Knee-Jerk Reaction
Some bipartisan common-sense would be nice.
Senate Democrats rally against crypto bill amid criticism of Trump's ties to the industry
Not every, single thing a President does is wrong. This is true of every President.
Trump went from being a crypto skeptic to a crypto fan. His family is in the business now.
Being for something and then turning against it because it may benefit the President (even if it’s good) is … wrong.
If you want to ensure that crypto development happens offshore, this is one step in that direction.
‘The bill, known as the GENIUS Act, would create a regulatory framework for stablecoins, a type of cryptocurrency tied to the value of an asset like the U.S. dollar. It advanced out of the Senate Banking Committee in March with bipartisan backing, but has since bled Democratic support amid concerns about President Trump and his family's business ventures involving cryptocurrency.
‘The bill passed through the committee weeks before the announcement earlier this month that an Abu Dhabi-backed firm will invest billions of dollars in a Trump family-linked crypto firm, World Liberty Financial. The deal involves the firm buying $2 billion worth of a stablecoin offered by World Liberty Financial, and using it to invest in crypto exchange Binance.
‘The news set off alarm bells for Democrats, who are now pushing for legislation that bans elected officials and their families from buying or selling crypto assets, including stablecoins.
U.S. stablecoin regulation could be delayed as pro-crypto Democrats pull support
Some people don’t like the idea of corporations issuing their own currency with a fixed rate of exchange to the US dollar (at least, that’s how they see it).
‘The Senate Democrats believe that the GENUIS Act needs “stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system, and accountability for those who don’t meet the act’s requirements.”
‘It is worth noting that these nine Senate Democrats are not the only ones opposed to the bill. Senator Elizabeth Warren, one of the bill’s staunchest critics, warned that the bill could “green-light big-tech companies and other conglomerates to issue their own stablecoins.”’
House again tackles regulation of cryptocurrencies
Regulatory uncertainty will hinder US leadership.
‘It creates a path for issuing a digital asset, selling it and raising funds without it being defined as a security under the Securities Act of 1933.
Groups issuing new digital assets that they intend to decentralize would have a process for progressively decentralizing a system.
Teams that believe their blockchain system has matured — such that it's not under the control of any single entity — would be required to make a certification to the commission with various disclosures. The legislation then lays out a timeline where either the certification becomes effective, or the commission can engage in more consideration.’
Crypto regulation bill fails to advance in the Senate
Let’s see if they can go back to the negotiating table.
Don’t hold your breath.
‘Dubbed the GENIUS Act, the bill needed 60 votes to move to the Senate floor for final passage. The final tally was 48 in favor and 49 against. Three senators did not vote.
‘Following the vote, Treasury Secretary Scott Bessent said, “the world is watching while American lawmakers twiddle their thumbs.”’
House Reconciliation Bill Takes Aim At Regulation, But Needs Fixes
It all comes down to language.
As written the REINS act language could end up unintentionally giving Congress a veto over any significant deregulatory move by deeming it to be a “major rule” requiring Congressional approval.
‘Congressional Republicans are moving one step closer to achieving their long-sought goal of overhauling the regulatory state. Tucked into the House Judiciary Committee’s section of the GOP’s reconciliation bill are two clever reforms. One creates automatic sunsets for federal rules and another incorporates a version of the REINS Act, which would require congressional approval for major regulations. These provisions attempt to strengthen legislative control over the administrative state. While the effort is admirable, one of the provisions could easily backfire, ironically making it harder to deregulate rather than easier.’
America’s Self-Defeating AI Export Controls
Bureaucracy is German for “unintended consequences.”
‘Exporting hardware isn’t the same as exporting capability. Cutting off China’s access to American chips might have slowed model development, but it also sharpened Beijing’s skill at diffusion in another way. China now leads the world in open-source AI, and that lead has emerged under constraints that U.S. policymakers imposed. What America blocks temporarily in outputs (models), it enables permanently in inputs (chips).
‘The same pattern already played out in telecoms with ZTE and Huawei semiconductors: Cheaper alternatives undermined U.S. dominance. America should know how this ends.
‘If AI is eating the world, we must ensure that it eats on American hardware and resources. The U.S. should be flooding the world with American GPUs in a concerted way. Untargeted export controls don’t stop adversaries, but they do punish allies and accelerate technical independence from American frameworks. The American strategy should be simple: Let every aligned country run on Nvidia silicon and American standards.’
