The digital asset landscape is rapidly maturing, and with that growth comes an increasing need for regulatory certainty. The proposed Digital Asset Market Clarity Act of 2025, the CLARITY Act, aims to provide just that, establishing a comprehensive framework for blockchain and digital commodity projects. For senior leadership teams navigating this space, understanding the CLARITY Act is not just about regulatory compliance; it’s about unlocking strategic opportunities and ensuring long-term growth in the evolving digital asset market.

Watch: A quick overview of the CLARITY Act and why it could reshape the future of digital assets.

Why the CLARITY Act is Crucial Now 

The current regulatory environment for digital assets remains ambiguous, creating uncertainty for both innovators and investors. The CLARITY Act addresses this challenge by:

• Defining jurisdictions – Clearly outlining the respective roles of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in overseeing digital assets, with the CFTC taking a central role in digital commodity regulation.

  
  

  Watch: The CLARITY Act explained — where regulators draw the line between digital commodities and securities, and why this distinction matters for blockchain projects.

  
  

  

  
  

• Fostering innovation with guardrails – Congress recognizes that digital commodity networks and blockchain systems have the potential to grow the economy, improve lives, and facilitate collaboration. The CLARITY Act supports this responsible development in the United States by providing safeguards for investors and consumers.

• Promoting market integrity – By establishing clear rules for market participants, including digital commodity exchanges, brokers, and dealers, the CLARITY Act seeks to enhance market transparency, prevent manipulation, and protect customers.

Key Strategic Provisions for Digital Asset Projects

The CLARITY Act introduces several critical concepts that directly impact project structuring and fundraising:

• Digital commodity vs. security distinction – The Act defines a digital commodity as a digital asset “intrinsically linked to a blockchain system,” with its value derived, or reasonably expected to be derived, from the use of that system. It specifically excludes securities (with some exceptions), security derivatives, permitted payment stablecoins, banking deposits, and traditional commodities from this definition. Importantly, a digital asset providing voting or economic rights to the blockchain or decentralized governance system, or appreciating due to efforts of that governance system, does not solely make it a security. This clarity is vital for projects like RACE, which focus on tokenized real-world assets (RWAs) and aim to integrate non-crypto native investors into the on-chain environment.

  
  

  Watch: Digital Commodity x Security Distinction explained in 2 minutes — why the CLARITY Act draws a line between securities and digital commodities, and what that means for projects like RACE.

  
  

  

  
  

• The “Mature Blockchain System” benchmark – A key concept in the CLARITY Act is the mature blockchain system, defined as a blockchain system and its related digital commodity that “is not controlled by any person or group of persons under common control.” Achieving mature status is a prerequisite for significant regulatory flexibility, including exemptions from Securities Act registration for certain primary market offers and sales of investment contracts involving digital commodities. Issuers must intend for their system to reach mature status within four years of the first exempt sale, or face additional obligations and disclosures.

• Distributed ownership and the 20% insider limit – To be deemed mature under statutory criteria, a blockchain system must demonstrate distributed ownership. This means that no digital commodity issuer, digital commodity related person, or digital commodity affiliated person can beneficially own, in total, 20% or more of all units of the digital commodity. Even if tokens are locked in a smart contract with a predefined distribution, they will count toward this 20% limit if they are beneficially owned by the issuer or specified insiders—such as founders, executive officers, individuals with rights to acquire 5% or more, or certain promoters and senior employees with rights to acquire 1% or more.

  
  

  The DAO Advantage: "Decentralized Governance Systems": 

• This is where well-structured Decentralized Autonomous Organizations (DAOs), referred to in the CLARITY Act as decentralized governance systems—become a critical strategic tool.

  
  

• A decentralized governance system is defined in the CLARITY Act as a transparent, rules-based framework where participants can reach consensus or agreement on the blockchain system’s development, provision, publication, maintenance, or administration.

  
  

• Crucially, participation in a decentralized governance system must not be restricted to, or under the effective control of, any individual or group of individuals under common control.

  
  

• A decentralized governance system and its individual participants are generally treated as separate persons, unless those participants are under common control or acting in concert.

  
  

• Importantly, a decentralized governance system is not considered a “person” or a “group of persons under common control” for the purpose of mature blockchain system certification. This means that if 50% of a digital commodity’s supply is genuinely controlled by a DAO meeting these stringent criteria, it would likely not count toward the 20% insider beneficial ownership limit.

  
  

• This allows projects to vest tokens in a truly decentralized treasury or multi-signature (multi-sig) wallet controlled by independent participants through transparent on-chain governance, without those holdings automatically triggering the insider ownership limits.

• DeFi exclusions and self-custody protections – The CLARITY Act provides exclusions for various decentralized finance (DeFi) activities, such as compiling network transactions, providing computational work (e.g., node operation, oracle services), developing or publishing blockchain systems or DeFi protocols, and offering self-custody solutions like hardware wallets or software wallets. These activities would not subject a person to SEC or CFTC regulation under the Act, although anti-fraud and anti-manipulation authorities would still apply. This is particularly relevant for platforms like RACE, which focus on “securely, simply” accessing global investments and enabling non-crypto native investors to navigate the on-chain environment in a non-custodial way.

  
  

Strategic Implications for Leadership

The CLARITY Act emphasizes a shift toward a truly decentralized ecosystem for digital commodities. For projects seeking widespread adoption and regulatory clarity, key strategic considerations include:

• Prioritizing decentralization from day one – Projects aiming for mature blockchain system status must design their token distribution and governance models to genuinely distribute control and ownership, going beyond simple vesting schedules.

• Robust DAO implementation – For tokens intended for ecosystem development or long-term treasury, structuring their control under a decentralized governance system (DAO) that meets the CLARITY Act criteria is essential. This requires transparent rules, broad and uncontrolled participation, and decision-making mechanisms that are not under the unilateral authority of any centralized group.

  
  

• Clear disclosures – Issuers relying on exemptions under the CLARITY Act must provide extensive disclosures, including source code, transaction history, digital commodity economics, development plans, and ownership disclosures.

This legislation underscores a regulatory focus on genuine decentralization to differentiate between investment contracts (securities) and digital commodities. Strategic recommendations should therefore prioritize models that clearly distribute ownership and distribute control, leveraging the framework of decentralized governance systems to achieve mature blockchain system status.

Watch: Strategic implications of the CLARITY Act — how leadership teams can balance innovation opportunities with the risks of regulatory loopholes.

Next Step Suggestion:

To assess the viability of a DAO structure for your project’s existing or planned token distribution, it is essential to closely review the “unilateral authority” clause. This ensures that no single entity or group of insiders retains the ability to control or materially alter the blockchain system or its digital commodity, or to direct 20% or more of voting power. This evaluation will determine whether the proposed DAO truly divests control to the extent required to avoid counting toward the insider ownership limits.

Watch: Final reflections on the CLARITY Act — balancing innovation with accountability, and why some critics warn of hidden risks.