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America's Clarity Act: Banning CBDCs, and Opening Up to Crypto

21 May 2026 4 min read

The Clarity Act just cleared the US Senate Banking Committee — and for the first time, America has a real framework for how crypto should be regulated. Not by banning it. Not by suing every exchange into submission. By finally acknowledging what the industry has been saying for a decade: most crypto assets aren't securities, and the rules should reflect that. The bill also bans the Federal Reserve from issuing a digital dollar to individuals — blocking the kind of government-run financial surveillance that China already uses.

What Is the Clarity Act?

In plain terms: the Clarity Act is a law that tells the US government how to handle crypto. Right now, two agencies — the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission) — have been fighting over who controls crypto, with no clear answer. The SEC has spent years treating almost every token as an illegal security. The CFTC says most of them are commodities. Courts have given mixed rulings. The result has been years of confusion, lawsuits, and companies leaving America to build elsewhere.

The Clarity Act ends that. It sorts every digital asset into one of three categories, assigns a regulator to each, and draws a line that both agencies have to respect. For the first time, a crypto project can look at the law and know where it stands.

Key takeaways:

Bitcoin, Ethereum, Solana, and XRP are officially digital commodities — not securities. The Clarity Act assigns oversight of digital commodity spot markets to the CFTC, ending years of SEC enforcement actions that treated these assets as unregistered securities. This is the biggest jurisdictional clarity the industry has ever received.
The bill passed the Senate Banking Committee 15-9 — with bipartisan support. Democratic Senators Ruben Gallego (Arizona) and Angela Alsobrooks (Maryland) crossed party lines to vote yes. The House passed it last July 294-134. This isn't a fringe proposal — it has real momentum.
DeFi protocols, validators, and developers are explicitly exempt from SEC and CFTC registration. The bill carves out decentralised finance from traditional regulatory frameworks. If no single entity controls more than 20% of a token's supply or governance, the protocol qualifies for reduced oversight. Self-custody is preserved.
The bill bans the Federal Reserve from issuing a digital dollar to individuals. No government-run digital currency that tracks what you buy or who you send money to. China already has one. America just said: not here. Any future digital dollar must preserve the same privacy protections as physical cash — and requires explicit Congressional approval.
A full Senate floor vote is expected within 30 days, with the White House targeting a July signature. Galaxy Research puts the odds of the bill becoming law at 75%. Prediction markets have it at 72%. The remaining hurdles: a merged Senate bill, an ethics provision, and 60 floor votes.

How It Works

The Clarity Act creates three categories for digital assets:

Digital commodities — assets on mature, decentralised blockchains — go to the CFTC. To qualify as "mature," the blockchain must be functional, open-source, governed by transparent rules, and not controlled by any single entity holding 20% or more of the tokens. Bitcoin, Ethereum, Solana, and XRP all qualify.

Investment contract assets — tokens that function like traditional securities — stay with the SEC. If a token is sold as an investment in a centralised project with a team making promises about returns, the SEC keeps jurisdiction.

Permitted payment stablecoins — digital assets pegged to a national currency and backed by reserves — get joint SEC/CFTC oversight.

The bill also creates an exemption for smaller projects: issuers on mature blockchains can raise up to $75 million over 12 months without full securities registration.

Why This Matters

For years, the American approach to crypto regulation was regulation by enforcement. The SEC would sue first and define the rules later. That drove talent, capital, and companies offshore. The Clarity Act replaces that with a framework that lets businesses operate legally without waiting to see if they'll be the next enforcement target.

The banks don't love it. The American Bankers Association opposed the bill, arguing that stablecoin provisions could let crypto firms offer interest-like payments and pull deposits away from traditional banks. Law enforcement groups raised concerns about reduced tracking ability. State securities regulators worry about weakened fraud enforcement authority.

Those concerns are worth noting — but they're also the same concerns that have been raised about every financial innovation since the internet made it possible to move money without a branch manager's permission.

No Digital Dollar — By Law

The Clarity Act also includes a provision that doesn't get enough attention: it explicitly prohibits the Federal Reserve from issuing a central bank digital currency to individuals — directly or through a third party.

This matters more than it sounds. A government-run digital dollar would give Washington the ability to monitor every transaction you make — where you spend, what you buy, who you send money to. Without the privacy protections of physical cash, a CBDC becomes a surveillance tool. China already runs one. The digital yuan lets the state track and restrict spending in real time.

The Clarity Act says: not here. The Fed cannot create a retail CBDC without explicit Congressional approval. It cannot use a digital currency to implement monetary policy or manipulate economic behaviour. And any future digital dollar must preserve the same privacy protections as cash.

The bill passed the House alongside a companion law — the Anti-CBDC Surveillance State Act — backed by 135 co-sponsors. Together, they draw a hard line: the United States will not build a financial surveillance system disguised as a digital currency.

For anyone who believes money should be a tool for freedom, not control, this is the provision that matters most.

Meanwhile, in South Africa

While America is drawing clear lines and stepping back, South Africa is moving in the opposite direction. The Minister of Finance recently announced plans to bring crypto assets under the exchange control regime — the same system designed in 1961 to prevent capital flight. The proposed rules would go further than the EU's MiCA framework and further than the Clarity Act, potentially restricting self-custody in ways that neither Europe nor America are pursuing.

Two of the world's largest economies are choosing clarity and openness. South Africa should be watching carefully.

Cape Crypto (Pty) Ltd is a licensed financial services provider (FSP 53746). This article is for informational purposes only and does not constitute financial advice.

Sources:

Leon Kowalski