Introduction
Crypto Week (July 14-18, 2025) marked a watershed moment for digital asset regulation in the United States. During this dedicated legislative session, Congress passed the first major federal cryptocurrency legislation in U.S. history, establishing a clear trajectory for financial innovation and transformation.
Two landmark pieces of legislation emerged from this period: the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), signed into law on July 18, 2025, and the Digital Asset Market Clarity Act (CLARITY Act), which passed the House and is now advancing through the Senate. Together, these bills address longstanding regulatory ambiguity while embedding robust consumer protection mechanisms into the digital asset ecosystem.
Central to both the GENIUS Act and the CLARITY Act is the protection of token holders and creditors, particularly in insolvency scenarios. The GENIUS Act specifically provides stablecoin holders with priority claims over all other creditors in the event of an issuer's bankruptcy—a deliberate response to the lessons learned from the crypto failures of 2022, including Celsius, FTX, and TerraUSD.
The GENIUS Act specifically provides stablecoin holders with priority claims over all other creditors in the event of an issuer's bankruptcy.
Problem Statement
Contrary to the alleged anti-establishment roots of crypto, it appears, considering the decisive direction provided by the Government of the United States of America, that crypto will be regulated and therefore is likely to become mainstream.
Most Governments and regulatory agencies including the Government of India and its agencies have consistently appreciated the underlying technology behind the crypto movement.
However, they have had serious objections on risks posed to consumers, risks posed to financial stability, misuse of the technology by bad actors viz. AML & CFT and principally the unregulated/opaque and arguably illegal nature of the use cases built on the technology including the fit and proper quotient of the actors involved.
The various scams and illegal activities including by once celebrated firms and individuals of the crypto ecosystem viz. Terra Luna Foundation and FTX have consistently confirmed the fears of global regulators.
The various scams and illegal activities including by once celebrated firms and individuals of the crypto ecosystem viz. Terra Luna Foundation and FTX have consistently confirmed the fears of global regulators.
Project Crypto (USA)
Without providing commentary on correctness, the policy direction now espoused by the Government of the United States of America is in keeping with the fears and sentiments of global regulators.
This can be noticed from the vision statement of Project Crypto.
Project Crypto Vision Statement:
"Project Crypto will help ensure that the United States remains the best place in the world to start a business, develop cutting-edge technologies, and participate in capital markets."
The GENIUS Act is an ambitious attempt by the USA to reclaim its top spot in financial innovation. The USA has long languished when it comes to financial innovation for reasons that are well reported.
The GENIUS Act principally seeks to achieve the below said objectives.
- First Federal Stablecoin Framework: Creates the first-ever federal regulatory system for payment stablecoins, ensuring their stability and trust through strong reserve requirements.
- 100% Reserve Backing: Requires all stablecoin issuers to maintain high-quality liquid assets (such as cash or short-term U.S. Treasuries) equal to 100% of the value of tokens in circulation.
- Tiered Oversight Structure: Issuers with more than $10 billion in total issuances are subject to direct federal oversight (notably OCC); smaller issuers may opt into substantially similar state regimes.
- Transparency & Audits: Issuers must disclose the composition of their reserves on a monthly basis and submit them to an annual audit once their market capitalization exceeds $50 billion.
- Consumer Protection in Insolvency: In the event of an issuer's insolvency, token holders have priority claims on reserve assets over all other creditors, providing safeguards against contagion like the Terra Luna collapse.
- Seizure & Compliance Capability: All stablecoin issuers must possess the technical capability to seize, freeze, or burn payment stablecoins when legally required and must comply with lawful orders to do so.
In the event of an issuer's insolvency, token holders have priority claims on reserve assets over all other creditors.
Solvendo Solution
Over the years, Solvendo has studied, reflected upon, and architected solutions that directly align with consumer protection principles now codified in the GENIUS Act and contemplated under the CLARITY Act.
To ensure consumer protection, it is important to democratize data and intelligence. Democratization of data and intelligence is easily possible considering technological tools now available. Further possible are effective ways to communicate and explain this to the consumer, thus ensuring consumer awareness which forms the basis of prudent decision making.
Prudent consumer behavior is an ideal outcome that most regulators and regulations look forward to.
At the foundation of prudent decision making and behavior by the consumer, lies the concept of an Information Utility (IU).
