Three Bills of Legislative Clarity: Can the U.S. Become the Crypto Regulation Leader?

VARA was the best regulation of digital assets, but what if now it's the U.S.?

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As Bitcoin went up above $120,000 during this week, three pro-crypto bills were passed the other day - on July 16th. 

The reason as to why they are so important is because they give clarity to digital asset regulation.

The bills include:

• The GENIUS Act.
• The CLARITY Act.
• The Anti-CBDC Surveillance State Act.

These acts are heavily in favor of cryptocurrency adoption.

In this blog, we will go over the details of each of the above-mentioned bills, what this means for the future of crypto regulation in the U.S., and if the country will become a legislative giant for digital assets.

The Three Passed Acts Explained

Let’s dive into the details of each bill and what they stand for.

The GENIUS Act

The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act passed the House with overwhelming support in a 308-122 vote. This legislation establishes the first comprehensive federal regulatory framework for stablecoins, which is a huge win. The market has grown to over $250 billion this year.

This bill specifically prevents the SEC from classifying stablecoins as securities. Instead, it treats them like payment tools.

Some of the most important parts of the GENIUS Act include the following:

• The people who make stablecoins have to back their coins with cash, like U.S. dollars and short-term Treasury bills.
• Public disclosure of reserve compositions every month to maintain accountability.
• Comprehensive AML rules to address worries about illicit use.
• Companies can choose between federal and state regulatory systems, as long as state laws are largely the same.

However, let’s get down to the details of it.

Capital Requirements and Reserve Mechanisms

Under the GENIUS Act, federal and state regulators must establish individual capital requirements for Payment Stablecoin Issuers (PPSI), tailored to each issuer's business model and risk profile. Importantly, capital requirements shall not exceed standards sufficient to ensure ongoing operations of PPSI, and the Collins Amendment from the Dodd-Frank Act will not apply to capital standards for PPSI.

Threshold Values and Oversight

Stablecoin issuers with less than $10 billion in outstanding stablecoins may operate under state regulation, but issuers exceeding this threshold must transition to federal oversight unless they receive special permission.

Reserve Composition and Auditing Requirements

The GENIUS Act mandates that stablecoin issuers maintain identifiable reserves backing issued stablecoins at least on a 1:1 basis. These reserves are limited to high-quality short-term assets including:

• U.S. cash and currency and balances held at a Federal Reserve Bank
• Funds held as demand deposits at insured depository institutions
• Short-term Treasury bills, notes or bonds with remaining maturity of 93 days or less
• Money received under repurchase agreements on short-term Treasuries
• Securities issued by registered investment companies or government money market funds

Transparency and Reporting Standards

Stablecoin issuers must provide monthly reserve reports with CEO/CFO certification and accounting firm examination. For issuers over $50 billion, they must also publish audited financials and disclose related-party deals annually. The Basel Committee on Banking Supervision requires that the composition and value of reserve assets be disclosed at least daily, and the composition must be disclosed at least weekly, with this information verified by an independent third party at least semi-annually.

Compliance and Penalties

Non-compliance brings severe penalties: criminal penalties for false certifications, civil fines up to $100,000 per day for various violations, and potential license revocation for large issuers. Marketing breaches can result in fines up to $500,000 per violation.

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The CLARITY Act

The Digital Asset Market Clarity Act passed the House with strong support in a 294-134 vote, which is yet another significant victory.. It addresses one of the most important issues in crypto regulation - finally addressing whether digital assets are securities or commodities.

The CLARITY Act establishes clear jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), establishing regulatory clarity - which is in the name.

Under this framework:

• SEC Jurisdiction handles tokens deemed as securities, particularly those offered as investment contracts in primary markets.
• CFTC Oversight regulates digital commodities and their trading platforms.
• Creates a mechanism for tokens that begin as securities to transition to commodity status once they achieve sufficient decentralization.

Perhaps most importantly, the CLARITY Act introduces a new capital-raising exemption that allows digital asset projects to raise up to $75 million annually under disclosure requirements, provided their blockchain aims to become decentralized. This provision could unlock significant innovation in the American digital asset space.

The legislation also includes important protections for individual users, guaranteeing the right to self-custody digital assets without requiring intermediaries. It also speaks on the concern over government overreach while keeping the decentralized ethos that underpins the cryptocurrency movement.

Here are the details:

Defining Sufficient Decentralization

The CLARITY Act introduces the concept of a "mature blockchain system" as the standard for determining sufficient decentralization. A mature blockchain system must meet specific criteria:

• Independence from control: The network must operate independently from any single company or issuer.
• Broad validator distribution: There must be a wide distribution of validators or miners.
• Public accessibility: Source code and transaction history must be publicly available.
• Reliable operation: The network must reliably function for its intended use.

