If you have been following Web3 and cryptocurrency, you must have heard that the United States passed three cryptocurrency bills all at once on July 17. The "Stablecoin Innovation and Regulation Act": addresses compliance issues for stablecoins; The "Digital Asset Market Clarity Act": reshapes the entire structure of the cryptocurrency market; The "Anti-Digital Dollar Surveillance Act": restricts the Federal Reserve from directly issuing CBDCs.
Among them, the "GENIUS Act" has been signed into law by Trump and officially became federal law; the other two will continue to advance in the Senate.
The content of the three bills is not complicated, and the problems they address are quite clear, but explaining them clearly is not an easy task, as they have evolved within a historical context.
For example, the so-called GENIUS Act, if you only look at these contents:
Stablecoins must be 100% backed by US dollars or equivalent assets;
Issuing stablecoins requires a license, whether applying to federal or state regulators;
If the market capitalization exceeds $50 billion, it must undergo independent audits annually;
Foreign stablecoins, if issued to US users, must also comply with US laws.
If you only look at these bill contents, you might conclude that it’s about US dollar hegemony, cryptocurrency hegemony, the US using stablecoins to harvest the world, or that the US wants to resolve its debt crisis through stablecoins, etc. These conclusions are not without merit.
But beyond that, you need to understand that before this legislation, stablecoins were referred to as the biggest landmine in the crypto space. Their size was growing, and the issuing entities were still private companies. Each entity claimed to have a one-to-one reserve of equivalent assets, but both USDT and USDC have faced significant risk issues. Of course, there are even scarier examples like Terra's algorithmic stablecoin UST, a $40 billion stablecoin experiment that vanished in days. Now the market capitalization of stablecoins has reached $250 billion, and it will likely grow even more. Can this be managed without regulation?
Another point worth noting:
What we refer to as "stablecoins" today is not equivalent to "US dollar stablecoins."
You can have yen stablecoins, euro stablecoins, or even ruble stablecoins.
A stablecoin is merely a technical structure; it can be pegged to any fiat currency.
You may not know that when USDC was launched in the US in 2018, the market capitalization of stablecoins was less than $3 billion. Although there were various regulations and intense SEC oversight, overall, they did not stifle cryptocurrency. Now, with cryptocurrency at $4 trillion, if the intention was to harvest the world, why wait until now?
So I believe this is a normal stage of development that was determined from the very beginning.
In the next issue, I will discuss the second bill that I believe is more important—the Clarity Act, which will establish a set of "who regulates whom" rules for the entire cryptocurrency market, including the DeFi, exchanges, and project parties you are familiar with. This may truly be the "Web3 constitutional moment."
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