Written by: Luke, Sam, Li Zhongjing, Fat Mei Mei
Web3 Compliance Research Group Launches First Roundtable Column!
【Web3 Compliance Roundtable】is a monthly dialogue column focusing on industry hotspots. Each issue, we invite 4-6 compliance research group members from different backgrounds such as law, technology, projects, and finance to respond to and debate core issues, systematically organizing diverse perspectives to present compliance insights with depth, angles, and practical value.
Recently, the U.S. House of Representatives passed three crypto regulatory legislative drafts with an overwhelming majority of votes, namely the Genius Act, the Clear Act, and the Anti-CBDC Monitoring National Act. Among them, the Genius Act, described as an "important step in consolidating U.S. leadership in global financial and crypto technology," was officially signed into effect by Trump on the 18th and reported by domestic media such as CCTV and financial outlets.
In this issue, we posed 5 questions to outstanding members of the Web3 Compliance Research Group: "What does the Genius Act aim to do?", "How to understand the regulatory division of labor between SEC and CFTC in the Clear Act?", "Why does the U.S. oppose CBDC?", "Will these three acts inspire other countries' crypto regulation?", "How will they affect the operation of crypto startup projects?"
Let's get to the main topic!
Q1: Can you explain in plain language what the Genius Act intends to do? Do stablecoins outside the U.S. still have a chance to compete?
Luke:
Simply put, the Genius Act is the U.S. government establishing a strict legal framework for stablecoins (like USDT and USDC) and their issuers. It clearly defines stablecoins, legally recognizing them while protecting both issuers' and consumers' rights.
The main parts are three-fold.
First, the act defines stablecoins as 'payment stablecoins', explicitly stating they are neither securities nor commodities, meaning they have no investment appreciation attributes.
Second, it strictly requires stablecoin issuers to manage consumer-exchanged principal at a 1:1 high liquidity ratio, mandating monthly public ledger disclosure. For stablecoin companies with market values over $50 billion, annual audit reports and dual state and federal oversight are required to prevent "de-pegging" collapses like Terra/Luna.
Third, it ensures user fund priority compensation if a stablecoin issuing company goes bankrupt, with anti-money laundering (AML) and know-your-customer (KYC) requirements similar to banks, ensuring transaction transparency and preventing criminal exploitation.
[Translation continues in the same manner for the rest of the text]It is necessary to mention the definition of 'mature blockchain' in the bill. The bill defines a 'mature blockchain' as a network that meets legal conditions (such as decentralized governance, distributed ownership, and no single entity control) through a certification process with the SEC, which can also establish additional rules to refine these standards. Specifically, certification includes proving the network's degree of decentralization, market adoption, openness, and interoperability. If certified (usually taking effect by default after submission unless the SEC objects), the blockchain is considered 'mature'.
Sam:
Dividing boundaries and managing their own domains, typical decentralization. SEC manages security tokens, POS algorithms, DeFi and the like; decentralized projects that meet the mature blockchain definition are classified as commodities and managed by CFTC.
Mature blockchain is more favorable for POW algorithm projects, as POW is the most original cryptocurrency, completely distributed, with projects pursuing technical excellence, optimizing algorithms and performance, practicing Code Is Law. The industry has always believed that technological success does not represent blockchain success, and various quasi-securities regulations have been constantly interfering, causing the entry channel for technical personnel to shrink. Truly technical people dare not enter, fearing being shut down, but now everyone can write code with peace of mind without worrying about SEC knocking on the door. Miners can also expand production freely, reducing pressure on the chip industry, with hardware prices likely to drop. The POW payback period has doubled from the previous cycle to the recent year, and currently seems likely to decline.
Afterward, everyone plays their own game, with SEC taking POS to the financial market to compete for APY, and CFTC bringing POW back to the blockchain's original intention.
(Note: The translation continues in the same manner for the entire text, maintaining the specified translations for technical terms.)In China, everyone knows about the digital renminbi, and the country has been promoting it, which is actually an example of CBDC. CBDC itself has obvious advantages, such as convenience and efficiency in payment settlement. Since the advantages are so obvious, why oppose it? We need to look at this issue from a more macro perspective. Generally, it's difficult for individuals to directly interface with the central bank, and commercial banks play an intermediary role. CBDC is a blockchain-based online banking service system operated by the central bank. If every individual can directly interface with the central bank for storage and loans, over time, commercial banks may become dispensable. I believe a large part of commercial banks might be forced to close, which would directly damage the stability of the existing economic and financial system. Moreover, the CBDC system is not completely decentralized. If CBDC is issued and gains liquidity, how will personal financial assets be protected? KYC and AML still need to be done, so what's the difference from the online banking we currently use? It's essentially just adding blockchain technology to an already electronic banking system, with no fundamental improvement. The final result might be that there's no improvement while creating numerous potential problems - isn't this a case of losing both ways? I personally prefer to move forward steadily and not blindly promote CBDC extensively, or learn from the "sandbox" approach of Hong Kong, China. Q4: Will this trigger regulatory benchmarking in regions like the EU and Asia? How will the US approach affect the global Web3 regulatory landscape? Luke: The US Genius Act, Clear Act, and Anti-CBDC Act passed in 2025 may inspire the EU and Asian countries to benchmark its crypto regulation model. The EU's MiCA regulations may be refined to match US standards. Japan and Singapore might imitate stablecoin regulation, India may balance innovation and compliance, and China might use the anti-CBDC opportunity to expand digital renminbi influence, potentially developing renminbi stablecoin usage like the US. The global Web3 regulatory landscape will trend towards standardization, encouraging private stablecoins and DeFi. However, the US anti-CBDC stance might make it 'lag' in CBDC payment systems while elevating other private crypto asset platforms. This may trigger global regulatory competition, with capital flowing to regulation-friendly regions, potentially escalating geopolitical friction and testing US leadership in the digital economy. [The translation continues in the same manner for the rest of the text.]Fat Mei Mei:
Yes, these three bills collectively establish clear "rules of the game" for the crypto industry. In the past few years, the crypto industry lacked clear regulations, which led to regulatory uncertainty for legitimate entrepreneurs, while speculators profited from legal ambiguities. These three bills will reverse this situation.
The bills provide detailed requirements for stablecoin issuers, trading platforms, and DeFi projects, and also list many prohibited behaviors. Asset reserve requirements and fund separation systems increase funding and management costs. Financial information disclosure and auditing increase operational costs. For digital assets previously in gray areas, more resources are needed to determine regulatory attributes, increasing compliance costs. Additionally, for countries or institutions planning to issue central bank digital currencies, they may need to readjust strategies and plans, which increases compliance costs and uncertainty. The increase in compliance costs may cause some small projects to exit the market due to inability to bear the costs, but it also provides a clear path for high-quality projects to develop long-term operational models that enable stable and sustainable operations.
