The CLARITY Act Calls Bitcoin a Commodity. I'm Not Buying It

The Senate votes on the CLARITY Act at 2:15pm Eastern on Tuesday 15 September. Bitcoin didn't wait for it. It opened on Monday at $76,804 and was trading near $79,000 by the evening, on the strength of a bill text most of the people buying haven't read.

The CLARITY Act files Bitcoin as a digital commodity and hands its spot market to the Commodity Futures Trading Commission. My timeline is calling that bullish. I think the box is wrong for Bitcoin, I think the trade into the vote is wrong too, and I'll explain both without pretending I'm certain about either.

What the CLARITY Act actually does to Bitcoin

The bill is H.R. 3633, the Digital Asset Market Clarity Act. It passed the House in July 2025. In the Senate, the Agriculture Committee cleared its half 12 to 11 in January, the Banking Committee cleared its half 15 to 9 on 14 May, and the final merged text landed over the weekend of 13 and 14 September carrying 126 changes Democrats asked for. Republicans hold 53 seats. Cloture needs 60, so at least seven Democrats have to cross over.

Here's what it does, in plain terms:

• Tokens whose value comes from a working blockchain, with Bitcoin first in line, become digital commodities. The CFTC takes their spot markets, and the exchanges, brokers and dealers that trade them register there.
• Tokens that are still an investment in somebody's project stay with the SEC until the network is decentralized enough to move across.
• Section 404 bans platforms from paying stablecoin rewards that work like interest on a bank deposit. Rewards tied to real activity survive.
• Federal officials and their spouses have to sell significant crypto holdings or park them in a blind trust. That ethics clause was one of the last fights holding the vote up.

Yes, Bitcoin was already a commodity

The first thing people say when I make this argument is that nothing new is happening. On the law, they're right.

The CFTC has treated Bitcoin as a commodity since 2015. Bitcoin futures have traded on the CME since December 2017, and a federal court in New York backed the commodity reading in CFTC v. McDonnell in 2018. Gold is a commodity under the same statute and nobody thinks that stopped gold being money. The things that really keep Bitcoin from working as money in America are older and duller. The dollar is the only legal tender, and the IRS has taxed Bitcoin as property since 2014, so paying for a coffee with it counts as a taxable sale.

So the CLARITY Act doesn't turn Bitcoin from money into soybeans. I accept that.

But I was never making a legal argument. Read every objection through a statute and you miss what a label does to the people who buy under it.

A label decides who shows up

The CFTC is the derivatives regulator. Futures, options, swaps, margin. That's the machinery it exists to supervise, and when you file an asset under it, the products that follow are the ones that regulator already knows how to approve.

Look at what happened the last time Bitcoin got commodity plumbing. Economists at the San Francisco Fed, in Economic Letter 2018-12, pointed out that Bitcoin's 2017 peak of $19,511 came on 17 December 2017. That was the day CME futures opened. Their explanation was simple. Before futures, the only way to act on a view was to buy, so optimists set the price. Once futures existed, pessimists could sell Bitcoin they never owned, and the price turned.

Saifedean Ammous tells an older version of the same story in The Bitcoin Standard. Gold was money for thousands of years. Then it moved into bank vaults, people traded paper claims on it instead of the metal, and whoever held the vaults ended up controlling the money. Gold is still a commodity today. For most people it's also something you watch on a chart, not something you get paid in.

That's my worry for Bitcoin. Nobody is going to ban you from saving in it. The commodity box just makes the paper version the easy version: the ETF in your brokerage app, the future on the exchange, the perpetual swap with 50x one tap away. Every one of those lets you hold an opinion on Bitcoin's price without ever holding a Bitcoin.

For a Muslim the last two aren't a matter of taste either. Futures and leveraged perps fail on their own terms, long before any regulator gets involved.

The Bitcoiners who said this before me

I'm far from the first person to argue that Bitcoin should be treated as money that stands outside the riba system. Three people I read:

Harris Irfan co-founded Deutsche Bank's Islamic finance team, later ran Islamic finance globally at Barclays, and then wrote Heaven's Bankers about what went wrong inside that industry. In a 2022 post he put his view in one line: "#Bitcoin is the most Islamic form of money ever invented." This July he taught a free course called Prophetic Economics at the Shah Jahan Mosque, and its final session covered why Bitcoin is anti-riba and why he thinks Mufti Taqi Usmani is wrong about it. To be fair to him, he doesn't call every Bitcoin ETF haram. In February 2024 he wrote that a fully Bitcoin-backed ETF could be permissible, subject to conditions. His case is about what money should be, and he makes it without banning the wrapper.

Muslim Bitcoiner, who wrote Anti-Riba Money and co-founded Bitcoin Majlis, argues that riba is built into the way fiat money gets created, so you can't remove it by renaming the products. In a post this April he wrote that Bitcoin won't take real root among Muslims while it's squeezed into the same fiat institutions and habits that were built on riba money. Last October he was blunter, mocking the buyer who reads a fatwa calling Bitcoin halal and takes it as permission to buy an ETF and flip it for ten percent.

