Voters Link Crypto Rules to U.S. Financial Leadership

Harrisx, a public opinion research and polling firm, released a national survey on May 7 showing broad voter support for the Digital Asset Market Clarity (CLARITY) Act of 2025. The poll found 52% supported the bill after voters reviewed a policy summary of the legislation, while 11% opposed it. Harrisx surveyed 2,008 registered voters from May 1-4, 2026, with a margin of error of 2.2 percentage points.

Support for the CLARITY Act extended across political groups after voters reviewed a summary of the legislation. Republicans, Democrats, independents, and likely midterm voters all backed the bill by wide margins. Support was strongest among crypto owners, voters familiar with digital assets, and respondents already aware of CLARITY. Awareness of the legislation remained limited overall, with 64% saying they had not heard of the bill before the survey. Another 14% said they had heard a lot, while 22% had heard a little.

The survey noted:

“52% support the CLARITY Act after a neutral description; 11% oppose. Support is bipartisan, and the persuadable middle is large.”

Digital asset familiarity remains uneven, though crypto ownership has become politically relevant. Harrisx found 39% of voters are familiar with digital assets and blockchain technology, while 61% are not. Still, two in five voters have purchased crypto at some point, and 30% bought crypto in the past year. The survey found familiarity and ownership are concentrated among men and voters under 35. Separately, 70% said the United States should already have passed clear cryptocurrency legislation, while 60% preferred federal legislation over case-by-case enforcement.

National Security Message Drives CLARITY Act Support

Offshore market structure added urgency to the findings. Only one-third of voters knew eight of the 10 largest cryptocurrency exchanges are based outside the United States. After learning that, 46% said crypto trading beyond U.S. oversight is at least somewhat problematic, while only 13% called it fine or good. The CLARITY Act would clarify whether the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) oversees different digital assets. It would also create registration rules for exchanges and custodians and establish consumer protection standards for the digital asset industry.

The Harrisx report stated:

“A 70% majority say the U.S. should already have passed clear cryptocurrency legislation, and 62% say it is important that the U.S. set the global rules for digital finance.”

National security ranked as the strongest argument for passing the legislation. Harrisx found 56% of voters said future digital payment systems built and controlled outside the United States would weaken U.S. national security. More than two in five voters said foreign-issued stablecoins becoming dominant would weaken the global role of the U.S. dollar. When asked which argument best supported CLARITY, 23% chose keeping the dollar and U.S. payment systems central to global finance. Law enforcement and illicit finance followed at 17%, while consumer protection and fraud prevention reached 16%.

Election findings gave the bill added political weight. Harrisx found 37% of voters would be more likely to support a senator who votes for CLARITY, while 17% would be less likely, creating a net 20-point benefit. The effect remained positive with Republicans, Democrats, and independents. Another 47% said they would consider voting outside their preferred party if that candidate supported CLARITY and their party did not. For the 2026 midterms, 52% said a candidate’s position on cryptocurrency regulation will be at least somewhat important to their vote. Among crypto owners, that figure rose to 78%.

The findings came as the U.S. Senate Banking Committee scheduled a May 14 executive session to consider the CLARITY Act. The markup was set to give lawmakers their first formal committee debate over the bill and determine whether it advances to the full Senate vote.

The domestic cryptocurrency industry is grappling with mounting concerns over a market downturn as trading activity sharply weakens amid the ongoing stock market boom and as financial authorities move to tighten regulations, industry officials said Sunday.

According to data the Bank of Korea submitted to Rep. Cha Gyu-geun of the minor Rebuilding Korea Party, both domestic investors’ crypto holdings and transaction volumes have fallen by more than half over the past year.

The value of digital assets held by investors at the country’s five cryptocurrency exchanges — Upbit, Bithumb, Korbit, Coinone and Gopax — fell to 60.6 trillion won ($41.4 billion) at the end of February from 121.8 trillion won recorded at the end of January last year.

Average daily trading volume also fluctuated sharply during the period. After climbing to 17.1 trillion won in December last year, trading volume plunged to around 4.5 trillion won by the end of February this year.

“The sharp drop in domestic cryptocurrency holdings appears to have been driven by both capital flowing into the strong local stock market and declines in crypto prices,” Hong Sung-wook, an analyst at NH Investment & Securities, said.

At the same time, the industry is bracing for tighter regulations as financial authorities prepare to implement revised rules under the Act on Reporting and Use of Specified Financial Transaction Information in August to strengthen anti-money laundering oversight.

Under the law, financial institutions and virtual asset service providers are required to comply with obligations such as customer identity verification and suspicious transaction reporting to prevent illicit activities, including money laundering and terrorist financing.

Industry officials are particularly concerned about a proposed rule requiring cryptocurrency transactions exceeding 10 million won involving overseas exchanges or private wallets to be automatically classified as suspicious and reported to the Financial Intelligence Unit.

Digital Asset eXchange Alliance (DAXA), which represents major domestic crypto exchanges, argued that the strengthened regulations could undermine market activity by placing excessive compliance burdens on the industry.

