Two recent acts of Congress represent a unique approach to the regulation of digital currencies.
The United States has made a decisive break with global digital currency trends in July. The House of Representatives of the United States has adopted the State of Anti-CBDC surveillance law, which prohibits the Council of Governors of the Federal Reserve System to directly issue a Central Bank digital currency (CBDC) to the public. A few days later, President Trump signed the guidance and the establishment of national innovation for American stables (engineering) law in law, establishing complete regulations for private and labeled stabillars. These are designed to contain a stable value linked to the US dollar, which helps them avoid the price oscillations of more volatile cryptocurrencies. Although this type is common, other stablecoins can be fixed to different assets, such as other fiduciary currencies, products or other cryptocurrencies.
Together, these measures represent a choice of fundamental policy to reject sovereign digital currency while adopting regulated private alternatives. This framework protects financial privacy and promotes market -oriented innovation, but it also creates new strategic vulnerabilities that decision -makers must carefully consider.
The anti-CBDC law would prevent the federal reserve from publishing, piloting or implementing any digital currency designed for general public use. Supporters of the bill, led by Tom Emmer (R-minn.) And French Hill (R-Ark.) Representatives, cite risks of government surveillance and “programmable money”, pointing to the Digital Yuan of China as an edifying statement of state control over individual financial behavior. Banking industry groups argue that retail CBDCs would allow consumers to completely bypass commercial banks, potentially destabilizing credit intermediation.
The Democrats of the Chamber opposing the Act maintain that the ban could seize future monetary policy innovations and the tools of financial inclusion, in particular during economic crises when direct transfers to citizens could prove to be essential.
The engineering law adopts the approach opposed to the development of digital money, promoting it through regulated private channels. Key provisions oblige federal licenses for stabbing issuers alongside strict risk management and reserve requirements designed to ensure stability and consumer protection. The law ensures the regulatory parity of credit cooperatives and eligible financial technology companies while explicitly excluding algorithmic and non -collateralized tokens.
Although the anti-CBDC law prohibits digital currencies issued by the government, the Act on Engineering establishes formal ways for private digital dollars under prudential supervision. The political message is clear: private innovation receives clarity and regulatory support while public money must remain analog.
This bifurcated approach puts the United States in contradiction with global trends. More than 130 countries – representing 98% of world GDP – explore or CBDC pilot. The China’s electronic digital currency electronic payment project leads to global development, with pilots in Shenzhen and Suzhou with programmable characteristics, including transaction limits and expiration dates – tools that could extend beyond national monetary policy to international commercial establishments.
The digital development of the Euro of the European Central Bank emphasizes the preservation of confidentiality, retaining anonymity for low -value transactions while limiting the use of commercial data. This approach positions the European Union to offer digital payments preserving confidentiality which could compete directly with the Chinese systems controlled by the state and the private American stablescoins.
The regulatory framework emerging from the Act on Engineering and the Anti-CBDC law creates significant competitive vulnerabilities. First, the absence of an option of American public digital currency can decrease the American influence on the evolution of international monetary standards. Like other central banks are developing CBDC with integrated compliance features for cross-border transactions, the United States risks the exclusion of the technical processes from the establishment of standard that could define future global financial infrastructure.
Second, the regulatory clarity of the Act on Engineering, although beneficial for American innovation, creates opportunities for foreign players to take advantage of American surveillance credibility for global operations. Chinese financial technology companies such as Ant Group and JD.com, previously limited by American regulatory uncertainty, can now pursue licenses of stablecoin issuers in favorable jurisdictions such as Hong Kong and Singapore while planning possible integration with systems labeled in American dollars. This arrangement potentially allows Chinese platforms to extend global payment services using tokens supported in dollars while bypassing interior capital controls and geopolitical concerns concerning the digital yuan.
Finally, the generalized adoption of programmable money by foreign governments could systematically reduce the role of the dollar in international trade regulations and sanctions. If other countries are developing CBDC systems that can work with other systems and bypass the compensation mechanisms labeled in dollars, the traditional effects of the monetary policy of American financial sanctions could decrease considerably.
This evolutionary framework has several considerations for American financial sovereignty and global competitiveness. The anti-CBDC law would effectively limit the flexibility of government monetary policy during crises, when direct digital transfers of government to citizens could prove essential to economic stabilization or the pandemic response. While preserving privacy, this constraint can be expensive during future emergencies requiring rapid and targeted financial intervention.
The absence of a digital currency alternative from the US public sector can also hinder American leadership in the development of crucial technical standards for cross-border digital payments, anti-breaches of money and broader global financial governance frameworks. As other significant economies increase the development of the CBDC with a strategic intention, the United States can find itself reacting to the standards established by competitors rather than directing its development.
The Genius Act introduces a regulatory arbitration potential, bringing both advantages and disadvantages. Regulatory arbitration is when an individual or a company operates an escape or a difference in rules between courts or regulatory systems to avoid stricter surveillance or obtain an advantage. This could lead to foreign stages under US regulatory surveillance – strengthening the dollar dollar. However, it raises serious concerns concerning the competence of application of the law, data security and the possibility of foreign strategic interests influencing the critical financial infrastructure denominated in dollars.
The law on the state of anti-CBDC surveillance and the law on engineering represents essential American political choices which protect financial privacy and maintain market-oriented innovation while creating new vulnerabilities, in particular a decrease in global monetary influence and an uncontrolled foreign participation in systems backed by dollar.
While other jurisdictions continue to develop digital monetary tools with an explicit strategic intention, American political decision -makers must carefully assess whether this approach preserves or undermines the American monetary primacy. The risk is not only technological obsolescence, but strategic marginalization in an increasingly digital global financial system. The absence of public sector tools can limit the ability of America to shape the rules governing international monetary competition.
The coming years will test whether private innovation can substitute for public monetary leadership or if the United States inadvertently gave a crucial terrain for strategic competitors better placed to take advantage of integrated public-public-private financial systems for a geopolitical advantage.
