been resolved and the statutory language remains in brackets.
The real work won’t begin until the bill passes a Senate vote, conference negotiations and a presidential signature.
The CLARITY Act was passed by the House of Representatives in July, along with the GENIUS stablecoin bill. It’s now in the Senate Banking Committee, where two separate concepts must be merged before there can be any talk of an increase.
These concepts still include parenthetical definitions of what counts as a “security” and how much DeFi infrastructure falls within the legal perimeter. They also leave open how intrusive the reporting requirements for trading platforms will become.
An increase in January means staff agreed to negotiate. It doesn’t mean making the tough decisions.
The split and what’s still moving
CLARITY’s core action divides crypto into three buckets.
“Digital commodities” are tokens linked to blockchain systems, such as payments, governance and network incentives, excluding securities and stablecoins.
“Investment contract assets” are digital commodities sold for capital raising. They begin at issuance as securities under the jurisdiction of the SEC, then lose security status in secondary trading and enter CFTC supervision.
“Permitted payment stablecoins” are national currency tokens issued by supervised entities that align with the GENIUS framework.
This gives the CFTC exclusive jurisdiction over the spot markets for digital commodities, beyond its current anti-fraud role. The SEC retains authority over issuers and offerings of investment contract assets.
Meanwhile, banking regulators are monitoring stablecoin issuers. The lines on the field are inked, but some markings are still penciled.
‘Security’ itself is in brackets in the Senate text. The Senate agriculture bill brackets entire DeFi sections and labels them “seeking further feedback,” because no one has agreed on what counts as “decentralized” enough to avoid securities status.
Plumbing that does not yet exist
CLARITY creates a whole cast of new registered entities. Digital commodity exchanges must adhere to core principles around listing standards, supervision, system safeguards, capital and reporting.
They can only list tokens whose issuers meet disclosure requirements, including source code.
Brokers and dealers of digital commodities require CFTC registration, capital standards, record-keeping, and retail customer protection.
Qualified digital asset custodians store customer digital assets for registered companies under the supervision of the banking regulator, the SEC or the CFTC.
DeFi carveouts exclude non-custodial activities such as running nodes, validating and building wallets from regulated intermediary status, although anti-fraud powers still apply.
Senate Agriculture leaves these sections in brackets because the trade-off is unresolved: if you make it too broad you risk a collapse of retail protections, but if you make it too narrow you risk the protocol being moved abroad.
Custody is where the bill bites. CLARITY forces exchanges and brokers to keep customer digital assets with qualified custodians and segregate customer property.
The draft directs regulators to modernize record keeping so that blockchain can serve as books and records. It prohibits regulators from forcing banks to treat customer cryptocurrencies as assets on the balance sheet or to hold additional capital beyond operational risk.
The legal text contains most of the real details about future custodial standards, disclosure templates, and unwritten rules for listing.
In addition, the bill gives regulators 360 days from enactment to write most rules, with some provisions in Senate drafts taking up to 18 months. That means years of hybrid status in which contemporary market research coexists with partially implemented US legislation.
Politics has not yet calmed down
The markup takes place against a contentious backdrop. Democrats are concerned about Trump’s control over independent agencies, especially if the Supreme Court allows presidents to fire SEC and CFTC commissioners at their discretion.
A legal analysis found that the investment contract carve-out could allow regulatory arbitrage, shifting oversight from the SEC after the fundraising and leaving a historically underfunded CFTC to oversee retail spot trading.
Before anything changes on a stock exchange screen, banking and agriculture merge their concepts. Both committees will gain margins, with Democrats set to push for stronger retail protections and limits on presidential control.
Leadership finds 60 votes on the Senate floor, no glide path in a divided chamber.
The House and Senate agree on their versions at a conference or through direct acceptance. The president signs it, and the appropriators fund a much larger footprint of the CFTC, which former officials say the agency cannot handle without significantly more money and staff.
Regulators write the rules for 360 days to 18 months. Companies will move to interim status while the rules are finalized.
The courts are weighing in, as the Supreme Court’s doctrine on agency power means that key rules around token classification and DeFi handling will face lawsuits.
David Sacks can look forward to finishing the job in January, but from the market’s perspective, January is the start of a multi-year pipeline before anything becomes binding. The hard part hasn’t started yet.