"Crypto week" in Congress.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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What happened, and what’s happening.

Lately, a lot of contributors from the Tangle team have stepped up to produce some great Friday pieces. Our Editorial Fellow Hunter Casperson wrote a deep dive on genetic modification, Editor-at-Large Kmele Foster authored an essay on America’s racial reckoning, and Managing Editor Ari Weitzman contributed an exploration of how the latest climate models differ with public understanding. However, no piece drove more engagement than Executive Editor Isaac Saul’s five things he got wrong about Trump. This Friday, Isaac is going to follow up with five things he’s gotten right — so far.

Quick hits.

1. The Israeli military expanded its ground operations in central Gaza, raiding a World Health Organization building and ordering residents of the city of Deir al-Balah to evacuate. Israel had previously avoided operations in the area out of concern that Hamas was holding hostages in the city. (The operation)
2. The Trump administration released approximately 240,000 pages of records of the Federal Bureau of Investigation’s surveillance of Martin Luther King Jr., which had been sealed since 1977. (The release)
3. The Department of Defense ordered 700 Marines to leave Los Angeles approximately one month after they were deployed to the city in June to support Immigration and Customs Enforcement’s deportation operations amid protests. (The withdrawal)
4. A district judge sentenced former Louisville police officer Brett Hankison to 33 months in prison for violating the civil rights of Breonna Taylor, who was killed in her home in a police raid in 2020. The judge rejected a last-minute request by the Justice Department to give Hankison a one-day sentence. (The sentence)
5. A district judge appeared skeptical that the Trump administration followed proper processes in canceling $2.2 billion in federal research funding for Harvard University. The judge also questioned the administration’s claim that antisemitism on Harvard’s campus justified the cuts. (The case)

Today’s topic.

The crypto bills. On Friday, President Donald Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, the United States’s first major cryptocurrency legislation. The new law establishes a legal category and regulatory framework for stablecoins, a type of cryptocurrency whose value is tied to a reference asset, like the price of gold or the U.S. dollar. As a result, banks, nonbanks, and credit unions will be able to participate in the stablecoin market and issue their own digital currencies. At a signing ceremony on Friday, President Donald Trump said the bill “creates a clear and simple regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins. This could have been perhaps the greatest revolution in financial technology since the birth of the Internet.”

In addition to the GENIUS Act, the House voted on Thursday to pass the Digital Asset Market Clarity Act (CLARITY Act), to further regulate digital assets, and the Anti-CBDC Surveillance State Act, to prevent the Federal Reserve from issuing its own central bank digital currency (CBDC). The Senate is now considering both bills. 

Back up: On July 3, the House Committee on Financial Services Chairman and Republican House leadership announced the week of July 14 would be “Crypto Week,” in which the chamber would consider all three cryptocurrency bills in an effort to pass the nation’s first significant legislation on the sector. Trump criticized crypto during his first term but changed course during the 2024 campaign and launched his own cryptocurrency shortly before his inauguration. 

In June, the Senate passed the GENIUS Act 68–30. On Thursday, the House voted 308–122 to pass the GENIUS Act, with all but 12 Republicans in support; 102 Democrats voted in favor, while 110 voted against. The CLARITY Act and Anti-CBDC Surveillance State Act passed the chamber with smaller margins — 294–134 and 219–210, respectively. 

Earlier in the week, votes on the bills were significantly delayed after a group of conservative House Freedom Caucus members blocked a procedural vote to begin debate on several bills for approximately nine hours. The holdouts sought to link the Anti-CBDC Surveillance State Act with the other two bills out of concern that the Senate would otherwise only pass the GENIUS and CLARITY Acts, arguing that the third bill was critical to addressing privacy concerns over the federal government’s regulation of digital assets. House leadership eventually reached a deal with the members by promising the anti-CBDC bill would be linked to Congress’s annual defense policy bill. 

