On Jan 18, 2026, Coinbase withdrew support for the CLARITY Act, jolting the bill’s path through Congress. The company’s message was blunt: “We’d rather have no bill than a bad bill.”

Yet beneath the headlines, the proposal draws a crisp line by sorting digital assets into two categories: “ancillary assets” (presumed securities subject to disclosure) and “network tokens” (treated as commodities).

That split matters because it gives markets a workable way to separate securities-like features from commodity-like tokens, aiming to reduce years of uncertainty over which agency is in charge and what rules actually apply.

Done right, this framework could deliver clearer obligations for issuers and intermediaries, a more predictable compliance path for builders, and stronger guardrails for consumers. In other words, clarity without shutting the door on innovation. This guide distills what the bill actually proposes—and why it is rallying some stakeholders while alienating others.

Up next, we break down the key definitions, how oversight would be divided, and what compliance could look like if the CLARITY Act advances.

Defining Digital Commodities and Mature Blockchain Systems

The CLARITY Act flips a long-standing default by signaling there is no presumption that a digital asset is a security. That shift reframes the starting point for classifying tokens and sets up a cleaner path for rulemaking.

At the core is the term “digital commodity,” which the bill treats as an asset that is intrinsically linked to a blockchain system, emphasizing its on-chain functionality rather than the manner of sale. Just as importantly, the Act separates the asset from the fundraising scheme: even when a token is sold through an investment contract, digital commodities are not themselves investment contracts, narrowing the “security forever” interpretation that has haunted builders.

To address when a network is decentralized enough for its assets to behave like commodities, the bill introduces a “mature blockchain” concept—essentially a threshold that focuses on objective signs of dispersion and control. In practice, that “maturity” standard helps distinguish periods when token distributions may look like securities transactions from phases when a network operates independently and tokens function more like commodities, a distinction grounded in how the system actually runs rather than who marketed it. For practitioners, that provides a timeline-aware lens to evaluate disclosures early on and lighter-touch treatment once decentralization is achieved, consistent with the Act’s no presumption stance.

The definitional architecture aims to reduce gray areas by tying labels to how tokens work on-chain and whether any party retains meaningful control, rather than freezing them in the posture of their initial sale.

Bottom line: aligning “digital commodity” to blockchain-linked functionality and a “mature blockchain” threshold gives market participants a clearer, tech-native vocabulary for compliance decisions.

Key Takeaways:

  • “Digital commodity” centers on on-chain functionality: tokens intrinsically linked to a blockchain are treated based on what they do, not just how they were sold.
  • The Act decouples assets from fundraising schemes: digital commodities sold via an offering are not themselves investment contracts.
  • A “mature blockchain” threshold helps identify when decentralization and loss of issuer control support commodity treatment, consistent with the Act’s no presumption approach.

How the Digital Asset Market Clarity Act Divides Oversight

On Jan 15, 2026, Coinbase said it can’t support the CLARITY Act as written, putting a spotlight on the bill’s most consequential feature: who regulates what.

At the heart of the proposal, Congress would grant exclusive jurisdiction over “digital commodities” to the CFTC. In practice, that means the CFTC would supervise the core plumbing of commodity-like tokens—spot markets, trading venues, and intermediaries—while the SEC continues to police traditional securities and offerings. This clean split seeks to end years of case-by-case wrangling by assigning primary responsibility based on how assets function in markets.

Operationally, the Act contemplates CFTC-facing obligations for platforms and brokers dealing in digital commodities, including purpose-built registration regimes and market-integrity standards. Meanwhile, instruments that are securities—like tokenized equity or debt—remain within the SEC’s lane. For builders and exchanges, the dividing line is intended to be actionable: commodity-like tokens trade under CFTC rules; securities stay under SEC oversight.

Industry reaction shows how sensitive these boundaries are. Coinbase argued certain provisions tied to tokenized equities and DeFi could make the bill materially worse than the status quo, warning that an unclear split could restrain innovation rather than clarify it.

