After numerous false starts and regulatory challenges, the future of cryptocurrency in the United States could be revitalized by a seemingly straightforward concept: a stable digital dollar that maintains a consistent value. Stablecoins, which are cryptocurrencies tied to the U.S. dollar, have emerged as a focal point in Washington’s new strategy regarding digital assets. With former President Donald Trump now openly supporting cryptocurrency and bipartisan support gaining traction in Congress, lawmakers find themselves with a unique opportunity to enact significant crypto regulation. However, industry experts caution that any delay or excessive ambition could jeopardize this limited opportunity.
The Future of Finance: Regulatory Challenges and Opportunities
This perspective was shared during a TIME100 Talks session titled “The Future of Finance: Can Regulation Power Innovation?” where key figures from the cryptocurrency sector convened on April 26, just prior to the White House Correspondents’ Dinner. The discussion focused on the ongoing debate over the regulation of digital assets, which has the potential to influence the financial landscape and economic development for years to come. The panel was led by TIME technology correspondent Andrew R. Chow and included influential voices such as Dante Disparte, chief strategy officer at Circle, acting Commodity Futures Trading Commission (CFTC) chair Caroline Pham, former Federal Deposit Insurance Corporation (FDIC) chair Jelena McWilliams, and Carole House, a former adviser on the White House National Security Council.
The panelists reached a consensus that a narrowly focused bill regulating stablecoins could solidify the U.S. dollar’s position in an increasingly digital world. They emphasized the importance of passing stablecoin legislation without getting sidetracked by broader discussions on crypto market structure. “Having worked in the Senate on many legislative efforts, it’s hard to get a bill passed,” McWilliams noted with a touch of humor. “You achieve what you can, and you call that a win.”
Despite the general agreement on the matter, the path to effective regulation is fraught with challenges. Recent reports have highlighted efforts by certain crypto firms and lobbyists to link stablecoin legislation with more complex market structure proposals—an approach the panelists seemed to reject. “It would be a grave error to try to bundle stablecoins with market structure regulations,” Disparte warned. “Such a move would deprive the President of a bipartisan legislative achievement… The stablecoin bill is ready for passage, and the President seeks it on his desk for signature. There’s a chance to accomplish this before the summer break, and there’s a compelling national security reason to get it right.”
There appears to be a mounting enthusiasm surrounding cryptocurrency in Washington. Trump, who once dismissed Bitcoin as a “scam,” has now embraced the sector, which in turn has shown support for him. During the ongoing 2024 election cycle, crypto enterprises and their leaders have contributed substantial funds to political campaigns, facilitating the emergence of a Congress more receptive to digital assets. Trump recently expressed his hopes to enact stablecoin legislation by August, and both the House and Senate have advanced bills—the STABLE Act and the GENIUS Act—out of committee, laying the groundwork for potentially landmark crypto legislation in the United States.
Understanding Stablecoins and Their Significance
At their core, stablecoins are digital tokens linked to traditional fiat currencies like the U.S. dollar, intended to provide the benefits of cryptocurrency, such as speed and accessibility, while avoiding the volatility associated with assets like Bitcoin or Ethereum. The stablecoin market has expanded significantly, now valued at $238 billion, up from $152 billion a year prior, and is increasingly utilized for a variety of applications, including international payments and decentralized finance. Proponents argue that stablecoins could enhance the dollar’s international standing, offer support to countries grappling with inflation, and modernize the U.S. financial system. “The essential question here isn’t the means, but rather the outcomes and the ultimate rewards,” Pham stated. “The reward is effective regulation. The notion that we can have a financial system without regulations is absurd.”
The discussion highlighted that regulating stablecoins is not merely an innovation issue; it encompasses broader themes of financial stability, national security, and global competitiveness. “We must ensure instant payments that match the speed of the Internet and human necessity,” Disparte emphasized. “Domestically, the process of transferring money quickly is a significant challenge.” House concurred, asserting that the moment to take action is now, pointing out that stablecoin discussions have taken place across three consecutive Congresses, each time hindered by political divides and industry conflicts. “This represents the low-hanging fruit,” she stated. “I’m thrilled that we’re finally making progress, but I believe it would be a mistake to combine both bills.”
Nevertheless, not all aspects of the proposed bills inspire confidence. Certain panelists voiced concerns regarding a clause in the Senate’s GENIUS Act, which would permit foreign stablecoin issuers to apply for U.S. licenses directly through the Treasury Department, bypassing the stringent oversight that domestic firms face. This could potentially allow major international players like Tether—whose opaque practices and regulatory issues have raised red flags among U.S. officials—to operate more freely. When prompted by Chow about this issue, Disparte cautioned that allowing foreign issuers to function under looser regulations could undermine trust in U.S. dollar-backed assets. “I cannot manufacture a car without airbags and then release it in the United States without adhering to our safety standards,” he remarked. “What incentive would there be to remain in the U.S. if a bill permits offshore issuers unrestricted access to the U.S. banking system? Wouldn’t it be beneficial if more of this largely nebulous industry established a presence in the U.S.? Counterfeiting the U.S. dollar should not be permissible anywhere in the world without being held accountable to U.S. law and competitiveness.”
House also underscored the risks of creating an uneven playing field for domestic companies, warning that if Congress allows offshore stablecoin issuers easier access compared to U.S. firms, it would not foster genuine competitiveness for American markets. Yet, political complexities remain. Trump’s increasing involvement in the crypto sector, including the introduction of a Trump-branded stablecoin through World Liberty Financial, has raised ethical questions. Critics argue that Trump’s financial interests in a market he is attempting to regulate could complicate legislative efforts or politicize them.
Pham, who was appointed as CFTC commissioner by former President Joe Biden and later designated as acting chair by Trump, observed that the current Administration has significantly increased its focus on cryptocurrency. “The previous Administration was largely skeptical of the crypto sector, if not outright antagonistic,” she noted. In contrast, she praised the Trump Administration’s willingness to engage, citing the first-ever White House Crypto Summit held last month—just a day after Trump signed an Executive Order establishing a “Strategic Bitcoin Reserve.” “It was unprecedented to be in a room with these new market participants in an open and welcoming manner, free of stigma,” Pham recalled. She advocated for a regulatory framework based on principles that promotes fair competition and responsible innovation, highlighting that the CFTC has already updated its crypto-related advisories from 2018 to reflect the market’s evolution.
McWilliams, the former FDIC chair, echoed this sentiment, stating, “The crypto revolution, or cryptopalooza, is here.” She warned that “if you’re not part of the conversation, you’re likely to be left behind.”
TIME100 Talks – The Future of Finance: Can Regulation Power Innovation? was presented by Circle.
