Senate Agriculture Committee advances CLARITY Act 12–11, clearing CFTC oversight for spot crypto
The Senate Agriculture Committee voted 12–11 on Jan. 29 to advance the CLARITY Act (Digital Commodity Intermediaries Act) along party lines, marking the first major crypto market-structure bill to pass a Senate committee. The Republican-backed measure would clarify Commodity Futures Trading Commission (CFTC) authority over spot trading in digital commodities, define “digital commodity,” and add consumer-protection and enforcement resources. All Republicans supported the bill; all Democrats opposed it, citing ethics concerns, DeFi treatment and potential conflicts of interest. A Democratic amendment adding ethics safeguards failed on a party-line vote. The legislation previously passed the House and now must be reconciled with the Securities and Exchange Commission (SEC)-focused provisions in the Senate Banking Committee before the full Senate can vote. Key unresolved issues include treatment of stablecoin yields, banks’ roles in crypto, and DeFi classification. Political spending and lobbying remain significant: crypto-aligned PAC Fairshake disclosed about $193 million in cash, with contributions from Coinbase, Ripple and Andreessen Horowitz. Traders should watch the Banking Committee reconciliation, potential amendments that change token classifications or exchange oversight, and any shifts in bipartisan support — outcomes that could materially alter regulatory risk pricing for major tokens and trading venues.
Neutral
The committee-level advancement of the CLARITY Act clarifies CFTC authority over spot digital commodities, reducing regulatory uncertainty for tokens that would be classified as digital commodities — a positive for market structure and exchange operations. However, the bill passed on a strict party-line vote and still faces reconciliation with SEC-focused provisions in the Senate Banking Committee; key topics (stablecoin yields, banks’ roles, DeFi classification) remain unresolved. This creates continued legislative uncertainty: traders may see muted immediate price reactions because the outcome is unresolved, but the news reduces some tail-risk by moving the process forward. Short-term impact: likely limited price movement as markets weigh partisan hurdles and potential changes during reconciliation. Long-term impact: if final legislation firmly places spot crypto under the CFTC with clear rules, that would be bullish for exchange liquidity and institutional participation; if the Banking Committee alters token classifications or imposes tighter bank restrictions, it could be bearish for certain tokens and venues. Overall, the update is market-moving in directional importance but not yet definitive, so the pragmatic market response is neutral until bipartisan agreement or final text emerges.