What it is
The CLARITY Act (Cryptocurrency Clarity Act of 2021) is a proposed piece of US legislation that seeks to establish a clear legal framework for digital assets by amending existing securities laws. It aims to address the challenge of classifying digital assets by providing criteria under which a token, initially offered as a security, could transition to a non-security status if it becomes sufficiently decentralized.
This bill attempts to resolve the "security vs. commodity" debate by offering a path for certain digital assets to evolve out of securities oversight as they mature and decentralize. While proposed in Congress, the CLARITY Act has not been passed into law. It represents one of several legislative efforts to bring regulatory certainty to the US crypto market.
Why it matters
The CLARITY Act could significantly impact how digital assets are regulated, potentially freeing some from strict securities oversight as they mature.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice