The U.S. is in a peculiar situation regarding cryptocurrency regulations. It hasn’t yet put into effect the crypto law it already passed, and it’s also struggling to pass the new law that’s needed. On July 18, 2026 – one year after the GENIUS Act was signed – federal agencies missed the deadline to finalize rules for stablecoins. Meanwhile, the CLARITY Act, which would establish broader market rules for crypto, is stuck in the Senate and faces an uncertain future as the August recess approaches.
Despite two major new laws intended to address cryptocurrency, progress in the United States is remarkably slow. While other countries are quickly developing regulations, America seems stuck in neutral when it comes to this rapidly evolving technology.
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GENIUS Act: Passed, Signed, Yet Still Not Operational
President Trump signed the GENIUS Act – which stands for Guiding and Establishing National Innovation for US Stablecoins Act – into law on July 18, 2025. This marked the first time Congress had passed dedicated federal rules for cryptocurrency. The law established how stablecoins would be regulated, requiring them to be fully backed by cash or short-term government bonds, and mandating licensing for issuers, anti-money laundering measures, the right to redeem stablecoins for their face value, and public reporting of information.
The law required regulators to create specific rules within one year, by July 18, 2026, but they failed to meet the deadline. Six government agencies – including the Treasury, FDIC, and Federal Reserve – proposed about ten different rules during that time, however none were officially approved. While some agencies like the OCC, FDIC, and Treasury released initial proposals earlier in the year, several public comment periods are still ongoing, extending past the deadline into August. Notably, the Federal Reserve didn’t even publish its proposed rule.
The Deadline That Doesn’t Bite, And The One That Does
Both GENIUS and the CLARITY Act are facing hurdles. While GENIUS is stalled in the regulatory process, the CLARITY Act hasn’t even become a law yet. The CLARITY Act aims to settle a key question that GENIUS avoided: whether the SEC or the CFTC should regulate crypto assets, with most – including Bitcoin – likely falling under the CFTC’s jurisdiction.
As an analyst, I’ve been tracking this legislation closely. It initially moved well, passing the House in 2025 and getting through the Senate Banking Committee in May. However, it’s hit a snag recently. A combined draft from the Banking and Agriculture committees removed key ethics requirements that Democrats were pushing for, leading three senators to publicly announce their opposition. Looking at crypto prediction markets, the likelihood of it passing in 2026 has dropped significantly – from over 80% in February to around 35% now, which is a concerning trend.
By the start of the third week of July, key details regarding the bill were still missing – a date for it to be debated and the final wording hadn’t been released. With only 14 working days left before the Congressional recess, according to Eleanor Terrett of Crypto in America, who has been following the negotiations closely, ethical concerns continued to be a major unresolved issue.
As a crypto investor, I’m following the news about potential regulations closely. Last Thursday, Trump met with his team – including key people like Susie Wiles and Senators Lummis and Moreno – along with Patrick Witt from the Crypto Council, to discuss rules preventing officials from personally benefiting from digital assets. But as of Monday, it sounds like they still haven’t agreed on the specifics of those rules. Apparently, the White House hasn’t clarified what ethics guidelines they’ll back, and that’s what’s holding up the release of the updated text. What’s frustrating is that Democrats are saying they haven’t been kept in the loop either, which adds to the uncertainty.
The holdup is causing uncertainty throughout the crypto industry, as everyone tries to figure out what changes are being made. Summer Mersinger, CEO of the Blockchain Association, believes key parts of the bill – protections for developers and banking regulations – will likely stay in place, with only minor wording adjustments still being discussed regarding agricultural issues like how exchanges operate and state versus federal laws. However, a recent video from the National Sheriffs’ Association calling crypto “the currency of choice for cartels” has created new challenges. This makes it harder to gain support from Democrats such as Catherine Cortez Masto and Mark Warner, who want assurances that concerns about illegal activity are being addressed. Senator Warner stated he wants the U.S. to be a leader in digital assets, but warns that getting the regulations wrong could have serious consequences.
There’s very little time left for action. Most on Capitol Hill believe negotiators must reach an agreement by the end of this week to start a vote on moving forward with the bill – it needs 60 votes just to begin debate. If the CLARITY Act isn’t debated next week, it will likely be delayed until after the November elections and, according to Senator Cynthia Lummis, possibly not addressed again until 2030.
Why The Dual Delays Compound Each Other
Each delay by itself is frustrating, but combined, they’ve created a significant gap in regulation. The two proposed laws – GENIUS for dollar tokens and CLARITY for everything else – were meant to work together to provide a clear legal framework and resolve conflicts between agencies. However, because GENIUS isn’t finalized and CLARITY hasn’t been passed, neither law is fully effective. This means the US cryptocurrency market is currently functioning based on temporary guidelines and agency interpretations instead of established rules.
The current lack of clear regulations isn’t neutral – it’s actively giving certain companies an edge. While official rulebooks are delayed, federal regulators have been approving national bank charters for a few crypto businesses, effectively changing how the market competes before any comprehensive rules are in place. Circle has already received approval, and others are waiting their turn. This situation means regulators can favor specific companies on a case-by-case basis, benefiting larger firms with strong legal teams instead of establishing fair, consistent standards. Essentially, this isn’t just a lack of policy; it *is* a policy that advantages those who already have influence.
The Global Divergence That Should Worry Washington
The situation demands quick action, as other countries are moving forward with crypto regulation. While the US has faced delays, Japan recently passed laws to allow Bitcoin ETFs and simplified its crypto tax rate. Europe’s new crypto rules are now in effect and have already authorized nearly 300 companies, including banks, to operate. Plus, South Korea plans to quickly approve a law for stablecoins by September.
The US wrote its rules first and is now the jurisdiction struggling to make them work.
Senator Lummis recently warned that delays in establishing clear rules for digital assets mean other countries are setting the standards instead. The recent setbacks with the GENIUS bill and the CLARITY project demonstrate this warning is already coming true.
Three Things to Watch Next
There are three threads over the coming weeks.
- First, whether regulators close their open comment periods, including the OCC’s anti-money-laundering and sanctions rules, whose comment window closes this Friday, and move to final GENIUS rules quickly enough to give issuers a usable runway before January 2027, or whether the compliance crunch tightens further.
- Second, whether Republicans release updated CLARITY text and tee up a cloture vote by the end of this week; miss that, and floor passage before the recess effectively dies.
- Third, and most telling, whether the charter-by-charter approach continues to reshape the market in the rulebook’s absence.
For two years, the U.S. government insisted that clear regulations were key to becoming a leader in the cryptocurrency world. They successfully argued for these rules and even declared their leadership position. However, they haven’t actually delivered what the industry wanted: finalized, active, and consistent regulations. A year after the GENIUS Act passed, those crucial rules are still noticeably absent.
2026-07-20 15:03