The United States has long been cautious about cryptocurrencies, viewing them as too dangerous for the average citizen and risky for the financial system. However, that stance has shifted dramatically this week, marking a historic moment for the digital currency sector.
In a significant vote in the House of Representatives earlier this week, Congress passed the country’s first major cryptocurrency legislation, signaling a fundamental change in how the U.S. views digital currencies.
Following the vote, the total market value of cryptocurrencies surged to a record $4 trillion, a reflection of the excitement and optimism pervading the sector.
On Friday, President Trump — who has expressed his goal to make America the “crypto capital of the world” — signed the bill into law in a ceremony attended by Republican lawmakers, who cheered as the bill passed.
“This afternoon, we take a giant step toward solidifying American leadership in global finance and crypto technology with the signing of the Genius Act,” President Trump remarked.
This new law primarily addresses the stablecoin market, a narrower yet promising segment of the crypto space. It lays the groundwork for additional legislation, with two other crypto-related bills currently making their way through Congress. One bill, in particular, is highly anticipated by the crypto community. The CLARITY Act passed by the House on Thursday, grants the Commodity Futures Trading Commission (CFTC) regulatory authority over the crypto industry. Dubbed “crypto week” by Republican lawmakers, this bill is expected to reshape the way digital currencies are regulated in the U.S. However, critics worry that this shift will result in weaker regulation, potentially allowing for more risky behavior in the financial sector.
The bill now heads to the Senate, where its future remains uncertain. Crypto critics are prepared to vigorously oppose it.
The Vision of Crypto Supporters
For advocates of cryptocurrency, this week was a pivotal moment. Supporters have long argued that digital currencies represent the future of global finance. While acknowledging some unsavory elements in the market, such as meme-based cryptocurrencies, they maintain that crypto has real value.
Stablecoins, for instance, are seen as a safer form of cryptocurrency. They are backed by real-world currencies, such as the dollar or euro, ensuring that each stablecoin is backed by a specific amount of reserve currency. This backing provides a level of security that other cryptocurrencies may lack.
Stablecoin companies see enormous potential, believing that these assets will revolutionize the way money is transferred around the world. Unlike traditional methods, which can involve expensive fees, stablecoins offer the possibility of fast, inexpensive global transactions.
“I believe stablecoins will become the default method for commerce in the next 10 to 20 years,” says Kevin Lehtiniitty, CEO of Borderless, a company facilitating stablecoin payments.
Critics Voice Concerns
Not everyone shares the optimistic view of the crypto sector, however. Critics argue that while the GENIUS Act does include some protections, such as transparency and anti-money laundering measures, the rules are still too weak.
Some point to the heavy lobbying by the crypto industry, which spent over $100 million on Congressional races last year, as evidence that the legislation has been influenced too much by the industry’s interests. “There’s a lot of hype but not much substance,” says Amanda Fischer, policy director at Better Markets, a consumer advocacy group. “This bill doesn’t address the core problems of the financial system and may actually exacerbate them.”
The Role of Stablecoins and Financial Innovation
The stablecoin industry remains steadfast in defending the GENIUS Act, citing its transparency and adherence to banking standards. “This law sets a very clear standard that even large banks would have to follow when issuing stablecoin payments,” says Dante Disparte, chief strategy officer for Circle, one of the largest stablecoin issuers.
Despite concerns, the crypto industry remains confident, with the backing of significant financial resources and powerful political supporters, including President Trump.
The next major goal for the crypto sector is the passage of the CLARITY Act. This bill seeks to shift regulatory authority away from the Securities and Exchange Commission (SEC), which has historically been a major hurdle for the industry. Under President Biden’s administration, the SEC took a hard stance on crypto, pursuing cases against major players like FTX founder Sam Bankman-Fried, who is now serving a lengthy prison sentence.
Crypto advocates argue that digital currencies require a unique regulatory approach, rather than being subject to the same rules that apply to traditional financial institutions.
However, critics warn that loosening regulations could lead to serious risks. “We’re conducting an uncontrolled experiment on our financial system with a technology that hasn’t delivered on its promises,” says Mark Hays of Americans for Financial Reform.
Despite the opposition, the crypto sector remains bullish, moving forward with its ambitious goals following the passage of the GENIUS Act.