If enacted with a stable jurisdictional map, the Act would replace ambiguity with a predictable allocation of duties—CFTC for digital commodities and SEC for securities—so teams can build and list with fewer surprises.

Key Takeaways:

  • The bill gives the CFTC exclusive jurisdiction over “digital commodities,” centralizing oversight of spot markets and intermediaries.
  • CFTC-facing venues would face tailored registration regimes, while securities and offerings remain under the SEC.
  • Coinbase’s Jan 15, 2026 pushback—calling the draft materially worse—underscores how tokenized-equity and DeFi treatment could decide the bill’s fate.

Compliance Duties and Illicit Finance Controls in the Act

In 2024, the U.S. Treasury made its priority explicit: “close legal and regulatory gaps in the U.S. AML/CFT framework that illicit actors exploit to anonymously access the U.S. financial system.” By Jan 2026, national security analysts warned that “without widespread monitoring, stablecoins will become an increasingly attractive avenue for criminal behavior.”

Against that backdrop, the CLARITY Act’s compliance thrust points toward risk-based AML/CFT programs that extend to digital-asset intermediaries and on/off-ramps, aiming to close gaps highlighted by Treasury. In practice, that means stronger customer identification, ongoing transaction monitoring, and timely reporting, with particular scrutiny on stablecoin flows that can move quickly across borders and through non-custodial rails.

For compliance leads, the implementation playbook is clear: integrate on- and off-chain surveillance, calibrate alerts for mixers, cross-chain bridges, and sanctioned exposure, and document escalation paths and suspicious-activity triggers with audit-ready rationale. Build governance for data provenance and model explainability around blockchain analytics, so investigations are both defensible and repeatable. Don’t assume these expectations will be watered down—industry has already balked, with Coinbase saying it can’t support the bill as written.

Stablecoins are the stress test for these controls: policy experts call for widespread monitoring to curb abuse, but the art will be tailoring oversight proportional to risk while respecting privacy and decentralization realities.

Net result: if the Act advances, expect a risk-based AML backbone aligned with national priorities, with the brightest spotlight on stablecoin flows and the intermediaries that touch them.

Key Takeaways:

  • The Act’s direction aligns with Treasury’s push to close AML/CFT gaps, emphasizing risk-based controls across exchanges, brokers, and on/off-ramps.
  • Stablecoins drive the toughest compliance questions, where cross-border velocity and non-custodial tools demand more sophisticated monitoring.
  • Implementation hinges on unifying on/off-chain surveillance, well-calibrated alerts, and documented escalation and reporting practices that stand up to scrutiny.

Political Dynamics, Industry Pushback, and the Path Ahead

On Jan 14, 2026, Coinbase pulled support the night before a planned Senate markup, jolting the coalition behind the CLARITY Act and exposing unresolved fault lines.

The politics are now fluid. Despite the setback, negotiators insist working in good faith continues, and discussions over technical fixes are active. The central question is whether drafters can thread a compromise that both satisfies security hawks and preserves room for innovation.

Coinbase’s objections cluster around market-structure flashpoints: how the bill treats tokenized equities, the scope of DeFi provisions, and rules affecting stablecoin rewards and surveillance. The company publicly said it can’t support the bill as written, signaling that the industry’s biggest players want tighter drafting on these pressure points.

A path forward likely hinges on clarifying the tokenized-equity perimeter, calibrating disclosure and exchange obligations for DeFi-facing activity, and crafting stablecoin rules that target high-risk conduct without overreaching. If those revisions land, the same stakeholders now in opposition could help stabilize the coalition and re-open a viable markup window.

Bottom line: the bill is still in play, but only if negotiators balance investor protection with pragmatic rules on equities, DeFi, and stablecoin incentives.

Key Takeaways:

  • Coinbase’s Jan 14, 2026 move reshaped expectations and forced a rethink of the bill’s most contentious provisions.
  • Talks continue, with negotiators working in good faith to adjust language without undercutting innovation.
  • Compromise will likely turn on clearer treatment of tokenized equities and proportionate DeFi provisions that address real risks without halting market development.

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