CLARITY Act and MiCA: Opposing Regulatory Philosophies for Cryptocurrency

The CLARITY Act and MiCA are two regulatory frameworks for cryptocurrency in different jurisdictions. The CLARITY Act, passed by the House on July 17, 2025, splits oversight between the SEC and CFTC using a decentralization test. In contrast, MiCA classifies tokens by function under one EU license.

The CLARITY Act uses a four-part 'mature blockchain system' test to decide whether a token is a digital commodity or a security: its code must be open-source, rules transparent, no single party in control, and no person or group holds 20% or more of the tokens. The Senate Banking Committee approved the bill on May 14, 2026.

However, the revised text has been modified to address concerns raised by Democrats. It includes new restrictions for federal officials regarding digital assets, state attorneys general gaining power to enforce bans, and civil penalties for non-compliance.

MiCA, which took effect on December 30, 2024, sorts tokens into three groups: asset-referenced tokens (ARTs), e-money tokens (EMTs), and other crypto-assets. One CASP license allows a firm to operate across all 27 EU member states, with over 300 authorized firms.

The core differences between CLARITY and MiCA lie in stablecoins and DeFi. Under MiCA, only credit institutions or licensed e-money institutions can issue EMTs. In contrast, the GENIUS Act prohibits passive yield on stablecoins but allows rewards tied to activity like transactions or payments under the new community-bank restriction.