U.S. Becomes the World’s Crypto Capital as Bernstein Hails Breakthrough Regulation
Wall Street research firm Bernstein has declared that the United States has made a defining move toward becoming the world’s leading hub for digital assets, following the rollout of what it describes as a comprehensive and cohesive crypto regulatory framework.
In a report published Wednesday, Bernstein analysts said the implementation of the GENIUS Act and the anticipated passage of the CLARITY Act are transforming the country’s crypto landscape — bringing an end to years of regulatory confusion and positioning the U.S. as the center of the next wave of blockchain innovation.
The GENIUS Act Supercharges Stablecoins
According to the report, the GENIUS Act — which recently became law — has already ignited explosive growth in the stablecoin market.
The total supply of U.S. dollar–backed stablecoins has now surged past $304 billion, as institutional participants and payment firms accelerate adoption under clearer guidelines.
US stablecoin market cap (Source: DefiLlama)
Bernstein said the legislation effectively legitimizes the issuance and use of stablecoins by providing oversight around reserves, audits, and redemption mechanisms, while allowing traditional financial institutions to enter the space with greater confidence.
This clarity, the firm added, has drawn a wave of new participants ranging from fintech startups to established payment processors who see stablecoins as a faster, cheaper alternative to conventional settlement systems.
The CLARITY Act: The Next Step Toward Market Structure
The CLARITY Act, expected to arrive in late 2025, is designed to complement the GENIUS framework by creating the first unified market structure for digital assets.
Bernstein explained that the new legislation will formally divide oversight responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) — a move that will finally resolve one of the industry’s most persistent questions: which agency regulates what.
The firm’s analysts, led by Gautam Chhugani, said this two-pronged regulatory model will not only provide investor protection but will also unlock innovation across tokenized markets, as projects and institutions can operate under predictable rules rather than enforcement-driven ambiguity.
Project Crypto: The SEC’s Most Ambitious Overhaul Yet
At the heart of this transformation is SEC Chair Atkins’ “Project Crypto”, an initiative that Bernstein described as the most ambitious attempt yet to merge traditional securities markets with blockchain infrastructure.
The project seeks to reimagine how capital markets function by allowing broker-dealers to handle both traditional and digital assets under a single licensing regime. It also aims to reclassify most crypto assets outside securities law, which would dramatically expand the universe of tradable tokens while still preserving regulatory safeguards for true investment contracts.
By enabling tokenized stocks, bonds, and on-chain settlement systems, Project Crypto could effectively bring Wall Street and the blockchain into direct convergence — creating a single digital market that operates around the clock, rather than being constrained by traditional trading hours.
Bernstein said the modernization push would lower transaction costs across tokenized securities, stablecoins, and other crypto assets, while ensuring compliance with transparency and custody standards equivalent to those in existing financial markets.
Institutional Confidence and Market Revival
The report added that regulatory clarity has significantly reduced the sector’s vulnerability to political turnover, giving institutional investors renewed confidence in digital asset markets.
According to Bernstein, crypto exchange-traded funds (ETFs) now collectively manage $160 billion in assets, with institutions accounting for roughly a quarter of all spot ETF investors. The rise in institutional participation, coupled with the legal certainty introduced by the GENIUS and CLARITY Acts, has fueled a sharp rebound across the broader market.
The digital asset IPO market has also regained momentum, raising $4 billion since January, Bernstein noted. Meanwhile, the combined market capitalization of publicly traded crypto companies has surged from $80 billion at the start of 2024 to $380 billion this year.
Two of the industry’s leading firms, Coinbase (COIN) and Robinhood (HOOD), have even been added to the S&P 500 stock index, marking a milestone in the integration of crypto with mainstream equity markets.
A New, Sustainable Cycle for Digital Assets
Bernstein’s analysts concluded that the recent changes herald the emergence of a new, more sustainable crypto cycle — one driven by clear regulation, institutional capital, and blockchain’s deeper integration into the financial system.
The U.S., they said, has moved beyond the fragmented approach that once hindered innovation and is now laying the foundation for an open, interoperable, and regulated digital asset economy.
With stablecoins booming, ETFs thriving, and tokenized securities on the horizon, Bernstein believes the U.S. is no longer playing catch-up — it’s setting the global standard for how crypto markets should evolve.