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Token Transition Mechanism

The CLARITY Act establishes a clear jurisdictional framework between the SEC and CFTC while creating a mechanism for tokens that begin as securities to transition to commodity status once they achieve sufficient decentralization. Issuers or sponsors can certify to the SEC that their network has achieved maturity by meeting specific decentralization criteria. Projects have 4 years to achieve maturity after using SEC exemptions, and failure to meet decentralization timelines may result in loss of exemptions.

Certification Process and Timeframes

Digital asset projects can raise up to $75 million annually under disclosure requirements, provided their blockchain aims to become decentralized. The SEC and CFTC must complete joint rulemaking within 180 days after CLARITY Act enactment. The GENIUS Act will take effect either 18 months after passage or 120 days after final regulations are issued  - whichever comes first.

Self-Custody Rights Protection

The law includes important protections for individual users, guaranteeing the right to self-custody digital assets without requiring intermediaries. This protection keeps the decentralized ethos that underpins the cryptocurrency movement while stopping government overreach.

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The Anti-CBDC Surveillance State Act

The third of America's crypto legislative framework is the Anti-CBDC Surveillance State Act, which passed the House in a closer 219-217 vote. This is a very important piece of legislation that was much needed due to years of concerns about the issue of CBDCs. This legislation, championed by House Majority Whip Tom Emmer, takes a strong stance against government-issued digital currencies that could enable surveillance of American citizens.

The Anti-CBDC Act includes comprehensive prohibitions:

• Prevents the Federal Reserve from offering digital currency products directly to individuals.
• Blocks the Fed from issuing CBDCs through third-party intermediaries.
• Prohibits using CBDCs as tools for implementing monetary policy.
• Ensuring any future CBDC development requires explicit Congressional approval and authorization.

The White House has very strongly endorsed this legislation, with the administration stating that "the United States will never allow the creation of a central bank digital currency (CBDC) that could be used to surveil, control, or deplatform American citizens". That is pretty open support.

Challenges and Criticisms

Despite the overwhelming support from the industry and community, the laws still received criticism. Democratic lawmakers, led by Senator Elizabeth Warren, have voiced concerns about the acts’ potential to enable more corruption and insufficient consumer protections. They say that the regulatory framework is way too permissive and does not properly address risks involved in cryptocurrency and DeFi.

Some worry that the law prioritizes industry interests over public safety. Corey Frayer of the Consumer Federation of America argued that "the purpose of the bill is to give them the veil of regulation" rather than meaningful oversight.

While the GENIUS Act received significant support, the CLARITY Act and the Anti-CBDC Act didn’t receive as much. This suggests that there could be some future regulatory changes to them in the future, although this is purely speculative.

Market & Industry Response

The overall market response has been overwhelmingly positive.

Bitcoin reached multiple all-time highs during Crypto Week, peaking at over $120,000 as investors bet on favorable regulatory outcomes. The broader cryptocurrency market has surged to a total capitalization of $3.8 trillion, with Ethereum ETFs experiencing their largest single-day inflow of 2025 at $1.18 billion.

Circle CEO Dante Disparte called the GENIUS Act passage "a landmark moment for the future of currency and the online financial ecosystem," while Blockchain Association CEO Summer Mersinger described it as "a historic milestone for digital assets in the U.S.". The industry support is undeniably positive.

Furthermore, the U.S. banking sector has shown increasingly positive sentiment toward crypto regulation. Federal banking regulators (FDIC, Federal Reserve, OCC) have withdrawn previous restrictive statements on crypto assets, giving banks more freedom to engage with digital assets without prior approval. The OCC confirmed that banks can engage in crypto-asset custody, stablecoin activities, and participation in distributed ledger networks.

On top of that, legal experts have noted that the regulatory landscape is shifting from "regulation by enforcement" to crafting clearer rules for digital assets. Financial regulators are now moving towards a constructive relationship with the crypto industry to promulgate complete rules that facilitate crypto-asset-related services.

The long-term consequences extend beyond immediate market gains. This level of regulatory clarity can increase more institutional adoption, with many TradFi institutions now expressing interest to join the market. This can establish the USA as a leader for digital asset regulation, due to its leniency.

Market Forecasts and Growth Projections

Stablecoin Market Projections

While some analysts previously projected the stablecoin market could hit $1-2 trillion by 2028, JPMorgan has provided a more conservative forecast of $500 billion by 2028. The bank stated that approximately 88% of current stablecoin demand comes from crypto-native activities, with payments accounting for only 6% of usage.

However, Standard Chartered had earlier projected the stablecoin market could hit $2 trillion by 2028 following the passage of the GENIUS Act. The regulatory clarity offered by these bills could be a significant catalyst for growth.

