When the Congress established the Bag and Securities Commission in 1934, it was responding to innumerable failures of an outdated financial system. The regulatory architecture that arose provided the base of almost a century of American financial dominance. Today, Congress faces a comparable moment: the opportunity to modernize the financial infrastructure of the United States for the digital era.
Two pieces of legislation now before the legislators, the Genius Law on Stablecoins and the comprehensive reform of the market structure, represent more than incremental policy adjustments. Together, they constitute the response of the United States to a fundamental change in how money moves all over the world.
Bets are considerable. The Stablecoin market of $ 240 billion, projected to reach $ 3.7 billion by 2030, has become a critical financial infrastructure largely outside the formal regulatory frameworks. Almost all the main stablcoins are voluntarily nailed to the dollar, creating a curious phenomenon: private companies that build elaborated technology to make the US currency work better worldwide than existing payment systems.
This development occurs when the monetary hegemony of the United States faces its most serious challenge in generations. The Yuan digital initiatives of China, BRICS alternative payment systems and the growing reluctance between commercial partners to make dollars indicate a coordinated effort to avoid US financial influence.
Stablecoins offers the most effective response in the United States. They expand accessibility in dollars worldwide, while preserving transparency and the advantages of rules of law that make the US financial system attractive. The genius law would formalize this system, establishing reserve requirements, audit standards and consumer protections that make digital assets supported by dollars safer and more attractive than alternatives.
However, monetary infrastructure alone cannot be sufficient. The current approach to apply the regulations of the twentieth century to the technology of the 21st century has produced predictable results: innovation migrating to jurisdictions with clearer and welcoming rules.
The ruling of the Federal Court of November that annulled the definition of expanded distributor of the SC illustrates the problem. The regulators had stretched the legal language far beyond the original intention that judicial intervention became inevitable.
Digital asset platforms integrate functions that traditional finances deliberately separate, creating new efficiencies along with new risks. Forcing these platforms in regulatory categories designed for different commercial models does not produce clarity or protection. The integral legislation of the market structure would establish registration frames as these companies really correspond to how the cryptographic ecosystem has been defending for years.
The integration imperative here is crucial. American financial supremacy in the twentieth century did not derive from any unique innovation but from systematic coordination through monetary policy, market regulation and institutional supervision. Today’s challenge demands similar coherence. Digital dollar infrastructure without an adequate market structure leaves innovation vulnerable to regulatory uncertainty. The reform of the market structure without the clarity of Stablecoin limits the overall scope of the US monetary policy.
International competition intensifies this urgency. The European Union markets in crypto-active (Mica) The regulation, the United Kingdom framecoin framework and similar initiatives in Asia represent direct challenges for US leadership in financial technology. These frames may not be superior to what the United States could build, but they exist, which is often a decisive advantage to attract investments and global innovation.
In fact, there is another step that American elected officials can take to ensure that the promise of cryptography is not undermined: the legislation of the approval representative Tom Emmer that prohibits the development in the United States of a digital currency of the central bank of the Central Bank (CBDC). While several other countries have discussed such implementation, US legislators should adopt our ideals of domestic privacy and a broad feeling against surveying by supporting this important legislation.
The approval of the 68-30 Senate of the Genius Law suggests a growing political recognition of Crypto’s political power and the realities of international competition. Even skeptical democrats recognize the state of play, with Senator Mark Warner (D.-VA) Recently observing that if US legislators do not shape cryptocurrencies, “others will do so, and not so that they serve our democratic interests or values.”
President Trump’s commitment to sign the legislation before the August recess creates opportunities and deadlines. The Political Foundation seems solid: bipartisan support, consensus of the industry on key principles and competitive pressure that occasionally motivates effective governance.
However, significant obstacles remain. The capacity of the Congress for technical legislation is limited in a heated partisan political climate, and the temptation to pursue a symbolic reform instead of systematic feels strong. The complexity of the integration of the regulation of the stable with the reform of the broader market structure requires precisely the type of patient and coordinated policies that US policy sometimes struggles to produce.
The election facing Congress is ultimately direct: leading the development of global digital finance infrastructure or giving that role to competitors. For the first time in years, economic logic, political impulse and strategic need are aligned. If US legislators can capitalize on this convergence, they will determine not only the destiny of cryptocurrency regulation, but the role of the United States in the next generation of global finance.
The regulatory framework of the 1930s served the United States well for almost a century. Your digital successor, if properly built, could serve even more.
