The result: a shifting regulatory landscape with clearer rules, bigger stakes, and a new test for capital allocators navigating the post-Crypto Week era.
Three crucial bills were passed by the House of Representatives: the GENIUS Act, CLARITY Act, and the Anti-CBDC Surveillance State Act. Each of these Acts will likely increase the mainstream adoption of crypto, providing clearer regulations and oversight in an area of ever-present uncertainty.
The GENIUS Act (S. 1582)
The GENIUS Act is the first comprehensive federal framework regulating US payment stablecoins.
It places regulatory oversight of payment stablecoins with banking regulators — not SEC or CFTC. The Act explicitly provides that GENIUS — compliant payment stablecoins will not be treated as a regulated investment security (meaning there is no requirement to register with the Securities and Exchange Commission (SEC)) or as a commodity (which, in certain situations, may come under the oversight of the Commodity Futures Trading Commission (CFTC)).
The Act also requires that approved issuers hold fully backed, high quality liquid reserves (on a one-to-one basis), submit to regular audits and disclosures, and adhere to both federal/state supervision and AML/KYC rules.
What are the main implications of the GENIUS Act for the crypto sector?
- Regulatory clarity and legal certainty: The Act provides a clear legal framework for issuing and operating stablecoins, reducing ambiguity around whether they fall under securities or commodities regulations.
- Market legitimacy and institutional trust: By establishing federal oversight and strict reserve requirements, stablecoins issued under this framework could gain greater acceptance among banks, payment processors, and institutional investors. It could pave the way for mainstream adoption of crypto payment systems. Yet requirements for 1:1 fully backed reserves, regular audits, and federal/state oversight can be costly and resource-intensive, especially for startups or small issuers. Only larger, more established players may be able to compete.
- Competitive advantage and growth: This Act may foster growth of US-based Stablecoins, reducing reliance on offshore options like Tether (USDT), but DeFi protocols that rely on uncollateralized or offshore stablecoins might struggle if liquidity migrates toward regulated stablecoins under this Act.
Currently the GENIUS Act is the only Act from Crypto Week that has been signed into law. The passing of this Act is likely to have a significant impact on the US’s global influence in the crypto industry. In sum, for well-funded crypto companies aiming to build trusted, institutional-grade stablecoins, the GENIUS Act will likely have a positive impact, as it legitimizes the industry and encourages mainstream adoption. However, for smaller players and innovative models, the Act could pose barriers and potentially squeeze them out of the market.
The CLARITY Act (H.R.3633)
The CLARITY Act aims to provide a clear regulatory framework for “digital commodities”, defined by the bill as “digital assets that rely upon a blockchain for their value”. This Act builds on the principles of the earlier Financial Innovation and Technology for the 21st Century Act, which is viewed as the House’s principal crypto market structure legislation.
The Act provides primary oversight to the CFTC for spot trading, and mandates registration and transparency standards for exchanges, brokers, and dealers, while granting limited exemptions for issuers operating on mature blockchains.
What are the main implications of the CLARITY Act for the crypto sector?
- The Act draws a clear line between digital commodities (CFTC) and securities (SEC), removing much of the uncertainty that has led to lawsuits and enforcement actions. Oversight under the CFTC is generally considered less restrictive and more business-friendly than SEC regulation, particularly regarding compliance and disclosure requirements.
- Crypto exchanges, brokers, and dealers that comply with CFTC registration can operate legally without fear of being targeted for listing tokens mistakenly treated as securities.
- Companies that act as exchanges, brokers, or dealers must register with the CFTC and meet transparency and reporting requirements, which may create cost and operational burdens, especially for startups.
- Tokens that do not qualify as “digital commodities” or do not operate on “mature blockchains” could still face SEC scrutiny, potentially limiting new token launches or innovative models.
If signed into law, the CLARITY Act, would be an overall positive for major crypto companies and established tokens as it provides regulatory certainty, shifts oversight to a more crypto-friendly agency (CFTC), and fosters market stability. However, smaller or experimental projects could face compliance challenges and barriers to entry, particularly if they do not fit neatly into the “digital commodity” category.
The Anti-CBDC Surveillance State Act (H.R. 1919)
The Anti-CBDC Surveillance State Act, prohibits the Federal Reserve from issuing a US central bank digital currency, maintaining accounts for individuals, or using such a CBDC in monetary policy.
Although this bill passed through the House of Representatives, it did so more narrowly than either the GENIUS or CLARITY Act.
If the Anti-CBDC Surveillance State Act passes the senate and is signed into law, it would make the USA is the first country to have banned a CBDC.
What are the main implications of the Anti-CBDC Surveillance State Act for the crypto sector?
- By blocking the Federal Reserve from creating a central bank digital currency, the Act ensures that private and decentralized cryptocurrencies (e.g., Bitcoin, Ethereum) will not have to compete directly with a government-backed digital currency with potentially unlimited resources and legal privileges.
- The Act is framed around preventing a “surveillance state”, which aligns with the ethos of many crypto companies that prioritize user privacy.
- The Act reduces uncertainty about the government’s immediate entry into the digital asset space.
- A S. CBDC could have increased mainstream acceptance of digital assets by educating consumers and providing infrastructure that would benefit the wider crypto ecosystem. By blocking CBDC development, the U.S. may fall behind other countries (e.g., China’s digital yuan), potentially reducing global competitiveness in digital payments.
- A U.S.-backed CBDC could have bridged trust gaps with institutional players, accelerating crypto adoption. Without it, banks and major financial institutions may remain cautious toward blockchain-based payments.
The Act could be deemed a win for decentralized cryptocurrencies and private stablecoin issuers, as it prevents a government-backed competitor and reinforces a free-market approach to digital money. However, it also rejects the potential gains to be made from a US CBDC, including broader adoption, technical infrastructure improvements, and global competitiveness in digital payments.
Sparking asset growth
It would be difficult to not relate the recent growth in the crypto market to this legislative agenda. The price of ETH rose that Friday to an intraday high of $3675.60, the greatest for the cryptocurrency since Jan 7, after increasing more than 19% over the last week, as did other cryptocurrencies including XRP (up 22.8%), BNB (5.8%), SOL (8.5%), TRX (7.7%) and the meme token DOGE (11.4%), that reached a pinnacle this week near a three-month high of just over 25 cents. This increase in market investment and interest is unlikely to be a coincidence and shows how responsive the crypto market is to clear developments in regulation.
Looking forward
Further developments are likely to come in the next few weeks as the Senate continues to negotiate on these proposals. We would also expect to see activity from mainstream financial institutions who feel more confident and empowered to provide crypto-related products and services to their clients.
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