Current Market Size

The total USD-pegged stablecoin volume exceeded $236 billion as of May 2025, up almost 40% since November 2024. As of July, Tether and Circle hold almost 90% of sector assets ($152 billion and $60 billion respectively).

Global Regulatory Comparison: U.S. vs. MiCA vs. VARA

Quick US vs MiCA (EU) Comparison

The U.S. approach offers significantly more flexibility compared to the EU's Markets in Crypto-Assets (MiCA) regulation. While MiCA imposes strict requirements including substantial capital requirements and comprehensive risk management frameworks, the American system prioritizes decentralization and self-custody rights.

Differences:

• US: More flexible approach prioritizing decentralization and self-custody rights
• EU (MiCA): Stricter requirements with comprehensive risk management frameworks, became effective December 30, 2024

UAE (VARA) Comparison

VARA is the world's first independent regulator focused exclusively on virtual assets, established under Dubai Law No. 4 of 2022. All Virtual Asset Service Providers must obtain VARA licensing with mandatory compliance with AML, KYC, governance, and cybersecurity standards.

Non-Compliance Penalties:

• Fines for AML violations: from 100,000 to 5 million UAE dirhams (approximately $27,000 - $1.3 million)
• Possible imprisonment for responsible persons

For context, unlicensed crypto exchange operations contributed to $940 million in global penalties in 2024.

More on US Regulation vs MiCA

The passage of these bills positions the United States in direct competition with the European Union's MiCA regulation.

While both frameworks aim to provide regulatory clarity, they take completely different approaches - one lenient and the other one strict.

The EU's MiCA regulation imposes quite strict requirements on crypto companies, including substantial capital requirements and comprehensive risk management frameworks. This approach prioritizes consumer protection and financial stability but has been criticized by some as potentially stifling innovation.

In contrast, the U.S. framework is much more lenient towards decentralization and innovation, all while still retaining consumer protection. The American approach allows for more flexible regulatory pathways and explicitly protects individual rights to self-custody digital assets.

The stakes in this regulatory competition are enormous. The global stablecoin market has grown to over $250 billion, with U.S. dollar-denominated stablecoins accounting for 99% of the market. The passage of clear American regulatory frameworks could further cement the dollar's dominance in the digital asset space, potentially creating what some analysts call "cryptomercantilism".

Licensing and Compliance Considerations

Timeframes for Licensing and Permits

The cryptocurrency licensing process varies significantly by jurisdiction:

• EU (MiCA): 3-6 months
• Singapore: 4-6 months
• Dubai (VARA): 3-6 months
• Switzerland: 4-8 months
• USA: 6-12 months (federal + state)

Company Relocation Examples

Several major crypto companies have announced relocation plans due to regulatory clarity:

• Coinbase: CEO Brian Armstrong has had talks in the UK and UAE for potential expansion.
• Ripple: Expanding in Dubai with 20% of customers in the MENA region.
• Binance: Maintains offices in multiple countries for regulatory compliance.
• Nexo: Completed an 18-month withdrawal from the U.S. and established new headquarters in Dubai.

Global Regulatory Competition and Future Implications

Stakes in Regulatory Competition

The competition between U.S. and EU approaches has enormous implications. The U.S. framework offers more flexibility and explicitly protects individual rights to self-custody digital assets, while the EU's MiCA regulation imposes stricter requirements but has been criticized for potentially stifling innovation.

Crypto-Mercantilism

Some analysts call this phenomenon "crypto-mercantilism" - the U.S. attempt to use regulatory advantages to attract crypto business and maintain financial dominance. The global stablecoin market has grown to over $250 billion, with USD-denominated stablecoins accounting for 99% of the market.

Future Trends

According to PwC's 2025 Global Crypto Regulation Report, the U.S. is shifting from "regulation by enforcement" to crafting clearer rules for digital assets, while Asian financial centers are stepping up their crypto frameworks to foster growth while managing risks.

Does This Mean That the U.S. is Now a Crypto Regulatory Leader?

Potentially, yes.

These three bills have positioned the United States as a strong contender for being a global cryptocurrency regulatory leader. All this new regulatory framework is quite a shift from the previous "regulation by enforcement" approach to a more structured, lenient, and crypto-friendly system.

The U.S. approach offers more flexibility and pro-crypto policies compared to the EU's Markets in Crypto-Assets (MiCA) regulation, which is viewed as more restrictive. While MiCA imposes strict requirements (with the necessary risk management), the American system prioritizes decentralization and self-custody rights.

The GENIUS Act is a significant head start to managing the stablecoin market, for example. It makes the USA already be ahead of other regulations because of its friendliness to digital asset innovation.

Perhaps the EU will follow the same way with its legislation, or respond with even more restrictions. Only time will tell.

How is the Cryptocurrency Regulation Landscape Now?

