David Sacks speaks at the 2024 Republican National Convention in Milwaukee, Wisconsin. (Photo by Scott Olson/Getty Images)
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David Sacks, the nation’s first AI and crypto czar, held his first press conference on Tuesday alongside four congressional leaders: Senate Banking Committee Chair Tim Scott (R., S.C.), House Financial Services Committee Chair French Hill (R., Ark.), Senate Agriculture Committee Chair John Boozman (R., Ark.) and House Agriculture Committee Chair Glenn “GT” Thompson (R., Pa.). The officials announced a bicameral working group tasked with developing digital asset regulation, with stablecoin oversight and market structure legislation topping the agenda.
Sacks stressed the need for clear rules, criticizing what he described as “four years of arbitrary prosecution and persecution of crypto companies.” His remarks targeted the SEC’s enforcement-driven approach, which many crypto firms claim has hindered innovation and created regulatory uncertainty. He also addressed concerns about “debanking”—crypto startups being denied access to banking services—a controversy reignited last December by venture capitalist Marc Andreessen, who accused Democratic lawmakers of “terrorizing” the industry by pressuring banks to sever ties with crypto businesses.
“This approach was driving this important technology of the future offshore, and we want to keep that innovation onshore,” said Sacks, a South African-American former tech entrepreneur and venture capitalist. “This was a Week One priority for the administration, and we’re excited that our counterparts in Congress are equally committed to ensuring American dominance in digital assets.”
Sacks also mentioned that his digital asset markets working group, established by an executive order from President Trump two weeks ago, is preparing to evaluate the feasibility of a “bitcoin reserve.” The order, however, uses the broader term “digital asset stockpile,” leaving the possibility for the inclusion of other cryptocurrencies.
The press conference spotlighted two bills that could form the backbone of U.S. crypto regulation. One, introduced Tuesday by Senator Bill Hagerty (R., Tenn.), seeks to create a regulatory framework for stablecoins. These novel digital assets are designed to maintain a stable value by being pegged to another asset, such as a fiat currency like the U.S. dollar or a commodity. Some $226 billion is invested in stablecoins currently, mostly those created by two issuers: Tether, based in El Salvador, and Circle, headquartered in New York.
The legislation—co-sponsored by Senators Kirsten Gillibrand (D., N.Y.), Tim Scott, and Cynthia Lummis (R., Wyo.)—is called the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). According to a draft obtained by Bloomberg, the bill mandates that stablecoins be backed by U.S. currency, Federal Reserve notes, Treasury bills, or similarly secure assets.
Stablecoin issuers would face strict transparency requirements, including monthly audited reserve reports, with criminal penalties for false disclosures. Nonbank issuers would fall under the supervision of the Office of the Comptroller of the Currency (OCC).
Additionally, House Financial Services Chair French Hill highlighted the Financial Innovation and Technology for the 21st Century Act (FIT21), a separate bill aimed at clarifying how digital assets are regulated. Under the proposal, cryptocurrencies tightly controlled by their developers or small groups of owners (perhaps like Binance’s BNB, for example) would be overseen by the SEC, while more broadly decentralized tokens like bitcoin and possibly ether would fall under the Commodity Futures Trading Commission (CFTC).
“That bill, I think, had the basics for what we will introduce again in the 119th Congress. There may be some modest changes, but it had bipartisan support. So on the regulatory framework, that will be the approach that the House takes,” said Hill. On stablecoins, I think you’ll see us have a bill that’s very similar to the approach that’s been taken in the Senate,” he added, referencing Hagerty’s proposal.