While the GENIUS Act passed both chambers of Congress with bipartisan support, some Democrats criticized the bill over concerns that it represented a conflict of interest for President Trump. “The Genius Act will accelerate Trump’s corruption by supercharging the size of the stablecoin market and the reach and profitability of Trump's USD1,” Sen. Elizabeth Warren (D-MA) said in May. “For the first time in American history, this bill will make our President, Donald Trump, the regulator of his own financial product.”

Today, we’ll share views on the legislation from the right, left, and finance industry. Then, my take.

What the right is saying.

• The right supports the bill, arguing it will offer everyday Americans new financial opportunities. 
• Some say the Senate’s vote on the CLARITY Act will determine how impactful the GENIUS Act is. 

In The Washington Examiner, Steve Cortes called the GENIUS Act “key to protecting your wallet and preserving the dollar.”

“The GENIUS Act will produce safe, legal, digital dollars — called stablecoins — that are tied 1:1 to the real U.S. dollar. It will keep America’s money strong and competitive with the currencies of adversarial nations such as China. Right now, trillions of dollars flow across borders every day. More and more of that is happening digitally. If America doesn’t lead in this space, someone else will, and we might not like the results,” Cortes said. “China understands this. That’s why its own stablecoin law takes effect in August.”

“If the dollar loses its edge, everyday Americans will be the first to suffer. When the world stops using the dollar as the standard for trade and finance, it risks weakening America’s purchasing power, fueling inflation, and raising the price of just about everything,” Cortes wrote. The bill “doesn’t hand the reins to Washington bureaucrats or the Federal Reserve. Instead, it encourages private companies, backed by American money and American law, to produce these much-needed digital assets. This is exactly the kind of solution conservatives should rally behind.”

In The Dispatch, Alex Demas and Charles Hilu said the bill’s passage “represents a major milestone for crypto regulation.”

“For the crypto industry, the passage of the GENIUS Act is a major milestone on the path to legitimization and broader adoption of digital currency among both consumers and traditional financial institutions,” Demas and Hilu wrote. “In the wake of the collapse of the crypto exchange FTX, the Biden administration took a combative stance toward the crypto industry, opting to prosecute large crypto firms for fraud and securities violations rather than encourage legislative action… Still, Congress has made progress on the issue despite concerns about Trump’s ties to it. The bipartisan GENIUS Act signals a change in how the industry will be regulated moving forward — away from reactive prosecution and toward proactive legislation.”

“Stablecoin legislation is a major milestone, but it’s also only the first step down a long and complicated regulatory road for the crypto industry. The main event moving forward will be the CLARITY Act, a market structure bill designed to regulate the broader crypto ecosystem,” Demas and Hilu said. “Under current law, there is no clear guidance on when a digital asset is a security and when it is a commodity, meaning the industry faces widespread uncertainty as to which agency regulates products and what compliance entails. The CLARITY Act seeks to establish the rules of the road and clarify the SEC’s and CFTC’s roles in regulating digital assets.”

What the left is saying.

• The left is skeptical of the bill’s value, suggesting that it fails to address key concerns about integrating crypto into traditional financial markets. 
• Others criticize House Republicans for acquiescing to Trump’s will despite principled objections to the legislation. 

In Bloomberg, Allison Schrager wrote “regulating stablecoins will take a genius act, and this isn’t it.”

“While there is a need for some regulation, as some retailers are considering issuing their own stablecoins, mainstreaming the cryptocurrency is hardly a genius move,” Schrager said. “Cryptocoin issuers are very similar to the banks of the 1830s, which also issued their own currencies and were regulated by the states. In a similar spirit, under the Genius Act, companies that issue less than $10 billion worth of coins would also be regulated by the states, while the Federal Reserve would regulate bigger issuers.

