The US can’t become the ‘crypto capital of the world’ unless these 6 things change

President Trump’s newfound love affair with cryptocurrencies and his announcement that the United States will become the crypto capital of the world is being applauded as the dawning of a new era. Cryptocurrencies have surged in value, particularly given the president and his family’s entrance into that market.

However, crypto advocates may want to pump the brakes a bit after reading his Jan. 25 executive order — cryptocurrency is an asset like no other and will demand a customized form of regulation.

While the order extols the virtues of digital assets, it also invokes the Washington solution of creating a “working group” of a dozen government entities to “propose a federal regulatory framework” and new “provisions for market structure, oversight, consumer protection, and risk management.” These are hardly words that will comfort crypto libertarians.

The working group can set the tone for the next decade of digital asset regulation, so there are several fundamental principles that should guide it.

First, digital assets such as floating rate cryptocurrencies and stablecoins are unique multiple personality products because they purport to act both as investments and money. Instead of continuing the debate about whether cryptocurrencies are securities or commodities and should be regulated by the Securities and Exchange Commission or Commodity Futures Trading Commission (both charter members of the working group), it should recognize the uniqueness of cryptocurrencies and develop a form of regulation that addresses the new financial benefits and risks they create. Policymakers are wasting time trying to shoehorn cryptocurrencies into obsolete regulatory boxes that already exist rather than the ones they ought to be creating.

Second, if people want to risk their money on speculative investments, digital or otherwise, they should have that right. But crypto and its impact on economic stability is like nothing we have seen before — it doesn’t exist without a computer that can decipher an algorithm embedded in a blockchain of encrypted messages.

Arguing that it is digital gold is far too simplistic a comparison. Some cryptocurrencies like Bitcoin were created by people or groups we can’t even find, and floating-rate crypto coins have no intrinsic value and aren’t tethered to anything that produces income or can be liquidated. Those are hardly characteristics that have traditionally attracted huge amounts of capital.

Third, we often hear that the $3 trillion worth of crypto that has been issued is insignificant, and that if the worst were to happen, and those holders all lost their money, it would not be a problem for the rest of us. That is no longer true.

As more of our traditional securities, payments and financial services markets incorporate unregulated cryptocurrencies into everyday transactions, novel risks are being embedded into those markets. There is a ballooning crypto derivatives market that has been blessed by the SEC and embraced by Wall Street; it now boasts a monthly trading volume of about $1.5 trillion. And if you add to that the leverage and margin created to purchase such crypto products, the industry is clearly approaching a size that could impact global financial security even before you consider its role as money.

Fourth, because cryptocurrencies cannot replicate the price stability and implicit guarantees that government-sponsored fiat currencies offer, they have not yet been able to penetrate traditional retail markets to claim a legitimate role as money. The exception is their preeminent role in financing global crime, including illegal drugs, human trafficking, weapons smuggling, child sexual abuse material and terrorism. The working group must take note. If such unregulated digital assets do fully infiltrate traditional payments systems, impact monetary policy, affect market liquidity and drive legitimate commerce without significant regulation, we risk a global economic crisis if — or when — cryptocurrencies collapse from the weight of their own vagaries and misdeeds.

Fifth, cryptocurrencies have earned their own form of regulation that addresses the growing risks created by their dual personalities. That would normally require today’s banking, securities and commodities agencies to regulate together — an approach that has always been hit or miss at best and will not work with cryptocurrencies. Surprisingly, the president did not place anyone from the bank regulatory agencies on the digital asset working group to provide the financial expertise that none of the other participants have. At the very least, that must change if we are to take its work seriously.

And sixth, while we may cringe at the thought of another agency being created, since we hardly need all that we have in the financial services area today, a new regulator armed with all the requisite expertise may be the best path to crypto financial stability. A sound financial industry needs full and accurate disclosures and adequate levels of capital and liquidity to protect consumers. Those things can only be attained if a smart regulatory system is put in place. Cryptocurrency will never be mainstream if it produces more Sam Bankman-Frieds and Changpeng Zhaos.

Trump’s working group provides a forum to expose the risks that are being created by unregulated digital assets to adult discussion that can lead to a new form of oversight that safely balances their benefits and risks. Our financial future depends on it.

