The CLARITY Act is an American law aimed at providing a clear regulatory framework for regulating digital currencies in the United States. Here are the key points of the law and its impact:
Key points of the law
- *Clear definitions*: The law provides clear definitions for classifying digital assets, reducing ambiguity in regulation.
- *Role of the Commodity Futures Trading Commission (CFTC)*: The law designates the CFTC as the primary regulatory body for digital commodities, while the Securities and Exchange Commission (SEC) retains its authority to regulate assets classified as securities.
- *Specific compliance pathways*: The law provides specific compliance pathways to reduce inconsistent application of laws.
- *Protection of direct transactions*: The law protects direct transactions between individuals and self-custody of assets.
- *Exemptions for decentralized finance (DeFi)*: The law exempts certain DeFi activities from traditional registration.
Impact of the law
- *Enhancing trust*: The law can enhance trust in the cryptocurrency market by providing a clear regulatory framework.
- *Encouraging investment*: The law can encourage investment in the cryptocurrency market by providing investor protection and ensuring transparency.
- *Enhancing stability*: The law can contribute to enhancing the stability of the cryptocurrency market by establishing clear rules for cryptocurrency trading and ensuring transparency.
- *Regulation of trading platforms*: The law mandates the regulation of trading platforms like financial institutions under the Bank Secrecy Act.
- *Study and report on DeFi and NFT*: The law postpones direct regulation of DeFi and NFT, instead requiring the SEC and CFTC to conduct a thorough study and provide a report within a year.
