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Trump is a genius act, first major US cryptography, enforcement
President Donald Trump signed the Genius Act and established the first US cryptography to regulate stable coins.
The US is ultimately moving faster with cryptography, but the actual test is whether it helps to set global rules for digital assets.
The benefits of a first-mover are important. With the adoption of digital currencies by major economies and blocs such as the European Union and China, can first build frameworks, set industry standards and export regulations from around the world.
American companies will face a patchwork of rules that are incompatible with free market principles and privacy protection. The surveillance-driven central bank digital currency (CBDC) model could potentially gain adoption in major regions, as China is promoting. It risks repeating the experience of big technology that is setting a number of rules and spurring tariff threats from the Trump administration.
The EU has already passed MICA, a cryptographic framework for transparency, disclosure and electronic token oversight. In Asia, Singapore, Hong Kong and South Korea are creating subtle policies to attract capital, talent and innovation. The Singapore financial authorities have built a regulatory framework by licensing Stablecoin issuers, launching FinTech and tokenization hubs, and sandboxing such as APIX. Hong Kong is moving forward with a policy statement 2.0 that unifies the licenses of digital asset platforms and stubcoin issuers while expanding tokenized bonds and real-world assets, and South Korea is moving to allow Spot Crypto ETFs and Won-Backed Stablecoins under new market regulations.
China is heading another path, banning retail cryptocurrency trading and sturdy control of digital finance through its CBDC, the digital yuan, while mining nationwide. Crossing the border, Beijing has integrated this model into cross-border trade, promoting the use of digital yuans and promoting payments for services and goods.
The progress of other countries is attributed to regulatory frameworks that will grow a stable economic environment for the industry. Other countries have made progress, but the US has created a uneven playing field for digital assets by granting selective approval in favor of larger financial institutions than small, innovative blockchain companies. Today, financial heavyweights, such as JPMorgan, interactive brokers and other major players, are using custody practices and councils, integrating crypto into services to meet growing customer demand.
A small number of blockchain companies with regulatory clarity continue to walk, as regulatory certainty drives growth. Grayscale, Ripple and Circle have each expanded in the US after acquiring it, indicating that predictable frameworks can elicit investments and innovations. In particular, Ripple benefited from a five-year court battle with the Securities and Exchange Commission, which declared XRP tokens sold on public exchanges. The SEC ultimately dropped the appeal on August 7th, leaving Ripple and XRP with clear legal status. By fully expanding that level of federal clarity, it will strengthen the competitiveness of all US crypto companies and attract new clients, capital and innovation.
The White House’s recent Crypto report expands the Commodity Futures Trading Commission’s powers, enables Stablecoin infrastructure and defines tax treatment, providing a reliable starting point. Legislative proposals like the Genius Act, recently signed into law, and the Clarity Act, which passed the House and awaited the Senate consideration, can formalize the US position on stylization, custody, and tokenization. This will equip businesses to invest in their homes with confidence and compete effectively overseas, but only if Washington gets the rules correctly.
However, this is important if you can’t lead costs.
Regulations should not be seen as constraints, but as a form of infrastructure. When the US takes the lead in financial rules, it exports a framework of trust, liquidity and growth. American-style regulations are clear, fair, innovation-friendly, and importantly rooted in market testing principles.
The US has a unique opportunity to continue to be a global leader in finance in this new digital currency era. With a deep talent pool, world-class technology, a reliable financial system, a stable currency and a growing economy, America is in the most powerful position to lead.
What is lacking is universal political favor to act before rules are written elsewhere. If the US doesn’t set the standard, we risk becoming rule takers in systems that once had the power to lead.
Daniel Zanzalari is an assistant professor of economics at Seton Hall University and a former financial economist at the Federal Reserve Bank of Boston. She frequently researches and writes about banking regulations, financial markets, cryptocurrency and finance.
