Don’t Let the Senate Undercut U.S. Leadership In Crypto

“America First” is more than a slogan—it’s a guiding principle. For the Trump administration, it should guide policy across the board, including in the fast-moving world of cryptocurrencies. With the Trump administration now working to secure American leadership in digital assets, Congress must avoid undermining progress by giving foreign competitors a regulatory edge.

Like it or not, cryptocurrencies are here to stay. Millions of Americans use them—for investing, transacting, or building the infrastructure of tomorrow’s financial system. Stablecoins in particular—digital assets pegged to a stable asset, such as the U.S. dollar—have emerged as a powerful bridge between traditional banking and fintech innovation. Stablecoins make dollar-based transfers faster, cheaper, and more accessible, especially for those left out of our legacy financial system.

But under the Biden administration, innovation was stifled by regulation through prosecution. Agencies made up rules on the fly, punishing entrepreneurs for practices that hadn’t previously been deemed illegal. The result? A chilling effect on U.S.-based crypto services, which drove users and startups overseas and created opportunities for scammers. According to the FBI, cryptocurrency investment fraud soared 53% after Biden’s 2022 executive order compelling cryptocurrency regulation. Instead of fostering innovation, Biden’s regulators created chaos.

The Trump White House is seeking to bring clarity and order. The administration has rightly rolled back the Biden administration’s misguided guidance treating digital assets as unregistered securities, issuing an executive order prioritizing a market-friendly framework for U.S. stablecoins. Meanwhile, the Trump Securities and Exchange Commission has indicated it will focus on protecting consumers and ensuring reserve backing—without smothering innovation.

The House of Representatives is rightly creating legislation to put these policy directions into law. Its pending STABLE Act of 2025 would require stablecoin issuers to maintain 1:1 reserve backing and follow anti-money laundering laws—a light-touch, rules-based framework that aligns with President Trump’s commitment to empowering American innovation.

Legislation making its way through the Senate, while similar to the House bill, risks grasping defeat from the jaws of victory. Its GENIUS Act of 2025 would allow foreign stablecoin issuers to operate in U.S. markets without following the same regulatory standards imposed on American firms. That’s a gift to overseas companies like Tether Holdings, which, according to the fine print in its terms of use, is not obligated to redeem coins in U.S. dollars and avoids key transparency obligations.

The Senate’s carveout for foreign stablecoins creates an obvious—and damaging—incentive: Why would an American company stay here, face U.S. oversight, and compete at a disadvantage, when it can simply issue coins offshore and enjoy full access to American markets? And wouldn’t this enable cryptocurrency fraud, such as what exploded during the Biden administration?

Markets function best when everyone plays by the same rules. A country that aims to lead in digital finance should not stack the deck against its own businesses. Ensuring a level playing field isn’t about heavier regulation—it’s about fairness. Congress should drop this loophole and ensure that stablecoin regulation supports—not undermines—U.S. leadership in crypto.

Beyond fairness, exempting foreign entities from rules presumably needed to prevent criminal activity necessarily empowers non-U.S. firms to rip off Americans. It is hard to imagine why Congress would view this as a good thing.

Washington has a choice: Reward American innovation and strengthen our position in global finance while protecting Americans—or hand a strategic sector to foreign competitors who could profit from fraudulent activity. The future of American crypto leadership depends on getting this right.