Unfortunately, an IU that democratizes data and intelligence for the benefit of consumers and other stakeholders remains broadly underappreciated.
Most market participants struggle to comprehend the business model and technology stack required to operate an efficient and successful Information Utility, whether applied to traditional finance and market players or the crypto ecosystem/new finance as contemplated in the GENIUS Act.
The technology architecture, operational approach, and performance metrics necessary for running an efficient and successful Information Utility are similar whether applied to traditional finance and market players or crypto/new finance.
As a recognition of the importance of an IU, Solvendo has built and deployed a model IU to demonstrate how it would be relevant to traditional finance and market players or crypto/new finance.
Solvendo has built the model IU (BetygFi) using real-time data from public blockchains to demonstrate how an IU could potentially assist public/stakeholder behavior, regulatory oversight and actions.
Betyg in Swedish means to grade, certify or provide testimonials. BetygFi therefore is an open-source stack that grades financial firms that operate on public blockchains. Philosophically BetygFi enables consumers to get certified data and intelligence to enable prudent financial decision making. Technologically and operationally BetygFi entails real-time data capabilities and intelligence formation considering the dynamic nature of finance and the difficulties surrounding consumer protection.
BetygFi enables consumers to get certified data and intelligence to enable prudent financial decision making.
Most importantly, BetygFi can serve as a base layer for innovators that seek to provide value added services that align with regulatory goals.
The model IU was built to demonstrate a part of Solvendo's Global First Solution for Distressed Debt. However, the same also helps deliver the various goals including consumer protection measures contemplated under the GENIUS Act in the United States.
An efficient and successful Information Utility that democratizes data and intelligence pertaining to crypto entities regulated under the GENIUS Act or the proposed CLARITY Act, would serve as an important base layer and safety valve for consumers and other stakeholders.
An efficient and successful Information Utility that democratizes data and intelligence would serve as an important base layer and safety valve for consumers and other stakeholders.
Specifically, it would be a significant value addition to the stated goals of the GENIUS Act, viz. 100% Reserve Backing, Transparency & Audits, Consumer Protection, Consumer and stakeholder management in the event of an Insolvency, Seizure & Compliance Capability. Importantly, it promises to enable innovations, communications and use cases that protect the interests of various stakeholders, including consumers while disadvantaging bad actors.
To this extent, we share a brief on the regulatory developments with respect to crypto in the United States and have attempted to show a comparison of the approach taken by India.
As ledger-based financial products like stablecoins and other digital assets including crypto transition into the regulated space, an efficient Information Utility that democratizes data and intelligence becomes critical to achieving regulatory goals like consumer protection, regulatory oversight, and sustainable financial innovation.
References
- [1] The week of July 14, 2025 was designated "Crypto Week" by House Financial Services Committee Chair French Hill (R-Ark.) and Agriculture Committee Chair Glenn Thompson (R-Pa.). See Latham & Watkins LLP, "The GENIUS Act of 2025: Stablecoin Legislation Adopted in the US" (July 2025), available at https://www.lw.com/en/insights/the-genius-act-of-2025-stablecoin-legislation-adopted-in-the-us
- [2] The White House, "Fact Sheet: President Donald J. Trump Signs GENIUS Act into Law" (July 18, 2025), available at https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/
- [3] H.R. 3633, Digital Asset Market Clarity Act of 2025, passed the House of Representatives on July 17, 2025, by a vote of 294-134. The bill was referred to the Senate Banking Committee. See Congress.gov, H.R. 3633 - 119th Congress (2025-2026), available at https://www.congress.gov/bill/119th-congress/house-bill/3633. As of November 2025, the Senate Agriculture Committee released a bipartisan discussion draft amending the House-passed version. See Orrick, "Clarity Act Coming Into Focus" (November 2025), available at https://www.orrick.com/en/Insights/2025/11/Clarity-Act-Coming-Into-Focus
- [4] SEC Chairman Paul S. Atkins, "American Leadership in the Digital Finance Revolution," Speech at the America First Policy Institute (July 31, 2025), available at https://www.sec.gov/newsroom/speeches-statements/atkins-digital-finance-revolution-073125. Note: Project Crypto is an SEC Commission-wide initiative, not a separate government program.