Genius Act, Clarity Act, Crypto Week, and Why It All Matters — Barrons.com

By Elsa OhlenThis "Crypto Week" may bring transformational changes to the digital- assets sector as three pieces of legislation move through Congress."If passed, the bills could open the floodgates for new crypto use cases, corporate adoption, and institutional investment," Benchmark analyst Mark Palmer told Barron's Tuesday.Here is a breakdown of the bills and why they matter:What are the bills being considered?The Digital Asset Market Clarity Act is widely seen as likely to have the biggest effects. It lays out a framework to categorize digital assets as either commodities, to be overseen by the Commodity Futures Trading Commission, or securities, under the jurisdiction of the Securities and Exchange Commission.The Clarity Act would address confusion over what asset class cryptocurrencies belong to, an issue that has left entrepreneurs and investors in limbo, Coinbase Chief Policy Officer Faryar Shirzad told Barron's via email.The Genius Act, which passed the Senate in June, would regulate stablecoins. These coins are pegged to a fiat currency, typically the U.S. dollar, and can be used to execute transactions faster and more efficiently. The bill would require that the coins be backed by safe, liquid assets like cash or Treasury debt, and create a path for banks to issue their own stablecoins.The third piece of legislation, the Anti Central Bank Digital Currency (CBDC) Surveillance State Act, is meant to address concern that if cryptos become an integral part of the financial system, it could create a scenario where authorities are able to control or monitor the activities of citizens and institutions. Access to how people use digital currencies could potentially provide a lot of data about them.While some states have already put in place their own restrictions, the act would bring that to the federal level by preventing the Federal Reserve from issuing a central bank digital currency.What would it mean for crypto prices and stocks?Bitcoin hit a record high of more than $120,000 earlier this week. A big reason was expectations that these bills will bring about a positive outcome."These bills reduce regulatory ambiguity, and that's a strong tailwind for crypto assets and for publicly traded companies with exposure to the space," said Coinbase's Shirzad. "If you're an investor...that reduces headline risk [and] opens the door for more institutional capital."Palmer noted that Coinbase and Galaxy Digital, companies that have been building infrastructure to serve institutions, look particularly well-positioned to gain from the proposed bills. He rates both stocks Buy with price targets of $421 and $28, respectively.Write to Elsa Ohlen at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.