Congress has passed the first piece of legislation that regulates cryptocurrencies. This move could have a dramatic effect on financial transactions, such as speeding up the transfer of funds and lowering costs
US cryptocurrencies legislation - a green light for cryptocurrencies?
The cryptocurrency industry has long been outside the mainstream financial system, but that may be about to change. The industry took a dramatic step forward when the US Congress passed two crypto bills in July 2025 which will provide a regulatory framework for cryptocurrencies. This will allow digital assets to be further integrated into the traditional financial system.
Supporters of the legislation are confident that it will enable the US to become the global leader in digital currencies. President Trump, an enthusiastic supporter of cryptocurrencies, has promised to make the US the “crypto capital of the world”.1
Let’s take a brief look at cryptocurrencies before examining the US crypto legislation and its significance.
Cryptocurrencies
A cryptocurrency is a digital currency which uses a computer network that is not based on any central authority, such as a government or central bank, to maintain it. The decentralized system allows businesses and individuals to transact with each other and removes third parties such as banks from financial transactions, which should lower transaction costs.
See also: The Risks of Trading Cryptocurrency
Stablecoins
A stablecoin is a type of cryptocurrency which is designed to maintain a relatively stable price, usually by being pegged to a commodity or currency. Crypto issuers often provide a 1:1 peg with the US dollar.
Through the peg to fiat currencies such as the dollar, stablecoins have less volatility than other types of cryptocurrencies, such as Bitcoin, which are marked by sharp swings in price.
A major selling point of stablecoins is they can offer cheaper and faster transactions than transferring funds through a bank. Tether, which is the most widely used stablecoin, is also one of the most popular cryptocurrencies.
US Congress legislation
The US House of Representatives passed two bipartisan crypto bills in July 2025, the Genius Act and the Clarity Act. Both bills were passed by large majorities and had the support of Republicans and Democrats, indicating solid bipartisan support for the legislation.
The passage of the bills was a milestone for the crypto industry, as Congress signaled that it will regulate crypto transactions.
GENIUS Act
The US Senate passed the GENIUS Act in June 2024, the House followed in July 2025, and the bill has become law. The GENIUS Act (an acronym for Guiding and Establishing National Innovation for U.S. Stablecoins Act) marks the first piece of crypto legislation in the United States.
The act establishes the first comprehensive regulatory framework for the use of stablecoins. Under the act, stablecoins must maintain a 1:1 peg with US dollars or other highly liquid, low-risk assets such as US Treasury Bills. Issuers of crypto coins or tokens are required to disclose publicly the composition of their reserves on a monthly basis. The act thus addresses key issues which are critical for the integration of cryptos in the financial system: liquidity and transparency.
The act is the first step in providing government supervision and consumer protection in the use of cryptocurrencies, as stablecoins will be redeemable on a 1:1 basis for US dollars.
Digital Asset Market Clarity Act
The Digital Asset Market Clarity Act (“Clarity Act”) aims to provide a regulatory framework for determining when a cryptocurrency coin or token is considered a security or a commodity. The distinction is significant as securities are regulated by the Securities Exchange Commission (SEC) while commodities fall under the supervision of the Commodities Futures Trade Commission (CFTC).
The act is an important step in digital asset regulation in the US and removes the regulatory ambiguity in cryptos by providing legal classifications which will provide certainty to both crypto companies and to investors. Under the act, all exchanges, brokers and dealers that provide digital commodities will be required to register with the CFTC or face penalties.
The House of Representatives passed the Clarity Act with strong bipartisan support in July 2025 and must wait for the Senate to release its own version of the bill before it becomes law.
Investors are skeptical about cryptocurrencies
The crypto industry is patting itself on the back after the House passed the GENIUS and Clarity bills in July 2025, and for good reason. Still, the industry has a high hill to climb in order to convince a skeptical US public to invest in cryptos. A Gallup poll in June 2025 reflects this skepticism, finding that only 14% of US adults own crypto, and 60% said they had no interest in ever purchasing cryptos. https://www.baystreet.ca/cryptonews/1112/American-Investors-Still-View-Crypto-As-Risky
Despite the public skepticism, crypto supporters argue that the new crypto legislation will legitimize stablecoins and help make banks, businesses and consumers more comfortable using stablecoins to transfer funds. The US crypto legislation is a dramatic development that will potentially integrate cryptocurrencies in the mainstream financial system.
Footnotes:
1 Fact Sheet, The White House, March 6, 2025
This article is for general information purposes only, not to be considered a recommendation or financial advice. Past performance is not indicative of future results. It is not investment advice or a solution to buy or sell instruments.
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