A Thousand Crypto Flowers Blooming

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Dante Alighieri Disparte is the Chief Strategy Officer and Head of Global Policy and Operations for Circle, a leading financial technology firm and the issuer of regulated digital dollars and Euros, USDC and EURC. USDC has supported more than $20 trillion in cumulative transactions on the public internet and a global payment network in more than 180 countries. Dante is a life member of the Council on Foreign Relations, a member of The Economic Club of Washington, D.C. and the Bretton Woods Committee. 

In crypto markets, downturns are known as crypto winters. We are coming out of a prolonged and particularly frosty crypto winter – which some were likening to an ice age – defined by an insidious blend of regulation through enforcement and market failures like the collapse of the FTX house of cards. Today, with the election of the most crypto-forward Administration in the US, crypto looks to be poised for not just a spring resurgence, but a veritable superbloom. However, for this exuberance to translate into permanent competitive advantage, job creation, and enhanced national security, it is critical that the President’s policies be enacted into US law, not simply left as Executive Orders that can be undone in an instant. Those laws need to protect against market failures like the stablecoin-in-name-only coin Terra-Luna and prevent things like the heavy-handed sanctioning of Tornado Cash. But elephants get eaten one bite at a time, and the starting point for permanently empowering the beneficial growth of crypto in the US and around the globe should be a US stablecoin law.  

A Great Start

The US already is leading in crypto because of the dynamism of its markets (and the persistence of the dollar as the world’s reserve currency). But President Biden’s crypto EO, was a not-so-smart contract for the onset of crypto winter. With a Republican clean sweep of all branches of government and the White House making crypto a national priority with a pro-innovation executive order (EO), the end of American gradualism with digital assets, AI and other emerging technologies is nigh. President Trump’s Crypto EO is all about unleashing pent up animal spirits in the market, and boosting US crypto dominance by making US crypto policy inevitable. In the flurry of legislative and policy actions, stablecoin rules seem to be a topmost priority with two very similar bills introduced in the House and Senate. 

President Trump’s crypto EO calls for a number of critical measures, including naming the first-ever crypto and AI czar in David Sacks, who not only knows payments and emerging technology, but is also a successful investor. There will also be an inter-agency crypto task force formed to advise the President on how to make the US the leading market and US rules the global standard. This taskforce will include private sector leaders, whose jockeying for the highly coveted seats is a clear indication of its anticipated impact. Critically, the EO also makes it clear that in the pitted digital currency space race, a rules-based free market, rather than the Federal Reserve running a central bank science experiment with the greenback in the form of a central bank digital currency (CBDC), will win the day for digital dollars.

Stablecoin > CBDC

US political antagonism towards CBDCs was the first crypto market issue to become a matter of presidential politics. CBDCs were a campaign lightning rod during a heavily contested national and even state-level electoral cycle. President Trump made clear that any issuance of a US CBDC would not only require Congressional approval, it would have to satisfy a deep-seated penchant for financial privacy held in the US. While the Fed had already hinted at these considerations, the EO cements them into policy. The air gap between the government, your wallet or purse, and how you spend your money is a feature, not a bug. At the same time, to the right of lawful, the use of money in all its forms, including as cryptographic digital dollar tokens (aka dollar-denominated stablecoins), should be free and eventually accompanied by a financial services equivalent of a “trusted traveler program.”

Indeed, by any measure, dollar-denominated stablecoins are not only the first killer application in crypto markets, they are also clearly the new killer applications in payments, where the global movement of money is stuck – charitably – in the 1800s. While broad crypto markets are soaring and the wave of institutional adoption is gaining steam, stablecoins are serving as the digital scaffolding supporting overall market activity. Bitcoin pricing has surged past $100,000, blockchain networks continue gaining traction among developers and institutions alike - proving that in the era of open finance there will not be one ledger to rule them all, but rather open, interoperable and constantly upgradable systems purpose built for different use cases. While the often suspect crypto collectibles of meme coins and non-fungible tokens (NFTs) have made a comeback, including those issued by the President and First Lady, stablecoins remain the most persistent breakthroughs. 

Stablecoin transactions are approximating $30 trillion, and total circulation has surpassed $200 billion since last year. Stablecoin transaction volumes seem poised to overtake traditional retail payment networks, and their non-trading use cases like basic dollar store of value continues to reach hundreds of millions of end-users. But money and payments are but the first domains of digital transformation. Many adjacent markets and use cases remain within reach and are a part of the inexorable march of fintech, which is forever blurring the lines between where analog banking ends and technology begins. If stablecoins are digital cash, the advent of tokenized money market funds (TMMFs colloquially) are creating cryptographic yield-bearing capital market instruments. The growth and institutional adoption of TMMFs from household name financial institutions to startups alike hint at stablecoins and tokenized fund structures serving as the twin pillars of a digital economy that does not take bank holidays and, overtime, will support billions of end-users and trillions in global economic activity.

