Crypto regulatory reform in the United States faces significant delays, potentially stalling until 2029 elections due to Congressional resistance and political disagreements. Prominent crypto lawyer John Deaton warns that the stalled GENIUS Act, a bill aimed at establishing stablecoin regulations, is caught in a legislative stalemate. Senator Elizabeth Warren and other progressives express concerns about the bill enabling undue influence and corruption linked to former President Trump and associated entities.
The GENIUS Act, recently revised to restrict major tech firms like Meta from issuing stablecoins without special approval, is scheduled for a critical Senate vote. Despite adjustments, opposition remains strong, fueled by fears of loopholes and regulatory weaknesses.
Without clear legislation, U.S.-based stablecoins such as USDC and USDP face ongoing regulatory uncertainty. This situation risks dampening institutional participation and could lead to the U.S. losing its leadership in crypto innovation to other countries. Indirectly, major cryptocurrencies like BTC and ETH may also experience negative effects due to this regulatory impasse.
Financial implications include reduced trading volumes and a weakening influence of the U.S. dollar in the global digital asset market. Past legislative gridlocks have historically led to stagnation in digital asset growth and limited market participation. Experts highlight the risk that U.S. crypto adoption may fall behind international developments without timely reforms.
Industry voices emphasize that passing the GENIUS Act is a crucial step toward modernizing U.S. financial infrastructure and providing legal certainty for stablecoin issuers, which are foundational to the $3.3 trillion crypto market. Failure to secure this legislation could prolong legal uncertainty and hamper market growth.