The US Senate Banking Committee is set to markup the Clarity Act on May 14, a bipartisan bill that would establish the first comprehensive regulatory framework for digital assets in the country.

The Clarity Act, formally known as the Digital Asset Market Clarity Act, would define the jurisdictional boundaries between the SEC and CFTC. In English: it would finally answer the question of whether a given token is a security or a commodity, and which agency gets to police it.

What the bill actually does

At its core, the Clarity Act is an attempt to replace what critics have called “regulation by enforcement” with an actual rulebook. Instead of the SEC suing projects after the fact and letting courts sort out the…