Securing the next Bretton Woods

In 1944, with the end of World War 2 in sight and the global economy fundamentally altered by years of catastrophic war and destruction, 44 nations came together and laid the foundation for the next 80 years of international finance. The global financial order would be pegged to the US dollar, lashing the countries whose economies had been ravaged by war to the stability of the US economic juggernaut and giving the US unprecedented influence over global markets by making the dollar the reserve currency of the world. This exorbitant privilege is equal measure the sum of US institutions, as it is the representation of the full faith and credit of the US economy. Dollar dominance, however, is not a national birthright, least of all in an era of intense competition for alternative payment systems resistant to the long arm of US hard and soft power. Protecting and growing the global role of the dollar, including from the risk of technological obsolescence, requires rules-based, free-market competition. We are in a position to extend this position of power into the age of crypto and device-centric financial services. 

Countries cannot have the economy of the future, without enabling the money of the future. While some jurisdictions continue to follow a wait and see approach with crypto rulemaking, others such as Brazil seem ready to seize a second mover advantage in establishing a regulatory structure that supports both bank and non-bank payment innovations - including rules that would support interoperability between regulated international stablecoins and domestic programs. Other regions, for example Europe, have passed the world’s farthest reaching rules for crypto markets, with the Markets in Crypto-Assets Regulation (MiCA). While MiCA's impact on fostering a homegrown market remains to be seen, its effect on de-listing non-compliant stablecoins (known as e-money tokens), and conveying policy through crypto exchanges is clear and far-reaching. The question that remains is what response will MiCA engender in the US and will Congress and the US government, which seems prepared to test even close allies like Canada with a trade war, will stand by idly while digital dollars are subjected to European strictures. The European Central Bank, moreover, seems to be among the last bastions in the Western world that remains steadfast in its course to launching a CBDC, with monetary and payment system sovereignty being among their stated goals.

Rather than pursuing contentious policymaking, the vacuum of US regulatory and policy leadership needs to be filled to create globally harmonized rules for crypto-markets, including the global passportability for regulated stablecoins. The scorched earth of crypto’s fight in and with Washington can give way to fertile ground in which a uniquely American industry can flourish in the US and invest and expand around the world. Like the internet before it, which flourished after some fits and starts with bubbles and vaporware, once the Telecommunications Act was passed in 1996. Crypto innovation, which is the fabric of the internet of value, requires the passage of US laws to create market, investor, developer and end-user certainty. While crypto may not be right for everyone, everyone’s rights to participate in these novel markets should be protected. There is no better way to do that than the passage of US laws. Other countries should take notice, follow suit and work towards a globally harmonized framework in concert with the US, rather than in conflict.

By this measure, 2025 is off to a good start. Nubank, Brazil’s breakthrough fintech, has enabled USDC as a digital dollar store of value for its more than 100 million users. With the proliferation of these use cases and channel partnerships around the world, the real pollination driving crypto spring is less a fight about crypto market assets or tokens per se, and more a fight for reach. And no one has more reach than the American economy. If the US acts now, crypto will not just be on the edge of modern finance, it will be at the core and no asset more central to this core than today’s form of regulated digital dollars (stablecoins), serving as the digital cash of the internet age.

The Time is Now

Gone are the days where countries can afford to hurry up and wait for crypto to disappear or remain relegated to the financial fringe. The US, for its part, has a choice to make in whether to lead or be led in novel, always-on crypto finance. That choice requires addressing a deep-seated and often insidious fintech constitutional crisis that has stalled past legislative attempts at crypto rulemaking. At the heart of this policy clash is the state-based framework of regulating payments and insurance, which are two financial markets subject to state oversight, and the preservation of the dual banking system, which subjects state banks to a Federal floor. Add to this the cryptic and often hostile national bank policy, which has precluded many banks from banking crypto, or has imposed penurious capital and other conditions on banks, and it is little wonder why crypto policy has been defined by a constant drum beat of war. The US won the actual space race when our political leadership gave us a destination. In the fight for the future of money, a new US Administration has made one thing clear, America aims to win.

The opinions shared in this article are the author’s own and do not reflect the views of any organization they are affiliated with.

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