A16z Warns U.S. May Fall Behind EU as CLARITY Advances

The Senate Banking Committee voted on May 14, 2026, to advance the Digital Asset Market CLARITY Act. The committee’s bipartisan markup moves the bill to the Senate floor, where drafts from the Banking and Agriculture committees will be merged. If the combined bill clears the full Senate, it would return to the House. A House version, H.R. 3633, passed in July 2025 by a 294-134 margin, including 78 Democrats. A presidential signature would make the bill law.

CLARITY seeks to define when a digital asset is a security and when it is a commodity, and to set rules for crypto exchanges and consumer protections for trading. The text aims to allocate regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission, a point of dispute for market participants and regulators.

Miles Jennings, general counsel and head of policy at A16z Crypto, described the current enforcement environment as “regulation-by-enforcement,” writing that it has penalized some developers while leaving room for bad actors. He wrote that CLARITY builds on the GENIUS Act, a stablecoin framework enacted in July 2025, and credited that law with measurable adoption gains, including stablecoin integrations with AI agents.

Jennings described centralized companies as operating under central control and retaining most platform revenue. He contrasted them with decentralized networks, which coordinate participants through shared rules and aim to distribute value to users. Jennings pointed to ride-sharing and music streaming as examples where platform operators capture the majority of revenue.

A16z warned that the European Union’s Markets in Crypto-Assets regulation and the United Kingdom’s crypto rules offer defined frameworks that could attract startups, capital and jobs if the United States does not adopt comparable rules. The firm plans to publish a detailed breakdown of what CLARITY covers and does not cover for builders after the bill reaches the Senate floor and any final amendments are made.