Congress has advanced a major crypto market bill that would give the CFTC new power over digital commodities despite fresh concerns about the agency’s staffing and funding.
Summary
- Congress has advanced the CLARITY Act, which would give the CFTC primary oversight of spot digital commodity markets.
- Brookings fellow Tonantzin Carmona warned that the CFTC may lack enough staff and funding to handle the new crypto mandate.
- The bill would require crypto exchanges, brokers, dealers, and custodians to register with the CFTC under new rules.
Brookings fellow Tonantzin Carmona has warned that the Digital Asset Market Clarity Act could create a large regulatory system without giving its main watchdog enough resources to run it. Her concern centers on the Commodity Futures Trading Commission, which would become the chief regulator for spot trading in most digital commodities under the bill.
The legislation, known as the CLARITY Act or H.R. 3633, cleared the House in July 2025. The Senate Banking Committee advanced the measure on May 14, 2026, after bipartisan negotiations over digital asset market rules.
Supporters of the bill say it would end years of conflict between the Securities and Exchange Commission and the CFTC over crypto oversight. Critics, including Carmona, say Congress may be assigning one of the largest new financial-market jobs in years to an agency with limited staff.
CFTC faces resource questions
According to the CFTC’s budget documents, the agency’s FY2026 enacted budget was approximately $365 million. The agency later requested $410 million and 650 full-time equivalent staff for FY2027.
Carmona has argued that those numbers matter because the CLARITY Act would shift significant portions of crypto spot-market supervision to the CFTC. She compared the scale of the new duties to major post-crisis financial rules, while noting that the agency has never operated with the same retail-facing structure as the SEC.
The SEC’s budget remains much larger than the CFTC’s. The comparison has become central to the debate because the bill would reduce the SEC’s role in many crypto markets while giving the smaller commodities regulator a new mandate.
What the CLARITY act would change
Under the CLARITY Act, the CFTC would receive exclusive authority over spot transactions involving digital commodities. Crypto exchanges, brokers, dealers, and custodians handling those assets would have to register with the agency.
The bill gives regulators 360 days to complete rulemaking. It also sets a 270-day effective date for registration requirements, as described in the legislative framework of the proposal.
The Senate Banking Committee said the bill is designed to establish clear rules for digital assets. Committee Republicans, led by Chairman Tim Scott, described the markup as a step toward a national market structure for crypto.
Retail market oversight draws scrutiny
Carmona’s criticism focuses on the difference between derivatives markets and spot crypto markets. The CFTC has long supervised futures, swaps, and options, which are mostly used by professional and institutional traders.
Spot crypto markets involve many retail users. Brookings research has warned that retail-heavy crypto markets raise consumer protection concerns, including fraud, manipulation, and investor losses.
The SEC has historically handled retail investor protection through disclosure rules, enforcement programs, and investor education. Carmona’s argument is that those functions do not move automatically to the CFTC simply because Congress changes the legal label attached to crypto assets.
The proposed framework would treat many crypto assets as digital commodities, placing them outside the SEC’s main trading oversight once they meet the bill’s conditions.
That classification would affect assets such as Bitcoin, Ether, Solana, and XRP if regulators apply the proposed taxonomy in final rules. For crypto firms, the bill offers a clearer path to registration.
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