The groundbreaking Digital Asset Market Structure Clarity Act, which attempts to resolve the long-standing ambiguity around the proper classification of cryptocurrencies in the American financial system, was formally enacted by the U.S. House of Representatives.
By dividing regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), the law places digital assets under the purview of either securities or “digital commodities.”
The CFTC will be in charge of digital commodities under the new arrangement, while the SEC will supervise tokens that meet securities requirements.
In an effort to establish “sufficient decentralization,” the measure makes it clear that blockchains with open, transparent operations and no human control can be seen as commodities. Opponents contend that the measure still has gaps in it, especially in the area of decentralized finance (DeFi).
As one of three laws pertaining to cryptocurrency that were discussed during “Crypto Week,” the CLARITY Act creates a framework for classifying digital assets as either securities, which are governed by the SEC, or commodities, which are governed by the CFTC.
Days after Bitcoin reached a new all-time high of over $120,000, in part due to anticipation that Congress would finally take action to define the cryptocurrency’s role in the financial system, the measure was passed. The measure is now anticipated to move forward for Senate approval.
