Last year’s GENIUS Act meant that stablecoins could be at home in any regulated institution. The dollar got a software upgrade.
Now, Congress must finish the second part of the crypto rulebook by passing the CLARITY Act to ensure that builders in Asia and around the world continue to work with the United States in mind, investing onshore rather than decentralizing offshore.
Taiwan — my home’s — entire modern prosperity was built inside an American-written trade order. TSMC and Nvidia’s multibillion-dollar contracts wouldn’t be possible without this.
When Congress passed the GENIUS Act last year, it was vindication for my thesis that stablecoins were the future of trade settlement.
But GENIUS is only half a rulebook.
It only deals with dollars, not markets. It does not fully answer which tokens are securities or commodities, who registers where, what custody standards apply, or what legal status exchanges, brokers, developers, and infrastructure providers occupy.
That is CLARITY’s job.
I built a payment company in the days before GENIUS. I know how hard it is to get banks and other regulated entities on board when the rules look ambiguous.
2023 was a dark year for crypto in the U.S. The lack of rules meant that offshore jurisdictions that were writing them began to seem very enticing. Remember the lawsuits against practically everyone in the industry?
U.S. rules are the only truly exportable rules in finance because they come bundled with the dollar itself. When Washington writes clearly, everyone can harmonize around that, and a complicated patchwork of rules is avoided. When Washington hesitates, everyone else has to hedge and look elsewhere.
Rules are the ultimate form of soft power.
Beijing is anti-crypto, but understands the value proposition of settling transactions in seconds. So, instead, it has spent a decade building state-run settlement rails using its CBDC, eCNY.
CBDCs have many of the same benefits as stablecoins, but would fall under the rulebook of its biggest proponent — China.
Instead of using USDC or USDT to settle transactions in their cross-border supply chain, companies could turn to eCNY.
Taiwan understands better than anyone what it means for critical infrastructure to answer to another capital. Payments infrastructure is not neutral once it reaches scale.
The real contest is not crypto versus banks. It is whether the digital layer of trade settlement is governed by Washington or Beijing.
That is why the clock on CLARITY looks different from Taipei.
CRYPTO CLARITY: TIME FOR WASHINGTON TO TAKE THE FUTURE OF MONEY SERIOUSLY
Taiwan learned from America that prosperity follows the rule writers. It worked well for us in the last century and is what helped put a Taiwan-made PC in every office on Wall Street. We would rather build to American rules than watch another rulebook take hold in Asia.
Last July, Washington proved it could be GENIUS. It has less than a month to prove it can be clear.
Darren Wang is CEO and founder of OwlTing.