Historic crypto law: What it means
Earlier this month, the United States signed its first major piece of federal cryptocurrency legislation. The GENIUS Act, which establishes new rules for stablecoins (more on those below), passed both the House and Senate before being signed into law by President Trump on July 18.
This marks a significant turning point in tech policy. After years of regulatory ambiguity and high-profile collapses, like FTX, the crypto industry is now operating in a more favorable political climate—and seizing the opportunity to advance federal legislation. The GENIUS Act is the first result of that momentum.
This moment stands out not only for the scale of its impact on the crypto sector, but for what it signals more broadly: a new phase in the ongoing debate over how to regulate fast-moving digital technologies in ways that safeguard the public interest while enabling innovation.
The week this law passed was dubbed “Crypto Week” in Washington, with multiple bills introduced and debated. The implications extend far beyond stablecoins.
Let’s take a closer look.
// Crypto Week & The GENIUS Act
There were three bills making their way through Congress during “Crypto Week.” Only one, the GENIUS Act, has become law.
The GENIUS Act: The GENIUS Act is the first comprehensive federal framework for stablecoin regulation.
- What are stablecoins? Stablecoins are digital assets designed to maintain a stable value by being pegged to a reserve asset like the U.S. dollar. The NPR Planet Money podcast described it like this: “Stablecoins are like the chips you get in a casino. Say you pay the cashier $100 and you get $100 in chips to gamble. Once you are done, you return whatever chips you have gained—or have left—and get the corresponding amount from the casino.” But unlike casino chips, stablecoins can be used for international payments, online commerce, and as a bridge between traditional banking and cryptocurrency markets. This makes them a useful currency in our digital economy.
- What does the GENIUS Act do? The Act creates guardrails and consumer protections for stablecoins. It mandates that for every stablecoin in circulation, the issuer of that coin must hold an equivalent amount of safe assets (such as U.S. dollars or Treasury bills). It also provides substantial additional consumer protections for stablecoin holders.
The CLARITY Act: Passed by the U.S. House and awaiting Senate consideration, the CLARITY Act would transfer certain oversight of cryptocurrency from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). The CFTC, which governs commodities, typically offers more flexible trading rules, particularly when compared to the strict approach taken by the SEC under the Biden administration. This Act seeks to create a more defined regulatory framework for digital assets.
Anti-CBDC Surveillance State Act: The Anti-CBDC Surveillance State Act is designed to block the development, issuance, and use of a U.S. central bank digital currency (CBDC) like a digital U.S. dollar. This act was largely symbolic as the U.S. doesn’t have immediate plans to create a digital dollar (and, the Fed has noted that doing so would require authorization from Congress). Proponents of this bill argued that a central bank digital currency would enable the government to conduct surveillance on its citizens. In contrast to its peers in Brussels and Beijing, policymakers in Washington are opting to regulate existing stablecoins rather than creating a digital state-backed currency.
These three bills, taken together, reveal how Congress is addressing the broader challenge of regulating emerging digital technologies.
// The tech policy implications
The three crypto bills currently making their way through Congress will not be the last.
Faced with digital currencies that are quickly going mainstream, future Congresses will need to grapple with common challenges found in other emerging technologies like social media and now AI:
- How should we strike a balance between consumer protections and private-sector innovation?
- How should national policies drive or hinder competitiveness on the international stage?
The recent crypto bills raise these broader questions and others. Here are a few implications:
Consumer protections
As cryptocurrencies and stablecoins gain adoption, consumer protection is a critical topic. While some crypto critics argue that “lighter” regulation could lead to consumers holding the bag for increased industry risk-taking, others note that the form factor matters, and that products like ETFs and stablecoins (as regulated under GENIUS) are very unlikely to significantly increase either systemic or individual consumer risk.
Geopolitics
Today’s geopolitical dynamics are increasingly defined along technological lines: from AI to digital currencies, such as stablecoins. President Trump has stated that he wants the U.S. to be “the crypto capital of the world.” The GENIUS Act has implications for global monetary policy and reserve currencies.
- The EU: In 2023, the EU passed the Markets in Crypto-Assets Regulation to regulate digital currencies and stablecoins. It is now considering the launch of a digital Euro.
- China: China has its own Central Bank Digital Currency, the Digital Yuan, which was first issued in 2021.
This international competition and its implications for global monetary policies help explain why industry leaders view the GENIUS Act as a pivotal moment for further legitimizing digital assets in America.
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