The crypto industry was one of the biggest spenders in the 2024 election cycle — and now it’s having quite the month on Capitol Hill.
Last week the Senate passed a bipartisan bill called the GENIUS Act, which could lead to something called stablecoins being used by the likes of Bank of America and Amazon.
Today, two Republican senators unveiled a proposal that would change how most cryptocurrencies are regulated — and more importantly, by whom: the Securities and Exchange Commission or the Commodity Futures Trading Commission.
So why does this matter to people who have never invested in Bitcoin or whose eyes glaze over whenever the blockchain is mentioned?
It’s a question of economic stability.
“When things work well, regulatorily, the entire economy does well,” said Chris Brummer, a professor at Georgetown Law. “But when things don’t work as well and you have bouts of financial instability, your life can be made harder as well.”
The total crypto market cap is now over $3 trillion globally, and there’s still major debate over who should regulate it.
Under the Biden administration, the SEC took the lead regulating certain aspects of crypto, mostly by suing crypto companies. However, a different approach may be needed.
“Crypto is trying to interpret a bunch of different opinions across federal agencies, across the judicial system, and trying to find the regulatory path,” said Summer Mersinger, head of the Blockchain Association, a crypto lobbying group.
The industry wants most cryptocurrencies regulated by the CFTC and not the SEC. It’s complicated, but they basically argue because of crypto’s decentralized nature, it’s economically more like a barrel of oil or bushel of wheat than Apple stock.
But Corey Frayer at the Consumer Federation of America said there’s an ulterior motive.
“The CFTC just isn’t equipped by expertise, by staffing, by budgeting to handle an enormous securities industry,” he said.
Currently, about 700 people work for the CFTC. The SEC has about 5,000.
There are two proposals — one in the House, one in the Senate. They’d have to be reconciled and passed by both chambers before landing on President Trump’s desk.
The final outcome — and which agency ends up in charge — could shape not just the future of crypto, but how financial innovation is overseen in the U.S. for years to come.
