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Defi has just won his largest American policy victory.
President Trump signed the genius law in the law on Friday, as a result of which the first federal framework for the regulation of the Stablecoin was determined. The law defines clear standards for reservebacking, consumer protection and AML compliance, while cutting paths for both national and federally chartered issents. Defi Education Fund (Def) called it a “milestone” moment for Onchain Finance.
It is important that Genius federal supervision of identifiable, custodial stablecoin issuing settings for leaving behind, while he is largely left out of self-wide portfolios and other non-rising onchain activities. This makes way for broader market structure rules (clarity) that are aimed at distinguishing decentralized protocols of centralized intermediaries.
In the meantime, the house approved the Clarity Act with important changes that reversed the last-minute language changes that had caused the protest among Defi-builders and policy experts. The amendment of the manager of HFSC chairman French Hill (R-AR) and attorney-general chairman GT Thompson (R-PA) restored and clarified the Defi-carve-outs in both the effects (§309) and raw materials (§409) titles of the bill.
The last house text now explicitly excludes activities such as publishing code, operating frontends, performing validator nodes or providing portfolios of registration requirements, as long as they do not include custody or control of user assets. The Defi exclusion of the Commodity Exchange Act is again wide enough to cover the most non-right spot market activity.
Rep. Hill: “Defi developers do not take custody of user assets, nor do they control user assets. That is why we should not treat them in the same way as we treat centralized actors.”
Rep. Thompson added: “Congress makes an unambiguous explanation that Defi is different.”
These are important articulations of the intention of the congress.
Yet two openings remain. Firstly, the carve-outs do not extend to derivatives, leaving defi-derivatives protocols in legal Limbo.
Secondly, the Clarity Act lacks federal pre-emption, which means that state rulers can still impose conflicting requirements.
The Hill-Thompson Fix, however, moves clarity away from a potential threat and in the category of a qualified victory for Defi.
