US CLARITY Act Should Extend Protections to Self-Custody Wallets

The CLARITY Act is Washington’s attempt to replace case-by-case crypto enforcement with a federal market-structure regime, dividing responsibility between the Securities and Exchange Commission and Commodity Futures Trading Commission while setting rules for trading venues, intermediaries, custody and disclosure. For real-world asset tokenization, the bill does not turn tokenized stocks, bonds or property interests into unregulated products: treatment still follows the underlying rights and issuance structure. Clearer jurisdiction could nevertheless lower legal costs, deepen liquidity and make blockchain settlement easier for institutions.

Blockchain Association said in its latest rebuttal to The Wall Street Journal that CLARITY would promote competition and cut friction through tokenized stocks and bonds. The House passed H.R. 3633 on July 17, 2025, by 294-134, and the Senate Banking Committee advanced a revised bill on May 14, 2026, by 15-9. As of Aug. 6, no full Senate vote had been scheduled, with ethics rules governing officials’ crypto interests still a central obstacle; until enactment, tokenized securities remain subject to existing SEC requirements.

FTX’s Nov. 11, 2022 bankruptcy exposed gaps in U.S. oversight of digital assets, leaving customers uncertain about custody, asset segregation and their treatment in insolvency. The Digital Asset Market Clarity Act, or H.R. 3633, seeks to close those gaps by placing exchanges, brokers, dealers and custodians under clear federal rules covering registration, capital, disclosures, conflicts of interest, fraud prevention and customer-property protections, while defining the respective roles of the SEC and CFTC.

The House passed the bill 294-134 on July 17, 2025, and the Senate Banking Committee advanced its version 15-9 on May 14, 2026, with support from two Democrats. Coinbase Vice Chair Ryan VanGrack said on July 20 that Democratic negotiators had added stronger customer safeguards to give the legislation “more teeth.” As of that date, senators had neither released the final text nor scheduled a floor vote, while ethics limits involving government officials’ crypto interests remained unresolved after President Donald Trump disclosed $1.4 billion in related earnings in June.

The CLARITY Act aims to define the SEC’s and CFTC’s jurisdiction over digital assets and establish rules for trading platforms. The House passed the bill on July 17, 2025, but the Senate has yet to complete the legislative process. Finalizing the rules will determine whether banks can offer custody, tokenized deposits and onchain settlement under consistent standards.

The Senate Banking Committee advanced the bill on May 14, 2026. Before that, the SEC and CFTC had announced five token classifications on March 17, while the OCC confirmed that banks may provide compliant custody and onchain payment services. BNY estimates the digital cash market will reach $3.6 trillion by 2030, while JPMorgan’s Kinexys processes more than $5 billion a day.