“The thing about the 1830s, from a financial standpoint, is that they were very chaotic. Constant oversight was necessary, because any hint of currency devaluation created bank runs and failures. States had different standards, and several underregulated their local banks — creating a lack of confidence in the system,” Schrager wrote. “Mainstreaming stablecoins also poses risks to the financial system. Stablecoin issuers are already becoming a major source of demand for US Treasuries. Tether purchased more than $33 billion of them last year and now owns more than Germany. If the market takes off, some banks estimate stablecoin issuers could be a captive buyer for trillions of dollars in Treasuries.”

In The American Prospect, David Dayen suggested “crypto week revealed the dittohead congress.”

“For a moment, it looked like ‘Crypto Week’ was poised to become the national punch line that ‘infrastructure week’ was in Trump’s first term. For two straight days, Freedom Caucus members blocked the rule for debate in the House that set up votes on three bills,” Dayen said. “Leaders of the House committees with jurisdiction over crypto… wanted to put their stamp on these bills, and even bundle them together into one big crypto package. But Senate leaders warned this would mean nothing would pass, and the House leadership backed up their colleagues in the other chamber.”

“That meant that the Freedom Caucus’s priority—the anti-CBDC bill—could be abandoned in the ping-ponging between the House and Senate. So the Freedom Caucus held up the rule… But hours after this got going, it was over. The House agreed to link the anti-CBDC bill to the National Defense Authorization Act, a perennial must-pass package. But unlike virtually everything else in Congress, the NDAA goes through a conference committee where priorities often fall out,” Dayen wrote. “It’s time to stop calling the Freedom Caucus ‘hard-liners.’ They fall over in a mild breeze and everybody knows it. The rest of the House Republicans got rolled as well: The Senate isn’t very likely to take up their CLARITY Act, and they had to eat the Senate’s GENIUS Act without changes.”

What the finance industry is saying.

• Some in the crypto industry say the bill is a great first step, but more legislation will eventually be needed. 
• Others suggest the bill will help improve the global financial system.

In Cointelegraph, Bill Hughes said the “CLARITY Act isn’t perfect” but supported its passage.

“Some critics believe CLARITY is nothing more than an early Christmas gift to the crypto industry. That simply is not true. Lawmakers have urged the crypto industry to walk the walk in the US, not just talk the talk when it comes to regulation. At the same time, the blockchain industry has insisted on smartly tailored rules applying to disintermediated computer networks,” Hughes wrote. “CLARITY meets both challenges and more, as it sets a high bar for decentralization and an aggressive timeline for projects to meet it. This is a good result.”

“CLARITY is not a sweetheart deal. There are some provisions with which the blockchain world categorically disagrees. For example, a recent draft does not permit blockchain developers to make software that facilitates peer-to-peer transactions in commodity futures and derivatives products. Those markets would remain intermediated,” Hughes said. “That would be a mistake, but one that can hopefully be fixed by amendment or future policy efforts. No bill is perfect. This bill will have bad provisions regardless of how hard sponsors work on it.”

The PYMNTS staff wrote the “GENIUS Act makes stablecoins business-ready.”

“Stablecoins were never meant to replace your credit card at the corner store. That’s a nice story for crypto optimists, but it misses the real utility taking shape in the shadows of the global economy. Where central banks wobble, currencies inflate and cross-border wires take days, stablecoins offer something more basic: a dollar global firms can actually use,” the staff said. “Stablecoins aren’t exactly poised to upend Visa. It’s tremendously unlikely that they could replace the dollar. But they might just change how global enterprises access, store and move that dollar — especially in places where trust is scarce and banking is broken.”

“Stablecoins aren’t competing with existing payments infrastructure. They’re integrating with it. Just as the internet didn’t replace telephony overnight but made it digital (VoIP), stablecoins digitize and modernize how value moves, even if the user interface (Visa card or Apple Pay) stays the same,” the staff wrote. “Still, risk remains. Not all stablecoins are equal. Tether, for example, has long avoided full disclosure on its reserves. The GENIUS Act will force clarity — at least for U.S. issuers.”