“Applying a blanket suspicious transaction reporting requirement to all crypto transfers above 10 million won fails to reflect the unique nature of digital assets,” DAXA said in its report. “In the United States, transactions involving overseas crypto exchanges or private wallets are not automatically subject to additional reporting requirements. Instead, reporting obligations arise only when transactions above $2,000 are accompanied by clear signs of suspicious activity.”

The alliance has submitted a comment letter to the Ministry of Government Legislation on behalf of virtual asset service providers, urging authorities to reconsider the proposed amendments amid concerns they could further weaken market activity.

A representation of virtual cryptocurrency bitcoin / Korea Times photo by Shim Hyun-chul

Debate over fairness is also intensifying over the government’s plan to introduce cryptocurrency taxation next year. The change would make cryptocurrency gains subject to a 22 percent tax, despite the removal of tax obligations for general equity investors following the repeal of the financial investment income tax in late 2024.

Park Soo-young of the main opposition People Power Party noted that authorities are currently capable of tracking transactions only at the country’s five won-based cryptocurrency exchanges.

“The policy could accelerate capital outflows to overseas trading platforms such as Binance,” he said.

Oh Moon-sung, an adjunct professor at Kyung Hee University’s Graduate School of Business, argued that many of the reasons cited for abolishing the financial investment income tax, including concerns over weakening market activity and insufficient tax infrastructure, are equally relevant to the digital asset market.

“Applying taxes exclusively to cryptocurrency investments while excluding stock investments conflicts with the constitutional principle of equal taxation,” Oh said.

He added that cryptocurrency taxation should be postponed until critical conditions are in place, such as establishing clear tax guidelines for emerging digital asset transactions and building an integrated reporting system connecting domestic exchanges with the National Tax Service.

Lagarde Warns European Banks That Euro Stablecoins Could Narrow ECB Rate Channel

Lagarde delivered her remarks at the Banco de España Latam Economic Forum in Roda de Bará, Spain. The speech, titled “ Stablecoins and the future of money: separating functions from instruments,” came as the global stablecoin market has grown from under $10 billion six years ago to more than $300 billion today.

“The case for promoting euro-denominated stablecoins is far weaker than it appears,” Lagarde remarked.

The market remains heavily dollar-dominated, with nearly 98% of stablecoins pegged to the U.S. dollar. Tether and Circle control a massive share of that market. The U.S. GENIUS Act, currently advancing through Congress, explicitly frames stablecoin expansion as a tool to cement the dollar’s global dominance and sustain demand for U.S. Treasuries.

Lagarde acknowledged that euro stablecoins operating under the EU’s Markets in Crypto-Assets Regulation (MiCAR), which took effect in 2024, could generate additional demand for euro-area safe assets, compress sovereign yields, and extend the euro’s international reach. She did not dismiss those potential gains outright.

But she argued that two risks make the trade-off unfavorable. The first is financial stability. Stablecoins are private liabilities whose backing can come under sudden pressure during periods of stress. She highlighted that when Silicon Valley Bank (SVB) collapsed in March 2023, Circle disclosed that $3.3 billion of USDC’s reserves were held there. During that window, Lagarde said, USDC briefly traded at $0.877, more than 12 cents below its $1 peg.

“These trade-offs outweigh the short-term gains in financing conditions and international reach that euro-denominated stablecoins might provide,” Lagarde stated during her speech.

The second concern is monetary policy transmission, she explained. In the euro area, banks remain the primary channel through which ECB interest rate decisions reach firms and households. If retail deposits migrate into non-bank stablecoins and return to banks as more expensive wholesale funding, that channel narrows. ECB research published in March 2026 (Working Paper No. 3199) found that large-scale deposit substitution would weaken bank lending and monetary policy pass-through, an effect the paper noted is more pronounced in bank-heavy economies like Europe than in the U.S.

Lagarde’s position puts her at odds with Bundesbank President Joachim Nagel, also an ECB Governing Council member. In a Feb. 16, 2026, keynote at the New Year’s Reception of AmCham Germany, Nagel expressed support for the instruments. “I also see merit in euro-denominated stablecoins, as they can be used for cross-border payments by individuals and firms at low cost,” Nagel explained.

The divergence reflects a broader internal debate within the Eurosystem over how to respond to dollar stablecoin dominance and the risk of what Lagarde called “digital dollarisation.”

Rather than match U.S. stablecoin policy, Lagarde pointed to the Eurosystem’s own infrastructure plans. The Pontes project, launching in September 2026, will link distributed ledger platforms to TARGET, the ECB’s existing settlement system, allowing DLT-based transactions to settle in central bank money. The Appia roadmap, published in March 2026, sets a path to a fully interoperable European tokenized financial ecosystem by 2028.

“Our task is not to replicate instruments developed elsewhere, but to build the foundations and the infrastructure that serve our own objectives, so that we can harness the benefits of innovation without importing the fragilities,” Lagarde said.

European banks and payment firms that have already begun preparing regulated euro stablecoin products under MiCAR may now face added scrutiny as the ECB signals it prefers central bank-anchored solutions over private alternatives.