A significant week for Crypto Assets on Capitol Hill: Three bills reshape the industry landscape.

• "Encryption Week" Legislative Action (July 14 to 18, 2025) The U.S. Congress will advance three key bills during "Encryption Week": the CLARITY Act, the Anti-Central Bank Digital Currency (CBDC) Act, and the GENIUS Act. These three bipartisan legislations aim to clarify the encryption regulatory framework, prevent government overreach, and provide legal clarity for the digital asset industry.
• CLARITY Act: Clarifying the Structure of the Encryption Market The CLARITY Act categorizes digital assets into three types: digital goods, stablecoins, and excluded assets, and clarifies the regulatory authority of the SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission). The Act also introduces the "bright line test" to determine whether a crypto asset is a commodity and sets rules for trading platform registration, consumer protection, and financing exemptions.
• Anti-CBDC and GENIUS Act: Limiting Federal Reserve Power, Regulating Stablecoins The Anti-CBDC Act prohibits the Federal Reserve from developing or issuing any form of digital dollar, making the United States one of the few major economies that explicitly bans retail Central Bank Digital Currency. The GENIUS Act establishes a federal regulatory framework for stablecoins, requiring 100% reserve backing, transparent disclosure, and a strict licensing system, while also banning algorithmic stablecoins and yield-bearing payment stablecoins.

Introduction

In July 2025, the U.S. Congress will hold a one-week "Crypto Week" (from July 14 to 18) dedicated to reviewing comprehensive cryptocurrency legislation. The Republican leaders of the House Financial Services Committee and the Agriculture Committee have dubbed this special session "Crypto Week" and promised to fast-track three landmark bills: The CLARITY Act, The Anti-CBDC Surveillance State Act, and the Senate's GENIUS Act.

During the encryption week, the House will debate each bill and vote on it (in many cases). All three bills have received bipartisan support in the relevant committees. For example, the CLARITY Act has been passed by the House Financial Services and Agriculture Committees; the Anti-CBDC Act has also passed the House Financial Services Committee. The Senate has approved the GENIUS Act and is awaiting action from the House.

Overall, these measures aim to delineate responsibilities for regulatory bodies, protect consumers, and prevent excessive government overreach in the encryption currency space, covering topics ranging from encryption market structure to privacy and stablecoin regulations.

"CLARITY Act": encryption market structure

The CLARITY Act (2025 Digital Asset Market Clear Act) is a bipartisan-supported legislation aimed at establishing a unified regulatory framework for digital assets. The core objective is to address the issue of which agency—Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC)—should regulate different cryptocurrencies.

Key points of the bill:

• Three-tier classification: Tokens are divided into (1) digital goods (such as Bitcoin), (2) stablecoins, and (3) excluded digital assets. Importantly, goods are fully regulated by the CFTC, while securities ("investment contracts") are still regulated by the SEC.
• Clarify CFTC Responsibilities: The CFTC becomes the primary regulator of most cryptocurrency spot and derivatives trading, requiring crypto exchanges to register with the CFTC instead of the SEC.
• Financing Exemption: Issuers can raise up to $75 million annually through a new registration exemption mechanism, encouraging small-scale financing.
• Consumer Protection: Trading platforms must comply with anti-fraud, anti-money laundering (AML/KYC) and reporting regulations, and must separate customer funds, disclose reserves, etc.

The bill also introduces a "bright-line test" to determine whether a digital asset is classified as a commodity rather than a security:

• Time Maturity: At least four years after the initial coin offering
• Capital Restriction: Financing in the past 12 months does not exceed $75 million.
• Distribution Requirement: No single entity controls more than 10% of the tokens
• Decentralized Governance: No single party can unilaterally change the protocol.

In the legislative process, the "CLARITY Act" has been passed by the House Financial Services and Agriculture Committees and is currently on the "Joint Schedule," awaiting a vote by the full House. If the House passes it, the bill will be submitted to the Senate for review.

If passed, it will become the first comprehensive federal encryption market structure law in the United States, significantly reducing the SEC's enforcement authority in the encryption field and granting the CFTC new spot platform regulatory powers. Supporters believe this will promote innovation and strengthen consumer protection; critics worry it may weaken securities protection and leave legal loopholes. However, it will reshape the way American encryption companies operate.

"Anti-CBDC Surveillance State Act": Prohibiting Digital Dollar

In July of this year, the House will review the "Anti-CBDC Surveillance National Act", which prohibits the Federal Reserve from creating a retail Central Bank Digital Currency (CBDC). The bill explicitly prohibits the Federal Reserve from issuing any form of digital dollar CBDC.

Specific content:

• Prohibit the Federal Reserve from providing services directly to individuals: No accounts or financial products may be offered to the public.
• Prohibit the Federal Reserve from issuing CBDC: Whether through direct issuance or issuance via intermediaries such as commercial banks.
• Prohibition on Research and Development: The Federal Reserve Board shall not research, test, develop, create, or implement CBDC, nor shall it use digital money in monetary policy.
• Congress Authorization: Confirming that the Federal Reserve has no authority to issue digital currency without new legislation.

In short, the bill would permanently ban a government-led digital dollar. Supporters argue that this will protect financial privacy and the freedoms of American citizens.

Become one of the major economies that prohibit CBDC

The United States may become one of the few large economies to explicitly prohibit the use of CBDC for retail purposes. This stands in stark contrast to regions like the European Union, which is actively promoting the digital euro program. The European Central Bank is conducting research on technical prototypes and legal frameworks, planning to operate CBDC alongside cash and private digital payments.

Other major economies (China, Japan, the UK) are also conducting CBDC pilot programs or consultations. In contrast, the US policy is more inclined to support stablecoins issued by the private sector rather than government-issued digital currency.

If retail-type CBDCs were ever launched, they could become strong competitors to stablecoins, as they have government credit backing, are priced in dollars, and can be quickly accepted. However, prohibiting CBDCs would allow USDC, USDT, and future compliant stablecoins to maintain their market leadership. At the same time, The GENIUS Act is also under review, which aims to establish a tiered regulatory framework for stablecoin issuers, indicating that the United States tends towards regulating and legitimizing stablecoins rather than replacing them with government products.

"GENIUS Act": Federal Stablecoin Regulatory Framework

The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) passed by the Senate is a bipartisan-supported bill aimed at regulating stablecoins. The bill was passed by the Senate on June 17, 2025, and is now awaiting review by the House.

Core content:

• 100% Reserve: Compliant stablecoins must be fully backed by highly liquid assets (such as US dollars or short-term government bonds) to ensure users can redeem the full amount.
• Information Disclosure and Auditing: Issuers must publicly disclose reserve status at least once a month, conduct annual financial audits, and perform regular third-party verifications.
• Licensing Mechanism: Issuers with a market value exceeding $10 billion must obtain federal licensing (dual federal and state licensing), while smaller issuers may choose qualified state licensing provided they meet federal standards.
• Consumer Protection and Anti-Money Laundering: Must comply with the Bank Secrecy Act and other anti-money laundering/counter-terrorism financing regulations, and implement "ethical barriers" to prevent market abuse. Users have the right to redeem at any time.
• Prohibition of Algorithmic Stablecoins and Interest-bearing Stablecoins: Clearly prohibit algorithmic stablecoins without full reserves, as well as payment-type stablecoins that pay interest or dividends to users.

If implemented, the bill will establish the legal status of stablecoins as safe, dollar-equivalent payment instruments, which is expected to increase confidence among consumers and institutions. Issuers must maintain transparency and conservative operations, which may promote the wider use of stablecoins in payment, remittances, and entry scenarios for digital assets.