My take.

Reminder: “My take” is a section where I give myself space to share my own personal opinion. If you have feedback, criticism or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

• As someone who has benefited from crypto, I’ll say that I’m glad Congress is starting to regulate the industry.
• However, the law’s protections pale in comparison to its vulnerabilities.
• I don’t want the industry to be defined by a few highly visible fraudsters, but we need stronger regulation to protect investors.

First, let me start with the same disclosure that I gave in March when we wrote about the potential for a cryptocurrency reserve: In 2014, I was a journalist living paycheck-to-paycheck in Harlem when a friend tried to convince me to invest in Ethereum, one of the burgeoning cryptocurrencies of the time. I resisted until he made me an offer I couldn’t refuse: He matched my $1,000 with $1,000 of his own, on the promise that if (or when, according to him) my investment multiplied by 10, I’d take him on an all-expenses-paid trip to Europe. I trusted him and took the leap; a year later, our $2,000 was worth $120,000.

The timing was perfect. I cashed out most of my cryptocurrency, bought some land in West Texas, invested the rest in the stock market, and relied heavily on it as a safety net when I launched Tangle. Cryptocurrency changed my life; it handed me the kind of wealth and headstart I never would have gotten otherwise — not from work, family, or anything else. I’m incredibly lucky, and grateful, that this was my crypto experience — especially when so many other people have been scammed or taken advantage of. I share this both as a journalistic disclosure (I still own cryptocurrency) and to explain how my experience biases the way I see many of these stories. 

In March, I explained why I thought the crypto reserve idea was very bad: It opened the door to cartoonish levels of corruption; it played favorites; it was hated by even the most optimistic crypto enthusiasts; and it was very clearly designed to benefit Trump, his family, and his friends. The GENIUS Act has a very different design. Rather than invest the government into cryptocurrencies, the bill brings order to the market. It more directly reduces uncertainty in this space, creates a rulebook for stablecoins, and ensures that many cryptocurrencies will be backed by the U.S. dollar. In simple terms, this is the act that brings “clarity.” However, it is going to have the same main effect that the reserve would have: It will juice the cryptocurrency market and make anyone holding cryptocurrency (myself included) a lot more money.

In a lot of ways, the GENIUS Act’s achievements are obviously good. The crypto industry spent four years begging President Biden and Congress to help them regulate the space and got hostility in return — the crypto company Coinbase literally sued the Securities and Exchange Commission (SEC) just to get clarity on the rules. This administration, and this Congress, are at least trying to provide some structure. Now, hundreds of millions of people who own crypto across the world stand to benefit from the stability that regulation could provide. 34% of crypto owners are 25–34 years old, according to the digital payments company Triple-A, which means a spike in cryptocurrency prices (and some stability in the markets) could create a new generation of wealth. 

The GENIUS Act introduces some new protections into the market, such as requiring holders of stablecoins to keep money in safe reserve assets and ensuring stablecoin issuers observe some money laundering laws. The law has real, enforceable provisions: It forbids stablecoin issuers from making false claims about their security, includes bankruptcy provisions to protect stablecoin holders, and requires the Department of Treasury to work with the Financial Crimes Enforcement Network (FinCEN) to issue hard regulation on crypto within three years. These are unambiguously helpful guardrails.

However, the law’s protections are overshadowed by its vulnerabilities. First, as Tulane professor Ryan Peters explained, nothing in the recently passed legislation provides sufficient measures to create more transparency and consumer protection. Instead, issuers of these stablecoins will be able to effectively function as banks, but without the same kind of security and assurances for consumers. Corey Frayer, the director of Investor Protection for the Consumer Federation of America, made a simple point about why the GENIUS Act doesn’t go nearly far enough.

