OPINION: WHILE CONGRESS BALKS AT CRYPTO REGULATION, OUR ADVERSARIES PUSH FOR MARKET DOMINANCE

The United States stands at a defining economic moment.

Digital assets and blockchain-based finance are not going away. The underlying technology is real, its uses are expanding, and the rest of the world is moving ahead.

The question is whether America will shape this emerging sector with clear rules and serious standards — or continue allowing regulatory confusion to drive innovation, capital, and talent offshore. That is why Congress should pass the Digital Asset Market Clarity Act.

The Securities and Exchange Commission recently issued guidance clarifying how certain federal securities laws may apply to portions of the digital asset marketplace. That is preferable to the hostility and improvisation that have too often characterized Washington’s approach.

But let’s not pretend this solves the problem. Guidance is not law. What one SEC chair allows, another can reverse. That is no way to build a durable market.

Whether one is enthusiastic about crypto or skeptical of much of it, there should be broad agreement on one point: a serious economy cannot function under government by ambiguity. Investors need to know the rules.

Entrepreneurs need to know the boundaries. Consumers need protection rooted in law, not in shifting political winds or regulatory improvisation.

At the moment, the crypto sector remains burdened by uncertainty. Firms trying to operate responsibly in the U.S. are often left to guess whether today’s compliance efforts will satisfy tomorrow’s regulators.

That uncertainty is corrosive. It discourages legitimate enterprise while doing little to stop bad actors.

The long battle over Ripple and XRP illustrates how absurd this has become. The SEC effectively tried to make policy through prosecution, suing Ripple in 2020 and forcing the courts to sort out what regulators should have made clear from the start.

After years of expense and uncertainty, the case produced at least some meaningful distinctions between direct institutional sales and XRP trading on public exchanges — but that is precisely the scandal. No serious industry should have to spend years in litigation just to learn the rules of the road.

That is not sound regulation. That is institutional failure.

Congress is supposed to write laws. It should do so.

The Clarity Act would provide what is badly needed: clear definitions for digital assets, a rational allocation of regulatory authority, and a coherent legal framework for the marketplace.

In short, it would replace guesswork with rules and improvisation with law. That is not a gift to the crypto industry. It is a reaffirmation of how a serious republic is supposed to govern.

And the stakes here are larger than crypto itself. This is about America’s place in the future of finance.

If the U.S. refuses to establish a workable legal structure, other nations will fill the vacuum. Capital will migrate. Innovation will relocate.

Financial infrastructure will be built elsewhere. That would weaken America’s competitive standing and, over time, undermine the central role of the U.S. dollar in global commerce.

I remain skeptical of grandiose claims that every token represents the next great breakthrough. I have long believed that money should have enduring integrity and that financial systems work best when rooted in trust, stability, and clear value.

But one need not embrace every crypto evangelist’s prediction to see that blockchain technology and digital assets have practical uses — from improving payments and settlement systems to enabling faster, cheaper cross-border transfers.

That is the real point. Mature societies do not regulate from panic, nor do they legislate from infatuation. They set rules that separate serious innovation from speculative nonsense.

We have seen this before. In the early days of the internet, there was fraud, excess, and unserious ventures aplenty. Yet beneath the noise was a transformative technology.

The answer was not to smother it. The answer was to let genuine innovation develop within a functioning legal and economic framework.

Congress should take the same approach now. The Clarity Act will not solve every problem in digital finance, nor will it magically validate every crypto project.

CRYPTO INDUSTRY SPENT TENS OF MILLIONS INFLUENCING NOW-DELAYED CRYPTOCURRENCY REGULATIONS

But it would finally do something Washington has too often failed to do: provide clarity, consistency, and the rule of law. That alone would be a major achievement.

America does not need blind enthusiasm about crypto. It needs sober judgment, sound policy, and legal certainty. Congress should provide all three and pass the Clarity Act.

Steve Forbes is chairman and editor-in-chief of Forbes Media.