What is Clarity Act? Landmark crypto bill headed for senate markup
The Senate Banking Committee is set to start marking up the Digital Asset Market Clarity Act on Thursday, May 14.
This marks a pivotal moment for legislation that can establish the first comprehensive U.S. regulatory framework for cryptocurrencies.
The act distinguishes whether digital assets are securities or commodities, explaining whether the SEC or CFTC has jurisdiction, and establishes compliance rules for exchanges, brokers, and stablecoins.
According to this Act, the major aspects are:
- As per the bill, digital assets are categorised into three categories, including digital commodities, investment contract assets, and permitted payment stablecoins.
- Crypto exchanges, brokers, and dealers need to stay compliant with anti-money laundering and sanctions compliance, including the Bank Secrecy Act regulations.
- Bitcoin ATMs need to be registered with customer warnings, identification, and withdrawal limits.
- It protects software developers who publish code but do not control customer funds.
- The act bridges the gap left by previous regulations by setting regulations for stablecoin issuers and their ability to pay rewards.
Last year, the house passed the bill after facing delays due to criticism faced by banks and crypto companies.
More than 130 amendments have already been submitted in advance of the markup session on Thursday, including 44 amendments by Sen. Elizabeth Warren (D-Mass.), who claims the bill poses a threat to national security and fails to provide sufficient anti-money laundering protections.
It will take at least seven Democrats’ votes for the bill to pass the Senate. A party-line vote by the committee would mean very little chance of success, while bipartisan support would increase the bill’s chances.
