If you follow crypto, you have heard the CLARITY Act mentioned constantly, usually as the catalyst that could send tokens like XRP higher. But what actually is it, what would it change, and where does it stand? This plain-English guide explains the most important crypto bill in the US, who it affects, and why the whole industry is watching it.

What is the CLARITY Act?

The CLARITY Act is proposed US legislation designed to create clear rules for how cryptocurrencies are regulated. Its full focus is resolving the single biggest question that has hung over the American crypto industry for years: which digital assets are securities (regulated by the SEC) and which are commodities (regulated by the CFTC).

That distinction sounds technical, but…