US Rep. Davidson: American regulation is stifling crypto, killing decentralization

U.S. Representative Warren Davidson has argued that regulations in the United States are the cause of the current downturn in the cryptocurrency market. Writing on X, Davidson stated that the concept of decentralization, which was intended to replace traditional systems, has effectively disappeared in the U.S. He contended that centralized, account-based systems are no different from traditional finance and that a combination of poor legal regulation and legislative indifference is causing capital flight and driving users from the market. Davidson explained that the GENIUS Act for stablecoin regulation, while providing a federal framework, reinforces a bank-centric, account-based approach. He noted this makes it difficult for non-bank institutions to pay interest and fails to protect self-custody. He added that while the CLARITY for Market Structure Act could protect self-custody and fix some of the GENIUS Act's flaws, its protections for individual freedom would likely be merely formal even if it passes the Senate, with no real change to the account-focused structure. He concluded that Bitcoin is a peer-to-peer payment system allowing free global transfers without third-party intervention, and that account-based systems threaten this innovation.