“The reason you would never recommend grandmother use a stablecoin is she would have to give away a dollar that’s protected by the federal government and deposit insurance, and which comes with a ton of consumer protections, and which pays interest in her banking account, in exchange for a stablecoin that doesn’t have any of those things,” Frayer told NBC. 

Second, the conflict-of-interest provision included in the GENIUS Act only applies to members of Congress and senior executive branch officials, not the vice president or president. This is particularly relevant given that President Trump is currently ballooning his wealth (to the tune of $3.3 billion) through cryptocurrencies. As I’ve written previously, the Trump crypto push is one of biggest presidential scandals I can remember — yet it gets a fraction of the attention it deserves. To highlight just one example: The Trump family is the majority owner of World Liberty Financial, a crypto startup co-founded by Zach Witkoff, the son of Trump’s Middle East envoy Steve Witkoff. World Liberty Financial issued a new stablecoin, “USD1,” in March. That stablecoin is about to get way, way more valuable on the heels of legislation Trump is signing (not to mention, it was already conveniently selected by an Abu Dhabi investment firm for a $2 billion investment).

The other crypto bill recently passed by the House — the CLARITY Act — is even more worrisome. Its fate is still uncertain in the Senate, but if passed, it will allow cryptocurrencies to mature to a “commodity” stage where they will no longer be regulated by the SEC, which is bound to create more bad behavior in the industry. Every contact I have in the cryptocurrency sector effectively told me “this is good for us,” in the sense that it will create less oversight in the long term. 

I’m certainly happy the government is allowing some innovation in the space to flourish and defining clear rules without being too heavy handed. But this isn’t 2017; crypto is less an emerging industry than a space with a proven track record as a playground for fraud. Thieves and scammers are omnipresent, the landscape is choked by memecoins and even though the government has finally provided guardrails, it is still not doing enough to protect consumers from these dangers — especially those desperate to make a quick buck or build up their savings. 

Any new legislation must introduce regulations that deal with these realities, or a lot more people are going to get hurt. Unfortunately, I think these bills ultimately fall short.

Like any law, the GENIUS Act is a decidedly mixed bag. It is a good step forward to regulate an industry that needs it and obviously isn’t going anywhere. New opportunities to reduce payment fees or globalize the digital economy further abound. The value of digital currencies will spike and benefit a lot of people who hold crypto. I’m glad for all of this. And I should also say clearly that the crypto space broadly shouldn’t be punished with too strict regulation because of its worst actors, or because Trump is taking advantage of this moment for his own personal gain. Nor should it be punished for spending hundreds of millions of dollars lobbying Congress the same way every other industry does. 

At the same time, if the Treasury and FinCEN don’t develop toothy regulations — especially ones that can protect investors — this bill will function as a green light for some of the worst actors to get much richer much more quickly while taking advantage of a lot of people who don’t understand cryptocurrencies or recognize the risks they present. Unfortunately, that is a lot of people. 

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Your questions, answered.

Q: It’s obviously apparent our climate is changing and oceans are getting warmer. But, is the cause atmospheric carbon emissions etc. or core of the earth emissions for example from the massive Hunga Tonga undersea volcano eruption 01/15/2022 after which there are all kinds of bizarre climate changes?

— Kamp from Rapid City, SD

Tangle: One technique we used in our Friday edition on climate change was what our Editor-at-Large Kmele Foster calls “Marley’s Razor” (after the late great Bob Marley), which states I may have shot the sheriff, but I did not in fact shoot the deputy. Using Marley’s Razor, we can say that while one thing may indeed be true, it does not mean that something else it implies is also true. We can use the sheriff/deputy technique again here.

Sheriff (true): As several people wrote in to say, the Hunga Tonga volcano that erupted off the coast of Tonga in January of 2022 caused a massive change in the local environment. The Chinese Academy of Sciences said that local readings of atmospheric CO2 increased by two parts per million, the equivalent of a year’s worth of global emissions. Furthermore, the National Oceanic and Atmospheric Association (NOAA) found that the ozone layer above the volcano had massively depleted, and the volcano had released about 150 million tons of water vapor — the gas responsible for the most heating of any greenhouse gas — into the atmosphere.

