Bipartisan Support for Stablecoin Regulation Gains Momentum in US

The crypto industry is experiencing a significant shift in policy, with both Democrats and Republicans in the US aligning to secure the US dollar's global reserve currency status through stablecoin regulation. Representative Ro Khanna from California has noted that at least 70 of his fellow Democrats now recognize the importance of stablecoin regulation. This bipartisan support is expected to lead to sensible crypto market structure and stablecoin bills this year. However, the positive news has not translated into a surge in crypto prices due to growing recession fears stemming from President Donald Trump's trade policies.

Cathie Wood, CEO of ARK Invest, has joined the chorus of voices warning about an impending recession. While a recession is generally unfavorable, Wood suggests it could provide the White House and the Federal Reserve with more flexibility to implement pro-growth policies. Speaking at the Digital Asset Summit in New York, Wood expressed concern about the slowing velocity of money, which typically indicates a recession. She believes that declining GDP could give the president and the Fed more leeway to enact tax cuts and adjust monetary policy, potentially benefiting risk assets like crypto.

Bo Hines, the newly appointed executive director of Trump’s Presidential Council of Advisers on Digital Assets, has indicated that comprehensive stablecoin legislation could be enacted within two months. Hines praised the bipartisan approval of the Guiding and Establishing National Innovation for US Stablecoins Act, also known as the GENIUS Act, by the Senate Banking Committee. This legislation aims to establish clear guidelines for US stablecoin issuers, including collateralization requirements and compliance with Anti-Money Laundering laws. Hines highlighted the bipartisan support for US dominance in the stablecoin space, which he finds encouraging.

In other developments, Ethena Labs and Securitize have launched a new blockchain called Converge, designed to enhance the adoption of DeFi products and tokenized assets. Converge, an Ethereum Virtual Machine, will offer retail investors access to standard DeFi applications and institutional-grade offerings, bridging traditional finance and decentralized applications. The blockchain will also allow users to stake Ethena’s native governance token, ENA, and leverage Securitize’s RWA infrastructure, which has minted nearly $2 billion in tokenized RWAs across various blockchains.

Canary Capital has filed a Form S-1 with the US Securities and Exchange Commission to list an exchange-traded fund tied to Sui (SUI), the native token of the layer-1 blockchain used for staking and fees. This filing underscores the growing institutional interest in digital assets following the success of spot Bitcoin ETFs last year. Canary Capital has submitted six crypto ETF proposals to the SEC, highlighting the increasing demand for institutional access to digital assets. Sui, the 22nd largest crypto asset by market capitalization, recently partnered with World Liberty Financial, a DeFi company backed by Trump’s family.