From Uncertainty to Dominance - “Crypto Week” in D.C. - Stablecoins, CLARITY, and Anti-CBDC Bills
VeradiVerdict - Issue #335
Summary
The GENIUS Act, signed into law, establishes unified standards for stablecoin issuance and reserves.
The CLARITY Act, passed by the House, defines SEC and CFTC oversight for digital assets and allows for a migration path from SEC to CFTC jurisdiction.
The Anti-CBDC Provision, included in the NDAA, prohibits the Federal Reserve from issuing a centralized digital dollar without Congressional approval, promoting decentralized solutions.
Brendan Smialowski/AFP via Getty Images
What Happened
Last week we saw historic movement in U.S. crypto policy as lawmakers advanced several landmark bills during what Congress dubbed "Crypto Week." President Trump signed the GENIUS Act into law on July 19. The news immediately lifted market sentiment, pushing crypto’s total market cap past $4 trillion for the first time and driving stablecoin issuance to a new high of $261 billion. The Act sets a unified standard for stablecoins, prompting the immediate pilot announcements from financial giants like JPMorgan, Bank of America, PayPal, and Stripe. The clarity in crypto regulation has reduced uncertainty, enabling institutional investors to deploy previously sidelined capital, large banks to enter the stablecoin market compliantly and users to transact privately. The bill positions crypto firmly as a core pillar of the next-generation financial internet and the United States as the "crypto capital" of the world.
After months of debate, the CLARITY Act, which establishes clear guidelines differentiating SEC and CFTC oversight for digital assets, secured bipartisan approval in the House and is now headed swiftly toward the Senate for consideration. The Anti-CBDC provision also cleared a major hurdle by inclusion in the National Defense Authorization Act, prohibiting the Federal Reserve from issuing a centralized digital dollar without explicit Congressional approval.
It is an exciting time for crypto! Let’s break down the GENIUS Act, CLARITY Act, and Anti-CBDC provision, and why these developments matter for the industry.
GENIUS Act
On 19 May, the Senate voted 66‑32 to invoke cloture on the GENIUS Act. On July 17, the US Congress sent it to President Trump’s desk. On July 19, the President signed it into law.
What is the GENIUS Act
The GENIUS Act addresses who can issue a payment stablecoin and outlines the instruments qualified to be the stablecoin’s reserve. The Act changed the market’s view on stablecoins: from mere tradeable opportunities into institutional‑grade payment rails. Stablecoins enables banks and fintechs to deploy them as true programmable dollars that settle in seconds and clear 24/7. We believe this unlocks value across the value chain from machine payments to cross‑border trade, all while keeping global dollar liquidity on ledgers ultimately checked by U.S. regulators. This results in deeper market liquidity, lower settlement friction, and a stronger dollar in the global markets.
A compliant issuer is either (i) a federally regulated bank, (ii) an OCC‑licensed non‑bank stablecoin issuer, or (iii) a state‑chartered issuer whose aggregate stablecoins in circulation do not exceed US $10 billion in market capitalization.
The reserve must be equal to or greater than the total face value of all stablecoins outstanding.
Eligible reserve instruments are U.S. dollars held as cash, demand deposits or insured shares at insured depository institutions, treasury bills maturing in 93 days or less, and overnight reverse‑repurchase agreements fully collateralized by Treasuries.
Issuers must publish a monthly breakdown of reserves and supply, and obtain an annual independent audit to confirm 1:1 backing and asset eligibility.
Although the act prohibits yield-bearing stablecoins, many projects are likely to adapt by offering alternative forms of rewards, such as loyalty programs and rebates that mimic the effect of yield without explicitly paying interest. This regulatory pressure is expected to accelerate consolidation within the stablecoin industry, as users gravitate toward platforms that provide the most attractive non-yield incentives. In turn, stablecoin providers with robust loyalty or rewards structures may capture greater market share, prompting a shift from a fragmented yield ecosystem toward a more concentrated landscape dominated by a few large players offering innovative, compliance-friendly reward mechanisms.
