Over the past couple of weeks, policymakers in Washington D.C. have presented two contrasting visions for the future of digital assets in the United States. One path holds the promise of American innovation and job growth, while the other appears to be a dead-end with limited prospects.

The recent actions taken by the U.S. Securities and Exchange Commission (SEC) against Coinbase and Binance have made it evident that the agency believes crypto should not have a place in America. The SEC's decision not to establish a crypto-specific securities framework, despite the existing regulatory ambiguity, leads to no other reasonable conclusion. Instead, the SEC has chosen to employ regulation by enforcement as a means to achieve its desired policy outcome.

Legal experts argue that the current laws provide little clarity on the classification of crypto assets. However, the SEC has taken the stance that regulation through enforcement is an acceptable approach to shaping policy outcomes. This approach has raised concerns among those skeptical of crypto assets and their potential impact.

Across the street from the SEC's headquarters, Democrats and Republicans have been making progress on a bill aimed at instituting rules for the crypto market structure. This "discussion draft" legislation draws inspiration from the bipartisan Jumpstart Our Business Startups (JOBS) Act and seeks to provide a framework for token issuers to fundraise while ensuring strong investor protections.

Additionally, the proposed bill addresses the ongoing debate on whether crypto assets should be treated as securities or commodities. It clarifies the jurisdiction of federal securities and commodities regulators, settling the regulatory ambiguity surrounding these assets. The discussion draft, issued by Chairs Patrick McHenry (R-NC) of the Financial Services Committee and Glenn Thompson (R-PA) of the Agriculture Committee, represents a compromise between Republican and Democratic preferences.

If lawmakers can progress from the discussion draft to enacting legislation, the crypto market will finally gain the much-needed clarity that fosters innovation while safeguarding consumers and investors. The United States can begin catching up with other countries in terms of crypto asset regulation, allowing policymakers to shift their focus back to more traditional financial matters, ensuring stability in the market.

However, the consequences of the SEC's regulation by enforcement approach remain uncertain. Even if the SEC is successful, attempting to crush crypto within the United States would not eradicate the technology itself. Crypto assets would simply find a home elsewhere, potentially beyond the control of U.S. regulators and outside of the country's borders.

This highlights the need for lawmakers to make substantial progress on a comprehensive crypto market structure bill. As crypto assets move further away from the regulatory jurisdiction of the United States, domestic regulators will have limited control over managing the risks associated with these assets.

Consider the potential ramifications: investors falling victim to fraudsters and destabilizing runs on banks that threaten the overall financial system. Calling upon other countries to address such issues outside their jurisdiction would prove challenging. Furthermore, if the United States desires to benefit from blockchain technology and remain at the forefront of innovation, decisive action is necessary. Otherwise, the innovation and progress will take place in other global hubs such as Dubai, Paris, or Beijing.

Ending the "crypto wars" and establishing a negotiated regulatory framework that provides clarity is the rational way forward for the country. Unfortunately, there are concerns that rationality may not prevail in this debate.

During recent interviews, SEC Chair Gary Gensler may have inadvertently made a political gaffe. Responding to an interviewer's question, Gensler expressed a seemingly exasperated view that the U.S. "doesn't need" more digital currency. Such a statement is significant coming from the leader of a purportedly "merit-neutral" agency that should not unduly influence investment decisions.

However, regardless of Chair Gensler's statements or actions, it is essential to recognize that attempting to suppress crypto within the United States would not lead to its demise. In the 21st century, technology, especially crypto, cannot be fully controlled or extinguished.

U.S. policymakers face a critical choice: finding a way to embrace crypto and blockchain technology within the country or following a path that leads to stagnation. By striking a balance and creating a conducive environment for crypto innovation, the United States can harness the potential benefits and drive progress, rather than being left behind in the fast lane to nowhere.

In conclusion, the ongoing intersection of politics and crypto presents a crucial debate for American progress. Policymakers must navigate the complexities of crypto regulation to enable innovation while safeguarding the interests of consumers