Congressman sounds alarm on regulatory direction
Rep. Warren Davidson has issued a stark warning about the direction of U.S. cryptocurrency policy, suggesting that recent legislative moves are undermining the very principles that made Bitcoin revolutionary in the first place. In a year-end post, the Ohio congressman argued that regulations are pushing digital assets toward account-based systems that could enable greater surveillance and control.
Davidson, who recently introduced legislation allowing federal tax payments in Bitcoin, pointed to what he sees as a troubling trend. He believes markets have stalled because the original promise of disintermediation—cutting out middlemen—has been effectively destroyed in America through regulatory failures and legislative inaction.
The GENIUS Act and its implications
The congressman specifically criticized the GENIUS Act, which was enacted in 2025 to create a stablecoin framework. Davidson contends this law favors traditional banks through an account-based approach while blocking non-bank innovation. More concerning, he says, is how it discourages self-custody and essentially enables what he calls a “wholesale CBDC” by design.
I think there’s something to his argument here. When you look at how the legislation is structured, it does seem to prioritize existing financial institutions over new entrants. That’s not necessarily surprising, given how regulation often works, but it does create barriers for the kind of innovation that made crypto interesting in the first place.
Doubts about the CLARITY Act
Davidson also expressed skepticism about the pending CLARITY Act, which is meant to address gaps in the GENIUS framework. While acknowledging it might fix some issues, he doubts it will go far enough to protect self-custody or individual freedom. “Ultimately, if the Senate even passes a bill, I expect any nod to individual freedom will be cosmetic,” he wrote.
This perspective reflects a broader tension in crypto regulation. On one hand, there’s a need for consumer protection and financial stability. On the other, there’s the original vision of Bitcoin as a permissionless, peer-to-peer system that operates outside traditional financial controls.
The surveillance concern
Perhaps the most significant warning from Davidson involves digital identity systems. He predicts governments and industry will push for systems where access to money is tied to verified IDs. This model might appear free on the surface, but in practice, it could enable greater surveillance and control over financial transactions.
“The promise of Bitcoin was not an illiquid, inflating asset, but rather a permission-less, peer-to-peer payment system,” Davidson emphasized. He argues that the right to transact should be treated as a fundamental freedom, restricted only with probable cause.
A call to action
The congressman urged constituents to pressure Congress on several fronts: banning central bank digital currencies, opposing digital ID mandates, and protecting self-custody rights. He suggests the U.S. must either overturn legal doctrines allowing warrantless financial surveillance or rely on decentralized encryption systems like Bitcoin or Zcash to block it.
What strikes me about Davidson’s position is how it highlights a fundamental philosophical divide. Some see crypto primarily as a new asset class to be regulated like any other financial instrument. Others view it as a technological breakthrough that should preserve its original characteristics—decentralization, privacy, and freedom from institutional control.
The conversation isn’t just about technical details or market performance. It’s about what kind of financial future we’re building, and whether that future aligns with the principles that attracted so many people to cryptocurrency in the first place.