CLARITY Act
What is the CLARITY Act
The GENIUS Act provides clarity for stablecoin regulation, but there isn’t legislation to ensure the rails on which stablecoins are transacted on to be decentralized and trustless. The CLARITY Act is introduced to fill this gap. It draws a crucial distinction between the oversight roles of the SEC and CFTC when it comes to digital assets.
The CLARITY Act introduces precise legal definitions for digital asset, digital commodity, and mature blockchain systems.
A digital asset is defined as a digital representation of value or rights recorded on a cryptographically secure distributed ledger.
A digital commodity is a a fungible digital asset that is not a security, is issued or exists on a mature blockchain system, and is transferable between persons without reliance on intermediaries
A mature blockchain system is a protocol that is functional, public, and sufficiently decentralized such that no single person or group has unilateral power to control protocol rules or asset issuance
Under the CLARITY Act, the SEC is responsible for tokens that function as investment contracts. Investment contracts are typically tokens issued for fundraising and issued by projects that remain centrally controlled or in early development. In contrast, the CFTC is assigned jurisdiction over digital commodities, fungible digital assets that are not classified as securities and exist on mature blockchain systems. The Act allows digital assets to migrate from SEC to CFTC supervision once they become sufficiently decentralized and widely adopted.
Analysis on the CLARITY Act
The CLARITY Act clearly defines what decentralization entails:
A mature blockchain system must be open and interoperable. It must have open source code and must not prohibit anyone from engagement in functional activities with the blockchain.
A mature blockchain system must also have a system of governance. No person or group should have the unilateral ability to alter the functionalities and operations of the blockchain system, nor may any person or group have more than 20% of the outstanding voting power of the blockchain system.
In order for a project to graduate from SEC to CFTC jurisdiction, it must be sufficiently decentralized. Tokens regulated by the SEC are treated as securities, with restrictions and regulation akin to publicly traded companies; while tokens under CFTC jurisdiction are classified as digital commodities and are subject to lighter regulatory demands. Projects under the CFTC’s jurisdiction do not need to file detailed reports or restrict access to their tokens, and markets are generally open to all participants, even without accredited investor requirements.
Before the Act, crypto project teams faced a murky landscape - no one quite knew what truly counted as "decentralized," leading to ongoing legal pressure to go above and beyond in their efforts. Now, that's changed: the Act introduces a clear legal definition of decentralization. Instead of aiming for an ever-shifting or unattainable target, teams now have a straightforward, well-defined benchmark to hit. This clarity brings much-needed relief and sets a predictable path forward for innovators.
We believe that this Act will compel teams to balance centralization for performance optimization and decentralization for market access and regulatory tailwinds.
Anti CBDC Provision
What are CBDCs
A Central Bank Digital Currency (CBDC) is a digital version of a nation’s official currency, directly issued and regulated by the central bank. CBDCs are inherently more vulnerable to government surveillance than stablecoins since every CBDC transaction passes through or can be monitored by the state’s centralized ledger, enabling authorities to track, analyze, or even restrict citizens’ financial activities at a granular level.
CBDCs are different from stablecoins. Stablecoins are privately issued, backed by reserves like fiat currency or government bonds. Thus they lack the central bank guarantees CBDCs have. However, since stablecoins are transacted on public ledgers such as Ethereum and Solana, stablecoin transactions can’t be easily censored by governments or.
What is the Anti CBDC Provision
The Anti-CBDC Provision, formally known as the Anti-CBDC Surveillance State Act, is a legislative measure aimed at preventing the creation and implementation of a central bank digital currency (CBDC) by the Federal Reserve or any other U.S. government agency without explicit authorization from Congress. This provision is aimed at prohibiting government searches and seizures of Americans’ financial data. It also closes loopholes by banning any indirect issuance of a CBDC through third-party intermediaries and requires that any attempt to launch a U.S. digital dollar must first secure clear, formal approval from the legislative branch.
