The decisions made by the U.S. Congress this year will determine where the next generation of financial infrastructure thrives and who leads the rule-making.

Written by: Chris Dixon, Partner at a16z crypto

Translated by: Chopper, Foresight News

Every generation has the opportunity to upgrade infrastructure. In the 1990s, the driving force of innovation was the internet. Policymakers at the time were concerned that the internet would disrupt traditional industries and create new risks. However, lawmakers did not force new technologies into outdated regulatory frameworks, but instead created rules that protected consumers while allowing innovation to flourish. This ultimately led to one of the strongest periods of economic growth in human history.

Today, blockchain networks present similar opportunities. Stablecoins make payments faster and cheaper; asset tokenization drives the modernization of capital markets, and both rely on blockchain infrastructure to operate.

Whether or not the U.S. Congress takes action, these technologies will continue to evolve. The U.S. needs to make a choice: whether to lead in setting industry standards or to cede the field to other countries.

The GENIUS Act has proven that clear regulation is beneficial

The GENIUS Act confirms that prudent policies can unleash tremendous vitality. Stablecoins are digital dollars that can flow freely on the internet. Sending $200 from the U.S. to Colombia through traditional channels often incurs fees exceeding $12 and takes several days; using stablecoins to complete the same transfer costs only a few cents and settles within seconds.

For many years, regulatory uncertainty hindered the adoption of stablecoins, but the GENIUS Act changed that. The act clarifies reserve requirements and establishes a regulatory framework for issuing institutions, eliminating market ambiguities and unlocking the growth potential of the industry.

The results are evident. The current stablecoin market is about $315 billion, with a year-on-year increase of over 50%. Tokens pegged to the dollar have become one of the fastest-growing channels for the dollar’s circulation abroad. Visa's data shows that stablecoins processed transactions worth $100 trillion in the past 12 months. Large institutions such as JPMorgan, Citibank, Visa, Mastercard, and BlackRock are continuously deepening their involvement in blockchain infrastructure.

Crucially, the influence of the dollar is being reinforced. Many people around the world, who find it difficult to open traditional dollar accounts, can now hold and transact digital dollars through software wallets. Clear regulatory frameworks support this new system in establishing based on U.S. standards and domestic institutions, rather than being preempted by alternative solutions.

The GENIUS Act demonstrates that reasonable regulation can expand markets rather than stifle development. However, the act only covers a portion of the industry.

Blockchain networks are still in a regulatory void

The market capitalization of stablecoins accounts for less than 15% of the total cryptocurrency market, yet their operation relies on the remaining 85% of underlying blockchain networks, which still lack a coherent set of federal regulatory rules. This is like regulating smartphones while neglecting cellular communication networks.

The CLARITY Act was created to fill this gap.

The essence of the act is to establish clear rules for blockchain networks and define the regulatory responsibilities of various parties in the digital asset market. By standardizing regulations, it encourages the industry to improve transparency, control risks, and promote healthy competition. The act draws on mature standards from traditional finance, granting regulators the authority to oversee intermediaries, ensuring proper asset custody, customer fund segregation, comprehensive information disclosure, and preventing crises like the FTX collapse, while promoting a new round of institutional funding entry.

Large institutions have already taken action. BlackRock has launched tokenized funds; JPMorgan has built a blockchain payment system; the American Depository Trust Company (DTCC), with assets under custody reaching $114 trillion, is advancing the large-scale implementation of tokenized securities based on the Canton Network. The CLARITY Act will remove barriers to entry, paving the way for traditional financial institutions to legally participate in the market. The benefits extend beyond the crypto industry, impacting consumers, investors, and the long-term competitiveness of U.S. capital markets.

The choice before us

History shows that open, neutral platforms operating under clear rules can create the greatest value. The success of the internet stems from entrepreneurs being clear about the code of conduct. They can confidently do business, attract capital, and compete based on their strengths rather than groping in regulatory fog. Blockchain networks deserve the same development environment.

"Regulation versus innovation" is itself a false dichotomy. The GENIUS Act has overturned this notion: In the latter half of 2025, after the act takes effect, investments flowing into crypto startups exceeded $13 billion, nearly double the $6.9 billion invested in the first half before the act's implementation. Meanwhile, the market predicts that the market for tokenized assets could grow a hundredfold in the coming decades. The choice we face is whether to embrace certainty or to remain in a state of uncertainty. The U.S. can seize this opportunity to reinforce its leadership position in the industry and build future financial infrastructure domestically; or it can watch innovation migrate overseas, governed by foreign regulatory frameworks.

No legislation is perfect, and the CLARITY Act is no exception. The reality is that there is currently almost no consumer protection mechanism in the crypto industry, and the CLARITY Act will fill this gap. Like all legislative processes, not all demands can be met, but the proposed text of this act can push the industry forward. This act has undergone months of bipartisan negotiation, absorbing significant compromises from various industry parties. Despite its flaws, the CLARITY Act is far superior to the current situation of no regulatory protection.

The decisions made by the U.S. Congress this year will determine where the next generation of financial infrastructure will thrive and who will lead in setting the rules. If the CLARITY Act passes smoothly, the U.S. will regain control, much like leading the wave of commercial internet once again. If it chooses inaction, innovation will migrate elsewhere, developing under a regulatory framework established by other countries.