CLARITY and GENIUS Votes 

Among the key regulations during Crypto Week, the 2025 Digital Asset Market Structure Clarity Act (CLARITY) stands out. This bill seeks to end the regulatory turf war between the SEC and CFTC. It also aims to bring clarity to asset classifications and prevent legal ambiguities like the Ripple vs. SEC case. This has implications for both individual and institutional investors. 

Meanwhile, the Guiding National Innovation and Ensuring Uniformity in Stablecoins Act (GENIUS) introduces strict safety requirements for stablecoin issuance. Passed in the Senate in June, it mandates 1:1 cash reserves, formal registration, and compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws. It’s also designed to prevent collapses like Terra (UST). Some officials propose combining both bills into a single comprehensive package. 

CBDC Ban and Political Tensions 

Another major proposal during Crypto Week is the Anti-CBDC Surveillance State Act, which seeks to block the Federal Reserve from issuing a digital dollar. Supporters argue that a CBDC could undermine financial privacy and enable centralized surveillance. 

However, Democrats have launched a counter-campaign named “Anti-Crypto Corruption Week”, accusing the CLARITY and GENIUS bills of serving Donald Trump’s interests. 

Additionally, on Tuesday, July 15 at 3:00 PM, the Senate Agriculture Committee will hold a session on market structure legislation. On Wednesday, July 16 9:00 am ET, the House Ways and Means Committee will discuss crypto taxation. 

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The Bank of Korea has officially paused the second phase of its central bank digital currency (CBDC) tests. Initiated in April, these tests were meant to evaluate the use of a digital won in real-world payments. However, recent government support for stablecoins appears to have shifted the momentum.

High Costs and No Clear Plan Push Banks Away

Sources from the seven participating banks say the CBDC project was already “on the verge of collapse.” The main reason? High costs and lack of a clear commercialization roadmap. Though over 100,000 users joined the initial trial, banks argue there’s little incentive to continue without policy clarity.

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Meanwhile, the government, under newly elected President Lee Jae-myung, is actively promoting stablecoins. A new bill tabled this month allows companies to issue Korean won-pegged stablecoins with a minimum capital of 500 million won (about $370,000). That legislation is quickly reshaping the country’s crypto landscape.

Won-Pegged Stablecoin Initiative Gains Traction

Eight major South Korean banks are now forming an alliance to launch a won-backed stablecoin by 2025. This group includes several CBDC trial participants: KB Kookmin, Shinhan, Woori, and NongHyup.

The move signals a significant shift in strategy. Banks appear more interested in building independent crypto products that offer tangible revenue streams rather than supporting costly central bank projects.

Following the announcement, local fintech stocks reacted swiftly. KakaoPay fell 7%, Hecto Financial dropped 5%, while KB Financial Group and Shinhan saw slight gains of 0.8% and 1.6%, respectively.

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GENIUS Act Passes in Senate  

The GENIUS Act passed the Senate with 68 votes in favor and 30 against. This brings the GENIUS Act one step closer to defining the legal framework for stablecoins. This strong support means the bill could pass the U.S. Senate as early as next week. If leaders speed up the process, an even earlier vote is possible. State-level regulations aimed at increasing transparency, especially for smaller stablecoin issuers, are also on the way.  

What Does the GENIUS Act Aim For?  

The GENIUS Act primarily aims to integrate stablecoins into the U.S. financial system. It expects a significant capital inflow into the crypto market. The bill creates the first federal framework for stablecoins, currently an unregulated payment product. This framework seeks to protect consumers and ensure the stability of the financial system. Additionally, the bill allows banks and non-bank entities to issue stablecoins. This could encourage large companies like Meta or Google to enter the market, potentially increasing liquidity.  

Strict Rules for Stablecoins Are Coming: Banks Are Involved Too!  

The GENIUS Act also considers the concerns of the banking sector. To prevent banks from competing with deposits, they might prohibit interest-bearing stablecoins. In fact, major banks like Bank of America are planning to launch their own stablecoins. This shows how intense the competition is.  

The new bill mandates that stablecoin issuers always maintain a 1:1 dollar reserve. They will typically hold these reserves in secure assets like U.S. Treasury securities. Also, mandatory audits are on the way for issuers with a market capitalization over $50 billion.  

After passing the Senate, the bill will go to the U.S. House of Representatives. Ultimately, U.S. President Donald Trump will sign the bill. President Trump and Treasury Secretary Scott Bessent support the bill. This strengthens the possibility of the bill soon becoming law.  