Analysis on the Anti CBDC Provision
The Anti-CBDC Provision pushes financial innovation and activity onto public, decentralized blockchains rather than state-controlled ledgers. Alongside the GENIUS Act and the CLARITY Act, this legislative framework signals a clear policy preference: the U.S. government is choosing to support stablecoins on decentralized ledgers over centrally issued digital money on permissioned government ledgers.
This approach curtails the potential for state-sponsored financial surveillance in a CBDC system and safeguards individual financial privacy. By championing decentralized infrastructure, the legislation aligns with the core ethos of blockchain: ensuring that users maintain sovereignty over their economic lives without fear of transactional censorship.
Final Thoughts
Last week was a historical moment for crypto.
The CLARITY Act sets a clear standard for digital commodities.
The GENIUS Act outlines a clear set of rules for stablecoin issuance and operations.
Finally, the Anti-CBDC provision of the NDAA keeps government surveillance off the table, protecting privacy and encouraging decentralized networks.
With greater regulatory clarity emerging around crypto in the United States, the industry is witnessing a bullish resurgence anchored firmly on American soil. We see a huge demand for local talent: teams that previously sought refuge abroad are returning to the States, and there is a surge in projects actively recruiting US-based policy, developer relations, and partnership experts.
We also see token issuance models evolving to be more US friendly: instead of defaulting to offshore foundation models, many projects are now comfortable issuing tokens directly from Delaware entities. Tokenomics are also being reworked to align better with domestic expectations. Airdrops, as seen with OpenSea, are increasingly targeted at US users. Major platforms such as Telegram are opening Web3 wallets and mini-apps for Americans, highlighting renewed market focus.
This new era of regulatory certainty is igniting powerful momentum across the digital asset sector, fueling a surge of innovative stablecoin banks and payment companies. Established leaders and agile new entrants alike are moving swiftly to deliver institutional-grade solutions in custody, liquidity, compliance, and privacy - critical pillars of a mature crypto ecosystem. Having weathered over 12 years of industry evolution, Pantera has never been more optimistic. With this furious pace of development and a clear legal framework to build upon, the United States is rapidly cementing its role as the undeniable global capital of crypto.
- Paul Veradittakit
Business
Sonnet BioTherapeutics announced an $888M business combination to launch a cryptocurrency treasury reserve strategy, becoming the largest U.S.-listed company to hold HYPE tokens
The newly-created entity is to be named Hyperliquid Strategies Inc (“HSI”), which is expected to hold approximately 12.6 million HYPE tokens
DFDV announced the DFDV Treasury Accelerator – a strategic franchise model to help build public $SOL treasury vehicles worldwide.
DFDV is kicking off the accelerator with support from some of the biggest names in the space: @krakenfx, @PanteraCapital, @Arrington_Cap, @Borderless_cap and RK Capital. These partners will help drive regional launches through investment, guidance, and infrastructure.
Regulation
The U.S. House of Representatives passed three major crypto bills (CLARITY Act, GENIUS Act, Anti-CBDC Surveillance State Act)
The US House of Representatives has officially passed a procedural vote to advance several key pieces of crypto legislation, including the CLARITY Act, the GENIUS Act, and the Anti-CBDC Surveillance State Act.
New Products and Hot Deals
Pump.Fun raised $600M in 12 minutes, reflecting rapid institutional investment in crypto platform
Pump.fun has set a new benchmark in the cryptocurrency world by completing a record-breaking token sale, raising $600 million in just 12 minutes.
Ondo Finance Acquires Strangelove to Accelerate Full-Stack RWA Platform Development
Ondo Finance, a leader in tokenized real-world assets (RWAs), today announced the acquisition of Strangelove, a blockchain development company whose experienced team has unique expertise in building secure and modular blockchain infrastructure.
Coinbase steps into consumer market with stablecoin-powered ‘everything app’ that goes beyond trading
The “Base App,” which replaces Coinbase Wallet, will combine wallet, trading and payment functions as well as social media, messaging and support for mini apps.
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ABOUT ME
Hi, I’m Paul Veradittakit, a Managing Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early-stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.
If you have any projects that need funding, feel free to DM me on twitter.