California regulator weakens AI rules, giving Big Tech more leeway to track you
AI is now too important to regulate. The moment is slipping.
If California is unwilling to grab as much land as possible, the game is close to over.
‘California’s first-in-the-nation privacy agency is retreating from an attempt to regulate artificial intelligence and other forms of computer automation.
‘The California Privacy Protection Agency was under pressure to back away from rules it drafted. Business groups, lawmakers, and Gov. Gavin Newsom said they would be costly to businesses, potentially stifle innovation, and usurp the authority of the legislature, where proposed AI regulations have proliferated. In a unanimous vote last week, the agency’s board watered down the rules, which impose safeguards on AI-like systems.’
Trump administration to overhaul “overly complex, overly bureaucratic” AI Diffusion rule
Simplicite, simplicite, toujours simplicite. That should be our guiding principle.
‘Finalized in January 2025, the AI Diffusion Rule restricts the access of AI chips and AI model weights by countries, determined by a tiered system decided by the US government. However, the regulation attracted widespread criticism from companies when it was first introduced, with Nvidia publicly calling the rule “misguided” and saying it threatened to “derail innovation and economic growth worldwide.”
;According to Reuters, expected changes to the rule include removing the tiers that determine how many semiconductors countries can purchase, replacing it with individual country agreements.
‘Responding to the news that the government is planning to change the rule, Nvidia said it welcomed the new direction on AI policy, adding: “With the AI Diffusion Rule revoked, America will have a once-in-a-generation opportunity to lead the next industrial revolution and create high-paying US jobs, build new US-supplied infrastructure, and alleviate the trade deficit.”’
AI execs used to beg for regulation. Not anymore.
People talk about the tariffs as the big disruption of the Spring, but I’m not so sure.
I think that DeepSeek was far more threatening to American strength.
‘Widespread warnings about AI posing an “existential risk” to humanity and pleas from CEOs for speedy, preemptive regulation on the emerging technology are gone. Instead there is near-consensus among top tech executives and officials in the new Trump administration that the United States must free companies to move even faster to reap economic benefits from AI and keep the nation’s edge over China.’
Sam Altman urges lawmakers against regulations that could ‘slow down’ U.S. in AI race against China
When the facts change, I change my mind. What do you do, sir?
‘In response to Senator Ted Cruz, who asked how close China is to U.S. capabilities in AI, Altman replied, “It’s hard to say how far ahead we are, but I would say not a huge amount of time.” He said he believed that models from OpenAI, Google and others are the “best models in the world,” but added that to continue winning will require “sensible regulation” that “does not slow us down.”
‘That spirit of innovation and entrepreneurship is uniquely American, Altman continued, emphasizing that “none of this is rocket science. We just need to keep doing the things that have worked for so long and not make a silly mistake.” ‘
Sen. Cruz: Adopting Europe’s Approach on Regulation Will Cause China to Win the AI Race
We’ll be hearing more about the “regulatory sandbox” in the coming months, I think.
‘To promote American dominance in AI innovation, Sen. Cruz advocated for a regulatory approach that draws inspiration from how Congress approached the nascent internet. Cruz pointed out how the European Union’s stringent internet regulations, compared to the light touch approach in the U.S., proved costly to Europe’s economy, which is now 50% smaller than the U.S. economy. Sen. Cruz announced he will soon release a new bill that creates a regulatory sandbox for AI — modeled on the approach taken by Congress and President Clinton with respect to the internet — to remove barriers to AI adoption, and prevent needless state over-regulation. The Cruz model will allow the AI supply chain to rapidly grow here in the U.S and beat China in the AI race.
‘China has prioritized AI as a core national objective to gain global influence, and Sen. Cruz warned that America’s global leadership hinges on its ability to build and deploy new technologies more effectively than China. Sen. Cruz criticized the Biden administration for saddling AI startups, developers, and users with needless oversight, thus impeding the U.S.’s ability to innovate and outpace China in technological advancement.
‘Sen. Cruz also praised the Trump administration’s recent action to rescind the misguided Biden-era “AI Diffusion Rule,” which would have severely restricted American companies from exporting AI technology to our allies and limited the global reach of advanced technologies manufactured in the U.S.’