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New President Acts Fast On Stablecoin Promise

Following his recent election win, President Lee Jae-myung has wasted no time delivering on campaign pledges around crypto. His ruling Democratic Party has introduced the “Digital Asset Basic Act,” aiming to permit the issuance of domestic stablecoins and foster a transparent, competitive crypto landscape.

Under the proposal, local companies will be allowed to issue stablecoins if they have a minimum equity capital of 500 million won ($368,000). Issuers must also maintain reserves to back the coins and receive approval from the Financial Services Commission, South Korea’s top financial regulator.

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The legislation seeks to legitimize stablecoin markets and drive broader adoption by ensuring regulatory clarity and investor protection.

Crypto Gains Mass Appeal Across South Korea

Interest in Bitcoin and stablecoins has soared in South Korea. In Q1 of 2024 alone, transactions involving major U.S. dollar stablecoins totaled 57 trillion won ($42 billion) across the country’s five leading exchanges, according to Bank of Korea data.

An estimated one-third of the South Korean population—around 18 million people—is now involved in the crypto market. Building on this momentum, President Lee is also pushing for Bitcoin ETF approvals and the inclusion of Bitcoin in the national pension fund’s investment strategy.

However, these ambitions face resistance from the Bank of Korea, which argues that private stablecoins could undermine the effectiveness of monetary policy.

Crypto Law Boosts Stocks, But Not Without Skepticism

Anticipation around the bill has already impacted financial markets. Shares in digital wallet provider KakaoPay surged up to 45% in five days following the announcement. Still, JPMorgan analysts caution that the rally may be premature, with real benefits from the legislation yet to materialize.

Despite the uncertainty, South Korea’s proactive legislative push sets a bold precedent in Asia’s ongoing crypto regulatory race.

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Warren Pushes for Tougher Regulations on Stablecoins

Warren assures the passing of the bill, which intensifies the already existing AML and CFT laws for stablecoins. At a Senate Banking Committee hearing the previous month, Adeyemo mentioned proposals, including a bill allowing Treasury to sanction host nodes on the blockchain network.

Warren proposed that the House and Senate examine the Treasury Letter recommendations and consider adding them to any future legislative proposals. She articulates this as a necessity for stablecoins to have greater control over the market valued at $157 billion. The letter was written the day before the pair of Senators (Gillibrand and Lummis) brought forward their not-always-satisfying stablecoin bill, which did not address money laundering and terrorism financing risks.

With the purpose of preventing financial intermediaries, the Treasury would be restricted and blockchain nodes blocked by the Congress of Warren. The contrasting angle of her views is different from the stablecoin bill, which has already been introduced.

Key Players and Perspectives in the Push for Stablecoin Regulation

It seems several key players are involved in drafting potential legislation around stablecoins and cryptocurrencies, including:It seems several key players are involved in drafting potential legislation around stablecoins and cryptocurrencies, including: Urgent financial regulation requires the input of House Finance Committee Chair Patrick McHenry, Ranking Member Maxine Waters, and other lawmakers (or people) who are expected to author the bill on this topic.

Senator Elizabeth Warren, who has written to Treasury Secretary Janet Yellen and Congress, wants strong and definitive methods for approved use of consumer protection, Fed and OCC authorities, and receivership. Senators Kirsten Gillibrand and Cynthia Lummis sponsored a bill in the chamber to address consumer protection and regulatory oversight issues.

Taylor Barr of the Digital Chamber of Commerce confesses that Senator Warren’s position and respectability may solve all of the problems in the emerging regulation about consumer protection, violations, and judicial proceedings.

It is evident that legislators, watchdogs, and others from both sides of the island have been involved in the legal and supervision debates surrounding stablecoins and cryptocurrencies. Senator Warren’s advocacy for essential consumers and investors allows her to influence future rules.

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Efforts to regulate stablecoins in Congress are facing significant challenges this year. However, McHenry and Waters, who have been at the forefront of pushing legislation on the matter, are seeking ways to move it forward. One potential approach discussed is linking it to the reauthorization of Federal Aviation Administration (FAA) funding.

McHenry, who has been vocal about the possibility of passing the stablecoin bill, reiterated this stance, emphasizing the importance of establishing regulations for tokens that provide stability in the volatile cryptocurrency market. Despite McHenry’s optimism, hurdles remain, including resistance within the House and Senate committees.

Senator Cynthia Lummis, who has also been involved in digital assets legislation, indicated last month that Schumer was open to collaborating on a stablecoin bill. However, the path forward is challenging, with the legislation facing obstacles in both chambers of Congress.

While some in the crypto community in Washington, D.C., have expressed doubts about the bill’s prospects for this session, the recent meeting with Schumer and McHenry’s optimism suggest that there is still hope for progress.

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