Lummis backs CLARITY Act to shield developers, tighten AML

Sen. Cynthia Lummis introduced the CLARITY Act, H.R. 3633, on May 11, 2026 to change how federal law treats blockchain developers and digital asset firms. The bill would exempt some software developers from money-transmitter classification and assign clearer regulatory roles to the Securities and Exchange Commission and the Commodity Futures Trading Commission. The text also prohibits the Federal Reserve from issuing a central bank digital currency for monetary policy purposes, effective upon enactment.

Under the proposal, the SEC would oversee digital assets that resemble securities and the CFTC would oversee digital commodities. Sponsors say the split is intended to reduce uncertainty about which federal agency enforces rules for particular tokens and platforms. A Senate committee markup is scheduled for May 2026.

A central provision exempts certain blockchain software creators from being treated as money transmitters under federal law when they meet specific conditions set in the bill. The exemption is aimed at projects that provide protocol-level code or open-source software and do not engage in activities that move or custody customer funds. Supporters argue that the current money-transmitter designation brings licensing requirements, compliance programs and legal exposure that can burden early-stage projects.

On enforcement, the CLARITY Act would require digital commodity brokers to follow targeted anti-money-laundering and counter-financing-of-terrorism rules. The legislation grants federal agencies clearer authority to investigate and pursue illicit activity involving commodity-like digital assets while applying distinct compliance obligations to brokers that handle those assets.

The bill contains a provision barring the Federal Reserve from issuing a CBDC for monetary policy purposes. Lummis has described Bitcoin as “freedom money” and presented the CBDC ban as aligned with financial privacy protections.

The CLARITY Act mandates federal studies on risks tied to decentralized finance and on illicit use of digital assets. Reports must be delivered between 180 and 360 days after the law takes effect. Lawmakers intend the studies to inform any later rulemaking rather than to impose immediate new restrictions on DeFi protocols.

Market participants could see more definitive classifications of which tokens fall under securities law and which are treated as commodities. Those determinations could influence exchange listings, custody offerings and institutional investment decisions. The AML and CFT requirements for digital commodity brokers will introduce new compliance costs and operational duties that smaller exchanges and brokerage platforms may find difficult to meet.

Crypto advocacy groups have expressed support for the bill, saying a single federal framework would reduce relocations of teams and capital to other jurisdictions. The May 2026 Senate markup will be monitored by traders, exchanges and institutional investors for its impact on market practice and enforcement priorities.