Before assuming office for his second term, President Trump made clear that his administration would renew a push for United States leadership in cryptocurrency. The technology is increasingly common, accessible, and beneficial for economies and users. However, in a world where emerging technologies are so heavily regulated, interested Americans have been hesitant to jump all in, citing uncertainty and fear of regulatory action because the U.S. government hasn’t established guardrails like some other countries.

Last week, declared “Crypto Week” by Congress, the House considered three bills related to cryptocurrency that have major implications for the future of the technology: the GENIUS Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act.

The GENIUS Act is designed to regulate stablecoins, cryptocurrencies with a value tied to something relatively stable like a traditional currency or gold. The Act offers a framework for the use of coins backed by other U.S. currency and will help ease user concerns about fraud and security. The White House Fact Sheet on the new legislation lists its stated goals: making America the leader in digital assets, protecting consumers in digital markets, ensuring U.S. dollar global reserve security status, combating illicit activity in digital assets, and delivering on promises to make America the crypto capital of the world. The act makes progress toward providing the same clear standards offered in all other areas of financial regulation. However, the Act still includes some conditions that make the use of stablecoins more onerous than the free market requires. Restrictions on who can issue stablecoins and stringent standards for financial stability add red tape to a law meant to provide a clear, less bureaucratic path forward.

The CLARITY Act, like the GENIUS Act, provides guidelines for the use of cryptocurrency. Aptly named, the Act seeks to dispel some of the ambiguity around conduct, oversight, and definitions. The legislation is largely welcomed by those within the crypto industry—it’s difficult to compete without a playing field. Like its GENIUS Act counterpart, the CLARITY Act wavers in the area of oversight, placing great authority in the hands of certain agencies over Congress.

Finally, the Anti-CBDC Surveillance State Act, which didn’t get the pithy acronym memo, is aimed at preventing the government from establishing a central bank digital currency (CBDC). CBDCs do not offer the same privacy or freedom as other forms of cryptocurrency because they are government based and generated. The capacity for innovation and competition is not available under a CBDC framework, and users will inevitably have all of their financial transactions monitored by the government. In “What Will the Future of Digital Money Look Like?” we offer a comparison between CBDCs and a popular form of crypto, Bitcoin. The legislation in question aims to act as a  preventative measure in balancing the surging popularity of crypto with the potential for excess regulation.

Cryptocurrency done right can promote innovation and competition. Users and those within the industry deserve clear standards that make accessing the benefits of digital currency more seamless, less ambiguous, and less prone to bureaucratic red tape. The aftermath of Crypto Week and the legislation passed will be telling. If the free market is allowed to operate, improving the flow and security of these digital currencies, the United States can achieve the stated mission of crypto leadership while keeping consumers safe.

Links to Learn More

House sends crypto bill to Trump in historic win for industry – Live Updates – POLITICO

The GENIUS Act Is a Good Start, but Congress Could Make It Smarter | Cato Institute

America Requires Regulatory Clarity Before Blockchain Bears Its Bounty