BLUF: Happy Crypto Week?
Happy Crypto Week!? Despite a bumpy start, key elements of President Trump’s crypto agenda are gaining momentum, with legislative gridlock in Congress now easing. So, what is ‘Crypto Week’—and why does it matter to national security?
Lawmakers are rapidly advancing a package of crypto-related bills through Congress this week that would establish rules for ‘stablecoins,’ reform how cryptocurrencies are regulated, and block the creation of a U.S. Central Bank Digital Currency. The passage of the GENIUS Act today marks a major turning point in the history of crypto—laying the groundwork for broader adoption of dollar-pegged stablecoins with additional pending legislation promising to clarify the federal government’s stance on digital currency.
If you have no idea what we’re talking about, hang in there, we have more. Stablecoins—digital currencies tied to the U.S. dollar—offer more price stability than cryptocurrencies like Bitcoin, making them viewed as a more practical payment tool by the U.S. government. But they’ve also attracted unwanted attention. Terrorist groups and criminal networks have increasingly utilized stablecoins for their speed, anonymity, and ability to bypass detection in laundering money or moving funds for illicit means.
From Russian operatives skirting sanctions to Hamas financiers acquiring weapons of war, adversarial actors are leveraging stablecoins to evade American sanctions and finance international terrorism. While these cases remain limited, stopping the broader adoption of stablecoins for illicit behavior will require greater attention from the companies and government entities.
Some experts have argued that regulation could actually reduce these risks while providing a key source of financial innovation. But make no mistake, stablecoin adoption poses an emerging national security challenge for the United States—one that the public and private sectors must address together to fully unlock its benefits while mitigating its risks.
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