On July 15, Japan’s National Diet gave final approval to amendments to the Financial Instruments and Exchange Act that reclassify roughly 105 digital assets as financial instruments, subjecting them to the disclosure requirements and insider-trading prohibitions that have governed the country’s equity and bond markets for decades.

The amendments establish a regulatory pathway for spot cryptocurrency exchange-traded funds on the Tokyo Stock Exchange. Under a separate tax-reform timeline, Japan would also reduce the tax on digital-asset gains to the flat 20 percent rate already applied to securities by 2028. Together, the changes would fold an emerging asset class into a capital-markets framework that Japanese investors and institutions already understand and trust. Tokyo has delivered what the U.S. Congress has failed to produce across multiple sessions: a comprehensive, predictable set of rules for the digital-asset economy.

Japan’s move reflects a broader consensus taking shape across Asia’s major financial centers. Governments with very different political systems and economic traditions increasingly agree on one thing: Digital assets are becoming financial infrastructure and require deliberate, purpose-built regulation.

Hong Kong is demonstrating how regulatory certainty can attract institutional capital. Its Stablecoins Ordinance took effect in August 2025, and this April the Hong Kong Monetary Authority granted its first issuer licenses to HSBC and a consortium led by Standard Chartered. This is the kind of institutional participation that emerges only when firms believe the rules will endure. The city has also settled a tokenized green bond using two sovereign digital currencies—an operational milestone that underscores how quickly Asia’s financial centers are moving from experimentation to implementation.

Singapore has followed an institutional path of its own, building its digital-asset strategy around regulation and public-sector innovation. The city-state has issued 30 major payment institution licenses under its regulatory framework, while its tokenization program now includes more than 40 global financial institutions. Even China, despite maintaining the region’s most restrictive posture toward private digital assets, has pursued a remarkably coherent strategy. By making the digital yuan interest-bearing earlier this year, Beijing signaled that its ambition extends beyond simply digitizing cash. It wants to help reshape the future of money.

The lesson is not that these governments have adopted the same model. They have not. It is that each has chosen a strategy for the digital economy and begun putting it into practice. Washington, meanwhile, is still debating whether it should have a model at all.

The CLARITY Act, a comprehensive digital-asset market-structure bill, represents a rare point of bipartisan agreement in Washington. It passed the House in July 2025 by a vote of 294 to 134, with more than 70 Democrats joining nearly every Republican, and cleared the Senate Banking Committee this past May. Yet months later, it remains stranded on the Senate calendar, caught between procedural obstacles and political maneuvering. With the Senate expected to leave for its August recess on August 7 and no vote scheduled, the bill risks becoming another reminder that bipartisan consensus in Washington is often easier to praise than to turn into law.

The same paralysis is delaying changes to the tax code. An American who buys a sandwich with digital dollars today can trigger a taxable event requiring a gain-or-loss calculation. By 2028, a Japanese investor, by contrast, is expected to pay a single flat rate aligned with the treatment of equities. The PARITY Act would reduce these distortions by exempting regulated stablecoin payments from gain-or-loss recognition and rationalizing the tax treatment of staking. Like the CLARITY Act, it has attracted bipartisan sponsorship. And like the CLARITY Act, it remains stalled, another measure with cross-party support but no clear route to enactment.

What makes this inertia genuinely dangerous is that payment rails are geopolitical infrastructure. The systems now being built across Asia are taking shape with little American involvement. Hong Kong has settled sovereign debt in e-HKD and e-CNY. Singapore is developing cross-border settlement arrangements directly with Germany’s central bank. Beijing’s stated priorities for the digital yuan include expanding its use in international trade settlement.

Taken together, these initiatives point toward a financial system in which neither SWIFT nor the U.S. dollar is guaranteed to remain at the center. America’s great advantage is the dollar-backed stablecoin, which extends the dollar’s reach into digital commerce around the world. But that advantage will endure only if Washington helps write the rules governing those markets instead of allowing them to be written around it. If the United States remains on the sidelines, global standards for tokenized finance, programmable money, and digital identity will be shaped disproportionately by other governments—including some whose approaches to privacy, state surveillance, capital controls, and market openness differ sharply from America’s.

None of this is beyond American capacity. The GENIUS Act, enacted last year, showed that Congress can legislate on digital assets when it chooses to do so. What the United States lacks in its failure to pass the CLARITY and PARITY Acts is not a model to imitate. It lacks the one quality shared by every government described above: the willingness to decide.

The rules of digital finance are already being written across Asia—in Tokyo, Hong Kong, Singapore, and Beijing. They will affect American companies and American capital whether or not the United States participates in drafting them. The question is whether America will write its own rules or inherit everyone else’s.