Deputy (not proven): However, this massive eruption is not responsible for warming the planet. Even though Hunga Tonga released a massive amount of carbon into the atmosphere for a single event, on an annual global scale it barely registered. Volcanologist Simon Carn estimated it released 2–5 million tons of CO2; meanwhile, humans emit roughly 36.8 billion tons of CO2 every year (at least 73,600 times more). 

Additionally, even though water vapor is a powerful greenhouse gas, it is very short-lived in the atmosphere and tends to dissipate quickly. And as we wrote Friday, since atmospheric aerosols tend to reflect light away from the planet, volcanic eruptions often have a net cooling effect overall. Researchers from Texas A&M, UCLA, the Science and Technology Corporation in Maryland, and NASA all found that the Hunga Tonga eruption caused very slight cooling overall in the Southern hemisphere in 2022. 

In short, even though a single volcano emits a massive amount of CO2, the particulate matter it expels produces more cooling through reflection than heating through the greenhouse effect — and the net effect of volcanization on global emissions annually is not significant.

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Under the radar.

On Thursday, a tank shell struck the Holy Family Catholic Church in Gaza, killing three people and wounding 10 others. Israel said the strike was an accident and apologized, but the incident prompted rebukes from faith leaders across the globe. On Friday, Cardinal Pierbattista Pizzaballa, the Latin patriarch of Jerusalem, and Theophilos III, the Greek Orthodox patriarch of Jerusalem, led a delegation to the compound to assist with rescue efforts at the church, which has provided aid and shelter for Christians and Muslims in Gaza during the Israel–Hamas war. Furthermore, Pope Leo XIV spoke to Israeli Prime Minister Benjamin Netanyahu by phone and “reiterated the urgent need to protect places of worship and, especially, the faithful and all people in Palestine and Israel,” according to the Holy See Press Office. The Hill has the story.

Numbers.

• $20 billion and $246 billion. The approximate total market value of stablecoins in 2020 and May 2025, respectively. 
• $161 billion. The approximate market value of Tether’s stablecoin.
• $64 billion. The approximate market value of Circle’s stablecoin.
• $6.9 billion. The estimated value of President Donald Trump’s personal cryptocurrency holdings as of June, according to a Bloomberg analysis.
• $620 million. The estimated amount that Trump’s cryptocurrency holdings have added to his net worth in recent months. 
• 17%. The percentage of Americans who say they have ever invested in, traded or used a cryptocurrency, according to a February 2024 Pew Research poll. 
• 63%. The percentage of Americans who say they have little to no confidence that current ways to invest in, trade, or use cryptocurrencies are reliable and safe.

The extras.

• One year ago today we published a special edition on Joe Biden dropping out of the presidential race.
• The most clicked link in yesterday’s newsletter was Isaac’s viral tweet about President Trump drawing.
• Nothing to do with politics: Scientists have learned that “squirting cucumbers” can actually aim.
• Yesterday’s survey: 3,958 readers responded to our survey on Trump’s alleged 2003 note to Jeffrey Epstein with 87% saying they believe Trump wrote the letter. “I believe your take that the WSJ performed extensive fact checks before publishing the story,” one respondent said.

Have a nice day.

Two people rowed into harbor in Hilo, Hawaii, late Sunday night: 53-year-old UK Special Forces veteran Tim Crockett and his 18-year-old son Harrison. The two had just spent the past 48 days on the ocean, rowing from Sausalito, CA, on June 3 and crossing 2,400 nautical miles. Tim and Harrison are the first father and son duo to row the mid-Pacific crossing, and Harrison is now the youngest to do so. Next up for them: launching a program to raise funds for veterans with PTSD and traumatic brain injuries called “Row to Recovery.” SFist has the story.

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