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Following the recent “Crypto Week” in the United States, which focused on advancing three key digital asset bills, two made significant progress: The GENIUS Act was signed into law, while the CLARITY Act is now under Senate review after passing in the House.
Meanwhile, the third bill, the Anti-CBDC Surveillance State Act, also cleared the House and is currently awaiting action in the Senate.
While there are three key pieces of legislation under U.S. President Donald Trump’s pro-crypto initiatives, this article explores the key differences between two influential pieces, the GENIUS Act and the CLARITY Act, and what they mean for the future of digital finance regulation in the U.S.
What is GENIUS Act
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) creates clear federal rules specifically for payment stablecoins, digital tokens backed 1:1 by U.S. dollars and designed to function like money. It does not cover other types of crypto tokens like digital commodities or investment-type assets.
According to its provisions, only certain entities are allowed to issue these stablecoins, including:
- Subsidiaries of U.S. banks,
- Nonbank companies approved by the Office of the Comptroller of the Currency (OCC),
- State-approved issuers with a market cap under $10 billion.
To protect users, the act requires stablecoin issuers to hold enough cash or safe assets (like short-term U.S. Treasury bills) to fully back every token in circulation. They must report their reserves every month, undergo third-party audits, and have their top executives sign off on the accuracy of those reports.
Oversight is handled by major financial regulators like the OCC, Federal Reserve, and Federal Deposit Insurance Corp. (FDIC), and state-level issuers must follow nearly identical rules.
The act also includes strict anti-money laundering (AML), sanctions compliance, and custody protection rules to keep the system safe and legal.
If a stablecoin company fails, the law gives token holders first claim to the funds, ensuring their money is protected. However, companies are not allowed to pay interest on stablecoins, so these tokens are not treated like bank deposits.
Legally, the act makes it clear that payment stablecoins are not securities or commodities, so the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC) can’t regulate them like stocks or futures.
Lastly, foreign stablecoin issuers are allowed only if they meet strict conditions: They must follow similar regulations in their home country, register with U.S. regulators, hold reserves in the U.S., and not be based in sanctioned countries.
What is Clarity Bill
The Digital Asset Market Clarity Act (CLARITY Act) of 2025 is a U.S. bill designed to bring regulatory clarity to the digital asset space.
The bill outlines clear classifications, distinguishing between:
- Digital commodities (e.g., decentralized tokens),
- Digital securities (e.g., tokens sold through profit-sharing or under centralized control).
This classification helps determine whether the CFTC or SEC has oversight. Most decentralized assets would be treated as commodities, while more centralized or profit-driven tokens fall under the SEC.
Under the act, most decentralized digital assets would be regulated as commodities by the CFTC, while tokens that involve profit-sharing or central control would fall under the SEC.
Crypto companies such as exchanges, brokers, and dealers would be required to register with the CFTC and follow AML and Know Your Customer (KYC) rules.
The bill also introduces a self-certification process, allowing blockchain projects to declare their path toward decentralization and, if approved, be treated as commodities.
To support innovation, the bill includes exemptions for small fundraising efforts and provides a clear framework for stablecoin oversight.
“This legislation is a good first-step towards victory for American innovation, economic freedom, and financial sovereignty… H.R. 3633 provides commonsense rules for digital assets that will finally allow builders, developers, and entrepreneurs to operate without fear of arbitrary enforcement or political targeting. It sends the message that America welcomes innovation, rewards ingenuity, and stands firmly against the bureaucratic overreach that has driven too many jobs and too much capital overseas.”
Office of Management and Budget, Executive Office of the President
Compare and Contrast: Key Differences
| Feature | GENIUS Act | CLARITY ACT |
| Legal Status | Enacted (July 18, 2025) | Passed House, pending Senate |
| Asset Focus | Payment stablecoins only | Digital commodities, tokens |
| Legal Treatment | Excludes stablecoins from securities/commodities law | Uses maturity model: security → commodity |
| Primary regulators | Banking regulators, Treasury / BSA compliance | dual framework: CFTC (majority), SEC (fraud, investment contracts) |
| Reserve/enforcement | 100% reserves, audits, certifications, criminal penalties | Platform rules, governance, anti-fraud, custody |
| Issuer Rules | Strict PPSI criteria, reserve & audit rules | Registration rules for intermediaries & fraud liability |
| Consumer protection | Bankruptcy priority, marketing restrictions | Asset segregation, risk management |
| DeFi & Protocols | No direct mention | Explicit non‑custodial DeFi protections |
| Anti-fraud | AML/BSA/sanctions via banking regulators | SEC anti‑fraud extends to commodities & stablecoins |
| Goal | Expand stablecoins in mainstream payments | Provide comprehensive clarity in markets |
This article is published on BitPinas: Comparing the Genius Act and CLARITY Bill: Key Differences
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