CEA Five Freedoms Analysis
Digital Asset Market CLARITY Act
H.R. 3633 · 119th Congress · Sponsored by Rep. French Hill (R-AR)
+2
on a -100 to +100 scale
CEA's Position
Support: amendments required
The Senate-reported substitute provides regulatory certainty for digital assets but deletes the House anti-CBDC title, so it does not satisfy CEA's CBDC requirement. Congress should restore and strengthen a permanent CBDC prohibition and add protections for cash, due process, privacy, and competition before final passage.
Bill Summary
What the CLARITY Act Does
The Digital Asset Market CLARITY Act establishes a comprehensive regulatory framework for digital assets in the United States, clarifying the jurisdictional boundary between the SEC and CFTC and providing consumer protections for digital asset holders. This assessment applies to the Senate-reported substitute of June 1, 2026, which deletes the House anti-CBDC title.
The bill ends years of regulatory uncertainty that has driven blockchain innovation offshore, encourages responsible American leadership in digital finance, and advances American leadership in digital finance.
While the legislation does not itself establish a CBDC, it creates much of the legal and regulatory infrastructure on which future digital finance will operate. CEA is particularly attentive to long-term risks if the Act is not strengthened with durable liberty safeguards.
Five Freedoms Analysis
How the CLARITY Act Scores
| Freedom | Score | Analysis |
|---|---|---|
| First Freedom | 0 | No direct effect on religious liberty or conscience protections. |
| Economic Freedom | +8 | A material net benefit from market access and legal certainty. Competition restrictions, including stablecoin-yield limits, reduce the calibration. Section 305 distinguishes voluntary holds and liability protection from compliance with lawful court orders. |
| Healthcare Freedom | 0 | No direct impact on employer healthcare obligations. |
| Workforce Freedom | 0 | No direct effect on employment terms or workforce obligations. |
| Operational Freedom | -6 | A material net burden. Implementation complexity and control over transactions outweigh the operational relief in this version. Developer and self-custody protections are not blanket exemptions. |
Biblical Principles
Scripture Foundation
✓ Honest Weights and Measures
"A just weight and balance are the LORD's: all the weights of the bag are his work." — Proverbs 16:11 (KJV)
Transparent, congressionally established rules promote fairness over regulation by enforcement. The CLARITY Act restores legislative authority over digital asset markets, checking the tendency of administrative agencies to act beyond their congressional mandate.
Impact Analysis
Positive Findings and Areas of Concern
Positive Findings
- Ends years of regulatory uncertainty surrounding digital assets
- Clarifies SEC and CFTC jurisdiction
- Strengthens consumer protections
- Encourages responsible blockchain innovation
- Supports continued U.S. dollar leadership through regulated private stablecoins
- Provides a small-firm sandbox and developer and self-custody protections
Areas of Concern
- The Senate substitute deletes the House anti-CBDC title
- Expanded financial surveillance infrastructure
- Mandatory digital identity systems
- Increased dependence on regulated intermediaries
- Market concentration among a handful of financial institutions
- Easier freezing or restriction of assets
- Normalization of programmable financial controls
- Gradual decline of physical cash through market incentives
- Creation of a "Private CBDC" ecosystem
These concerns are not direct statutory effects of the Act but represent plausible downstream risks if appropriate safeguards are not enacted alongside this legislation.
Recommended Amendments
What Congress Must Add
CEA should support the CLARITY Act only if Congress strengthens protections for individual financial liberty. CEA recommends the following eight amendments:
- Amendment 1Permanent Prohibition on a Federal Reserve Retail CBDCRestore and strengthen a permanent prohibition on Federal Reserve CBDC development, testing, and issuance, directly or through intermediaries. Requested amendments receive no score credit until included in reviewed text.
- Amendment 2Preserve Physical CashRequire continued legal tender status for cash and ensure Americans retain meaningful access to physical currency in day-to-day commerce.
- Amendment 3Financial Due ProcessRequire judicial review and due process before accounts may be frozen or digital assets restricted, except in narrowly defined emergency circumstances with strict time limits.
- Amendment 4Protect Lawful Self-CustodyAffirm that Americans retain the right to hold and control their own digital assets without mandatory use of regulated custodians.
- Amendment 5Limit Financial SurveillanceAdopt statutory data minimization standards including purpose limitation, retention limits, strict access controls, and meaningful penalties for misuse of financial data.
- Amendment 6Protect Against Programmable Financial RestrictionsProhibit government agencies from requiring programmable restrictions on lawful purchases, geographic limitations, expiration dates, or other forms of behavioral financial control.
- Amendment 7Preserve CompetitionPrevent excessive market concentration by ensuring regulatory requirements remain proportional and do not favor only the largest financial institutions over smaller innovators.
- Amendment 8Protect PrivacyRequire explicit congressional approval before any future expansion of digital identity or transaction monitoring beyond existing AML requirements.
Fiscal and Economic Impact
Economic Effects
Positive Economic Effects
- Greater investment certainty in digital asset markets
- Increased blockchain innovation and domestic competitiveness
- Improved international competitiveness
- Stronger consumer protections
- Continued dollar dominance through private stablecoins
Potential Risks
- Higher compliance costs for smaller firms
- Increased regulatory burden on innovators
- Consolidation among larger financial institutions
- Long-term dependence on regulated digital financial intermediaries
CEA's Position
Support: amendments required · BBI Score: +2
The Christian Employers Alliance supports Congress's effort to provide regulatory clarity for digital assets but the Senate substitute deletes the House anti-CBDC title and does not satisfy CEA's CBDC requirement. The +2 score is a modest net assessment of the text as written and does not authorize unconditional support. Moreover, Congress should not modernize America's financial infrastructure without simultaneously enacting durable safeguards that protect privacy, due process, property rights, competition, and individual financial liberty.
The CLARITY Act should not be viewed simply as cryptocurrency legislation. It establishes much of the legal architecture upon which future digital finance will develop. Congress has a responsibility to ensure that this architecture advances innovation without creating conditions that could eventually enable centralized financial control through government-supervised private institutions.
The CLARITY Act should not be viewed simply as cryptocurrency legislation. It establishes much of the legal architecture upon which future digital finance will develop. Congress has a responsibility to ensure that this architecture advances innovation without creating conditions that could eventually enable centralized financial control through government-supervised private institutions.
CEA supports H.R. 3633 only with targeted amendments that protect financial liberty alongside clearer digital-asset market rules. The reviewed Senate substitute removes the House anti-CBDC title, so CEA requires restoration and strengthening of a permanent prohibition on Federal Reserve CBDC creation or issuance, directly or through intermediaries. Final legislation must also protect cash, privacy, lawful self-custody, due process, and competition; the current net BBI score does not authorize unconditional support.