Thomas P. Vartanian, a former senior banking regulator and practicing attorney, is the executive director of the Financial Technology and Cybersecurity Center. He is the author of “The Unhackable Internet” and “200 Years of American Financial Panics.”

Topics

Early Crypto Traders Had Speedy Profit on Trump Coin as Others Suffered Losses

Some traders made tens of millions off a new cryptocurrency launched by President Trump and his sons. Many others lost out.
The New York Times - 1h
Why Soccer Players Are Changing the Way They Use Social Media

Twitter, now X, used to be the go-to place for players to have their say, but the landscape is evolving fast.
The New York Times - 2h
US banks ❤️ private capital

What we do in the shadows
Financial Times - 6h
US overwhelms Virgin Islands 22-0 in Under-17 World Cup qualifier as Chase Adams scores 10 goals

The United States opened expanded CONCACAF qualifying for the FIFA Under-17 World Cup with a record win for the country at any level
ABC News - 7h
Leo Olebe assumes role as chair of Games for Change

Games for Change said Leo Olebe will be the new chair of the board of directors for the nonprofit dedicated to social impact games and media.
VentureBeat - 1d
The Untold Story of a Crypto Crimefighter’s Descent Into Nigerian Prison

As a US federal agent, Tigran Gambaryan pioneered modern crypto investigations. Then at Binance, he got trapped between the world’s biggest crypto exchange and a government determined to make it pay.
Wired - 1d
The World Cup kiss that's gripping Spain

Spain's former football boss accused of sexual assault for kissing player Jenni Hermoso
BBC News - 1d
This firm has been bullish on crypto for two years — now it’s calling a top

Analysts at BCA Research say there’s all the classic signs of a top in crypto.
MarketWatch - 3h
Nick Robinson's X account hacked to promote crypto

The Today programme presenter said his login details were stolen after he clicked a link in a fraudulent email.
BBC News - 5h
EU plans radical budget overhaul handing more power to capitals

Bloc’s 50 spending programmes to be lumped into 3 funds, according to paper
Financial Times - 12h
HIV infections could jump over 6 times if US support is dropped, UNAIDS chief says

The head of the U.N. AIDS agency says the number of new HIV infections could jump more than six times by 2029 if American support of the biggest AIDS program is dropped
ABC News - 1d
Sudan army plans new government as it advances in capital

Yahoo News - 1d
The Eagles shifted their philosophy, signed Barkley and changed the NFL

Philly saw things different than the rest of the NFL, thanks to Saquon Barkley.
ESPN - 1d
Trump says Canada joining US 'would be greatest thing they could ever do'

President Trump on Sunday argued that if Canada were to join the United States, it would be the greatest thing the neighbors to the north could do. “I love the people of Canada. We have a great ...
The Hill - 1d
Should The NHL Change Its Playoff Format?

If you’ve grown tired of the NHL’s wild-card playoff format, there are a few other options worth considering.
Yahoo Sports - 1d
China’s US tariffs become a reality

Plus, Mandelson becomes the UK’s man in Washington while political and business leaders debate AI developments in Paris
Financial Times - 1d
A Met Museum guard becomes a star

Artist Armia Khalil emigrated to the U.S. from Egypt with nothing but $400 and a suitcase of sculpting tools. When his dreams of becoming a professional sculptor didn't work out, he got a job as a ...
CBS News - 2d
Becoming a TV commercial icon

You know them as Flo, the Progressive Insurance saleswoman; Mayhem, the human embodiment of disasters covered by Allstate; and the unstoppable dancer from the Jardiance diabetes drug ads. ...
CBS News - 2d
Time Management 101: 6 Tips Highly Successful Leaders Use Daily

Research shows that only 18 percent of people actually use a time management system.
Inc. - 2d
Flat whites or long blacks? What our changing coffee tastes say about us

From a 13th-century Yemen brew to the latest full-on blast of beans, the quest for the perfect caffeine hit continues. When a man called Jacob opened what’s thought to be the first British coffee ...
The Guardian - 2d
Can $400 Million Rescue New York’s Run-Down Capital City?