The whole cryptocurrency regulatory landscape now can be said to be very competitive between major jurisdictions. Different regions are taking varied approaches, so we may even potentially see certain businesses relocating to fit the needs of their services.

VARA (Virtual Assets Regulatory Authority) was widely considered the best crypto regulation because it was the world's first independent regulator focused exclusively on virtual assets, and it was balanced between innovation and investor protection.

The U.S. is certainly at the forefront of digital asset regulation, as there have been restrictive legislations that the public was used to - so this leniency and acceptance looks like a breakthrough.

That being said, most countries seem to be heading towards adopting supportive crypto regulations, rather than restrictive. As an example, countries like Vietnam, Thailand, and the UAE are rapidly developing their own cryptocurrency regulations. 

What This Means for Different Stakeholders

For Institutional Investors:

• Regulatory certainty enables faster innovation and institutional capital flows
• Clear jurisdictional boundaries between SEC and CFTC reduce compliance uncertainty

For Startups:

• New $75 million annual fundraising exemption under CLARITY Act provides clearer capital-raising pathways
• 4-year transition period allows time to achieve decentralization requirements

For Existing Crypto Companies:

• Compliance checklist includes reserve backing, monthly disclosures, and AML requirements
• Transition periods provide time to adapt to new regulatory frameworks

For DeFi Projects:

• Clear definition of decentralized systems provides pathway from securities to commodities classification
• Protection of self-custody rights maintains core DeFi principles

What This Means for the Future of Cryptocurrency

With the GENIUS Act already having passed the Senate, it heads directly to President Trump's desk for signature, where it is expected to become law quickly. The CLARITY Act and Anti-CBDC Surveillance State Act now face Senate consideration, where their probabilities of full acceptance remain unclear as of right now. 

The success of these bills in the Senate will likely rest on maintaining support and addressing concerns about consumer safety and financial stability. The whole industry, however, is optimistic about it - the three acts received much acceptance in the House, and gave a lot of leniency towards cryptocurrency-based businesses.

Implementation Timeline and Next Steps

Current Status

The GENIUS Act passed the Senate on June 16, 2025, and heads to President Trump's desk. The CLARITY Act and Anti-CBDC Act await Senate consideration. Joint SEC and CFTC rulemaking must be completed within 180 days after CLARITY Act enactment.

Transition Periods

For existing projects, there are specific transition periods to comply with new requirements. The GENIUS Act will take effect either 18 months after passage or 120 days after final regulations are issued - whichever comes first.

Conclusion

The three passed crypto bills are a clear sign of the United States supporting cryptocurrency.

Now, we should see what the response will be from other nations. This will tell us if the U.S. will stay a regulatory leader or not.

These bills certainly stand in contrast to more restrictive regulations like the EU’s MiCA regulation, potentially giving the U.S. a competitive edge in attracting crypto businesses and institutional investment.

With the GENIUS Act providing a stablecoin framework, the CLARITY Act clarifying the respective jurisdictions of the SEC and CFTC, and the Anti-CBDC Surveillance State Act ensuring privacy protections against CBDCs, the U.S. already positions itself as a global leader in crypto regulation.

The U.S. is setting a precedent that could influence global crypto regulatory trends and truly establish itself as the "crypto capital of the world", as it was promised by Trump. This legislation confirms it.

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FAQ

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Is the GENIUS Act in favor of stablecoin adoption?

Yes, the GENIUS Act strongly encourages the use of stablecoins by setting up a clear government legal system that views stablecoins as payment tools rather than securities. This makes it easier for companies in the United States to create and manage stablecoins.

What does the CLARITY Act do?

The CLARITY Act sets up a complete regulatory framework for digital assets. It states whether cryptocurrencies are securities or commodities and gives the SEC and CFTC different roles in overseeing them.

Can the Federal Reserve make CBDCs of their own?

After the Anti-CBDC Surveillance State Act was passed, no. It is prohibited from issuing a central bank digital currency without explicit Congressional authorization. The act prevents both direct and indirect issuance of CBDCs.

Is the U.S. leading the world in cryptocurrency regulation?

Right now, yes. It seems to already be a global leader in crypto-friendly regulation, offering a more innovation-focused approach compared to the EU's MiCA regulation while maintaining consumer protections.

Is the future of digital assets in the U.S. going to be pro-crypto?

It’s very likely. The current regulatory trajectory strongly suggests a pro-crypto future, with the Trump administration's commitment to making America the "crypto capital of the world" and the passage of comprehensive legislation that provides clear regulatory pathways for digital asset innovation.

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Read More:

Building Trust in Crypto Yield: How Robust Security and Risk Management Protect Your Users and Business

Bitcoin as a Strategic Reserve: Implications and Yield Strategies for Corporate Treasuries

Riding the Mainstream Wave: How to Seamlessly Embed Crypto Yield as Digital Payments Expand

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