Crypto assets are soaring high in light of the U.S. government deciding to back and regulate it.
The total market value of crypto assets surged past $4 trillion for the first time, driven by a rally in altcoins and momentum from a sweeping U.S. legislative push to regulate the sector.
Part of this surge can be attributed to the recent federal legislation for stablecoins, a major win for President Donald Trump.
Stablecoins are digital currencies designed to maintain a stable value by being pegged to assets like the U.S. dollar. Their growing use in payments, decentralized finance, and banking has attracted significant regulatory attention in the United States. In response, Congress is actively working to establish federal legislation that clarifies the legal status of stablecoins and imposes necessary safeguards.
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Key proposals focus on requiring issuers to hold 100% reserves in safe, liquid assets and providing holders with clear redemption rights. These measures aim to protect consumers, ensure transparency, and prevent financial instability. Bipartisan bills such as the Stablecoin Transparency Act and the Digital Commodity Exchange Act are under discussion, proposing oversight by banking regulators or the SEC depending on the stablecoin’s structure.
The bill, backed by Republicans and championed by President Trump, introduces federal or state oversight of dollar-linked stablecoin, aiming to legitimize a $265 billion market that Citigroup Inc. analysts project could grow to $3.7 trillion by 2030.
The President’s Working Group on Financial Markets (PWG), including the Treasury, Federal Reserve, SEC, and FDIC, has called on Congress to pass legislation to regulate stablecoins effectively. Meanwhile, the Federal Reserve is exploring the issuance of a Central Bank Digital Currency (CBDC), which could impact the stablecoin market and legislative priorities.
Lawmakers face challenges balancing innovation with risks such as fraud, liquidity crises, and systemic risk. Although some details remain unsettled, most experts expect federal legislation on stablecoins to be enacted within the next couple of years, providing a clearer regulatory framework for issuers, investors, and consumers.
The recent surge in the cryptocurrency market, pushing its total valuation beyond $4 trillion, is largely driven by several key digital currencies demonstrating strong performance and renewed investor interest. Bitcoin (BTC) remains the dominant force, continuing its trajectory as the most widely recognized and valuable cryptocurrency. Recently, Bitcoin reached an all-time high above $120,000, bolstered by institutional adoption, broader acceptance as a store of value, and the launch of regulated Bitcoin spot ETFs that provide easier market access for investors.
Following Bitcoin, Ethereum (ETH) plays a critical role, with its value surpassing $3,600 in recent months. Ethereum’s ongoing upgrades toward Ethereum 2.0, enhancing scalability, security, and energy efficiency, have strengthened confidence in its long-term potential. Additionally, Ethereum’s dominance in decentralized finance (DeFi) and non-fungible tokens (NFTs) cements its role as a core infrastructure for the crypto ecosystem.
Another notable contributor is XRP, which has experienced dramatic gains recently, hitting $3.64 after positive developments in its ongoing legal battles and adoption for cross-border payment solutions.
Other altcoins like Solana (SOL), Cardano (ADA), and Polkadot (DOT) also contribute to the growth, fueled by expanding use cases and developer activity. Together, these currencies underscore the crypto market’s growing maturity, diversification, and increasing acceptance by retail and institutional investors alike.