Gov. Kathy Hochul has proposed to earmark $400 million to revitalize the capital of New York, where poverty rates are high and the downtown is moribund.
The New York Times - 2d
The end of insurance: Climate change is destroying homeowners and insurers

Traditional insurance models aren’t able to handle escalating natural disaster risks.
MarketWatch - 2d
US skier Breezy Johnson wins shock downhill gold at world championships

American wins surprise gold medal after 14-month ban Lindsey Vonn finishes in 15th place in comeback at age 40 Her top speed of 86mph (138.51kph) was among the fastest ever recorded by a woman ...
The Guardian - 3d
European Capitals of Culture Gorizia, Nova Gorica hold opening parade

Yahoo News - 3d
17 things Trump and his team did this week

In his third week back in office, Trump took action on issues from transgender competitors in women's sports to Gaza.
BBC News - 3d
US skier Breezy Johnson wins gold in the women's downhill at the Alpine world championships

American skier Breezy Johnson has won gold in the women’s downhill at the Alpine skiing world championships
ABC News - 3d
How Morocco Became the Meteorite Hunting Capital of the World

Since the “Saharan Gold Rush” in the 1990s, one researcher has been fighting for the North African country’s contributions to science to be recognized.
Wired - 3d
What is to become of the Great British Garden Centre?

Unreliable weather and patchy trading have led to a wilting of gardening sales — but tea and cakes may yet save the postwar institution
Financial Times - 3d
Taubitz wins women's luge world title and Sweeney grabs a bronze for US

Germany’s Julia Taubitz is the women’s singles luge world champion for the second time
ABC News - 3d
What's next for USAID workers amid Trump changes

A federal judge on Friday temporarily blocked the Trump administration from putting 2,200 U.S. Agency for International Development employees on leave. However, the White House still has the agency ...
CBS News - 3d
Dominant First OHL Season Suggests Sky Is The Limit For Washington Capitals' Prospect

Belarussian forward Ilya Protas is flying high as a member of the Windsor Spitfires.
Yahoo Sports - 3d
Sudanese military reports sweeping gains in battle for capital

Army making rapid advances across the country and closing in on RSF-held Republican Palace in Khartoum. Sudan’s brutal civil war appears to be approaching a decisive phase as the country’s military ...
The Guardian - 4d
The 6 Best Handheld Vacuums, Tested and Reviewed (2025)

Lightweight, powerful, and generally inexpensive, the handheld vacuum is the perfect household helper.
Wired - 4d
Pakistan to Force Tens of Thousands of Afghan Refugees Out of the Capital

The order, giving Afghans until March 31 to go elsewhere in Pakistan, came on the heels of President Trump’s suspension of refugee admissions to the United States.
The New York Times - 4d
The Founder’s Leap Relies on 2 Things

Given the time and money involved with startups, nail down your “why” and know yourself.
Inc. - 4d
The Physics That Keeps a Crowd From Becoming a Stampede

A group of scientists studying the San Fermín festival in Pamplona, Spain, believe there’s a way to predict the motions of a large crowd.
The New York Times - 6d
Has the Coronavirus Pandemic Changed Your Relationship to Grief?

The New York Times is interested in exploring how the response to loss may have changed in the last five years.
The New York Times - 6d

More in Politics

Aguilar says Democrats would oppose spending bill with Department of Education cuts

Rep. Pete Aguilar, D-Calif., said that House Democrats would vote against a government funding bill if it included cuts to the Department of Education. Aguilar claimed Republicans "don't care about ...
NBC News - 32m
How to ensure Trump's new inspectors general are watchdogs, not lapdogs

It is critical that President Trump nominate qualified individuals to those positions — not just in the sense of technical competence, but also in their willingness to conduct fair, objective and ...
The Hill - 38m
Federal employees deserve respect — not Elon Musk

In the name of “efficiency,” the Trump administration is waging a cruel war on federal employees, who now live in chaos and fear.
The Hill - 1h
'Significant inaccuracies' found in AI-generated news summaries: BBC

The BBC issued a February report that found “significant inaccuracies” with news summaries generated from artificial intelligence (AI) engines including OpenAI's ChatGPT, Microsoft's Copilot, ...
The Hill - 1h
Canned tuna sold at Walmart, Trader Joe's, Costco recalled in multiple states

The U.S. Food and Drug Administration has announced a recall on canned tuna products sold at several different retailers including Walmart, Trader Joe's, Kroger, and Costco.
The Hill - 1h