Saifedean Ammous has no patience for the idea that this bill is some grand strategy. On 19 August he wrote that the CLARITY Act would mostly help the Trump family run their own token ventures more effectively and more safely. You don't have to share his politics to notice that a clause about officials' crypto holdings was among the last things standing between this bill and a vote.

Why the box matters more if you're Muslim

Here's the part no American statute will tell you.

Our scholars don't agree on which box Bitcoin belongs in either, and the way they disagree tells you something.

• Mufti Muhammad Abu-Bakar, in his April 2018 paper for Blossom Labs, held Bitcoin permissible as customary money.
• The Shariah Advisory Council of the Securities Commission Malaysia, at its meetings in June and July 2020, classed digital assets as 'urudh (goods or commodities), which puts them outside the strict hand-to-hand rules of currency exchange, sarf.
• Mufti Faraz Adam, after changing his view in public, holds that Bitcoin takes the ruling of a currency for as long as people actually use and exchange it as one.

Three positions. One hinge. Every one of them turns on urf, custom, meaning what people actually treat the thing as. Money if it's used as money. A commodity if it's held and traded like one. All six major rulings are compared side by side here.

So when the biggest capital market on earth writes into law that Bitcoin is a commodity, builds its exchanges around that, and lets the product shelves fill up to match, that's not neutral paperwork for us. It pushes the custom. And custom feeds the ruling.

That's my actual position, and I want to state it carefully because it's easy to caricature. Bitcoin can be everything. Money you save in, money you pay with, an asset you buy and sell. It passes our screen as Halal whichever of those you use it for. My objection is to a law choosing one of those identities and building a whole market around it, because the identity a regulator picks is the one a new buyer learns first.

I'll admit the weak spot. A statute can't regulate something it refuses to define, and the realistic alternative to "commodity" in Washington was never "money". It was the SEC calling Bitcoin a security, which would have been worse. I don't have a better legal box to offer. I just don't think we should throw a party for this one.

The biggest fight in this bill was about interest

One more detail tells you whose bill this is.

On 14 January, on the eve of its Senate Banking markup, Coinbase pulled its support and the committee postponed. Bitcoin never came up in that fight. What split the room was who gets to pay interest on digital dollars. Banks wanted platforms barred from paying yield on stablecoins, because that yield competes with their deposits. Coinbase, which took in $1.35 billion of stablecoin revenue in 2025, wanted to keep paying rewards. The Section 404 compromise, announced on 1 May, split the difference.

A ban on paying interest to stablecoin holders isn't something I'm going to complain about. But it was written to protect bank deposits. Nobody drafted it to keep anyone clear of riba.

So the loudest argument inside the biggest crypto bill Congress has attempted was an argument about riba, and nobody in that room was arguing for Bitcoin as money. Why debt-free money matters in the first place is the conversation this bill never had.

Why I'm bearish into the vote

Now the trade, which is a separate question from the principle.

On 14 May the Senate Banking Committee passed this bill 15 to 9 after a bipartisan deal. The headlines were about as bullish as headlines get, and I expected the opposite. Bitcoin closed that day at $81,075. By 5 June it was at $61,042. By 30 June it was at $58,526, down 28% from the day of the vote.

One correct call is one correct call. I'm not telling you this so you think I can read the future. I'm telling you because the setup rhymes: a political event everyone has been told is bullish, a green candle printed on anticipation, and a crowd buying the news before the news arrives.

When everyone who wanted to buy the event has already bought it, who's left to buy after it?

Maybe cloture passes and Bitcoin runs anyway. That's possible, and if it happens I'll have missed part of a move. I'm fine with that. Maybe the vote fails and the anticipation unwinds. Either way, I won't be making a decision in the hour after a Senate vote. Not on a headline.

What I'm doing instead of chasing it

Nothing clever. The same plan I use every time, and it's my plan for my money, not a signal for yours.

I mark demand zones on the daily chart and nothing lower, because a daily close is expensive to fake. I look once a day after Fajr, not every time a senator speaks. I buy spot with money I own, and I decide my second entry before I place the first, so a close below my zone is already part of the plan instead of a reason to panic. Invalidation is a daily close through the zone. Not a wick.

If you want a read on whether the market is stretched before you act, that's what the Supply and Demand Index is for. And choosing not to buy into an event is a position in itself, one of the ways of being bearish without shorting.

If Bitcoin comes down to my zone after this vote, I'll buy it, whatever Congress has decided to call it. If it doesn't, I wait.

You watched that green candle on Monday. Maybe you felt the pull. That pull is exactly what a commodity market is built to produce, and a Muslim holding Bitcoin as money has no reason to answer it.

Bitcoin didn't need Congress to tell it what it was in 2009. It doesn't need Congress now.