According to reports, the CLARITY Act, intended to provide regulatory clarity for the crypto industry, faces potential hurdles in defining rules for DeFi. Senate Banking Chair Tim Scott and Senate Agriculture Chair John Boozman confirmed a January 2026 markup for the Act. The legislation aims to categorize crypto assets into "digital commodities," "investment contract assets," and "permitted payment stablecoins," assigning regulatory oversight to the CFTC, SEC, and banking regulators, respectively. However, key definitions, particularly regarding what constitutes a "security" and the extent of DeFi regulation, remain unresolved. The Senate Agriculture draft leaves entire DeFi sections bracketed, indicating ongoing debate. Failure to reach consensus risks either inadequate retail protection or driving protocols offshore.

According to reports, the CLARITY Act, intended to provide regulatory clarity for the crypto industry, faces potential hurdles in defining rules for DeFi. Senate Banking Chair Tim Scott and Senate Agriculture Chair John Boozman confirmed a January 2026 markup for the Act. The legislation aims to categorize crypto assets into "digital commodities," "investment contract assets," and "permitted payment stablecoins," assigning regulatory oversight to the CFTC, SEC, and banking regulators, respectively. However, key definitions, particularly regarding what constitutes a "security" and the extent of DeFi regulation, remain unresolved. The Senate Agriculture draft leaves entire DeFi sections bracketed, indicating ongoing debate. Failure to reach consensus risks either inadequate retail protection or driving protocols offshore.