With the value of digital cryptocurrency rising at never-before-seen rates over the last decade and a half, calls are increasingly coming for the government to regulate a monetary market that experts say could upend the U.S. financial system without proper oversight.

When Bitcoin, the first form of cryptocurrency, first emerged in 2009, it was valued at less than a cent per coin. But since then, its value has skyrocketed at a rate never before seen in modern financial history. By October 2025, it peaked at over $126,000 per coin, and has since settled in price at around $75,000, amounting to an incomprehensible 160 million percent increase since its inception.

So what exactly is cryptocurrency? During Tuesday’s “Washington Watch with Tony Perkins,” Richard Stern, who serves as vice president of the Plymouth Institute for Free Enterprise at Advancing American Freedom, described it as “a digital placeholder for ownership over something else. Now, sometimes the thing you’re owning is just the digital marker, like Bitcoin. It’s just a code packet with millions of calculations in it. But sometimes it’s a token that represents real gold or a barrel of oil somewhere. So in some ways, it’s kind of like a digitized version of an old stock certificate.”

Following Bitcoin’s success, thousands of other cryptocurrencies have been introduced, with varying degrees of success. Today, the cryptocurrency market’s estimated value is $2.3 trillion, with big name investors like Elon Musk pushing the market to new heights. Controversially, President Trump has also invested heavily in crypto, with reports suggesting that he made over $1.4 billion from crypto investments during the first year of his second term.

With the rise of crypto have come concerns about its volatility and ability to wipe out vast sums of capital, as well as the lack of regulations and consumer protections that leave investors vulnerable to frauds and scams. Critics also say that crypto is likely contributing to the devaluing of the dollar by driving investors to invest in it as an alternative when the dollar is weak, although others say that the global reach of crypto has contributed to the growing influence of the dollar.

Experts like Richard Stern say the truth is complicated. “The dollar has lost 88% of its value just since we got off the gold standard about a half a century ago,” he lamented. “Obviously, consumer prices have gone up almost a third since COVID, and a lot of that is the Fed printing inflationary dollars just to finance the federal deficit. Bitcoin has a capped supply — there’s no Fed that can just print an infinite amount of it like gold. In fact, a lot of people call Bitcoin digital gold because it works in that same kind of way. So that’s exactly what’s driving some of the demand for cryptos and digital assets.”

The concerns over crypto have led to Congress taking up the Digital Asset Market Clarity Act, which passed the House in July 2025. But on Tuesday, the Senate blocked the bill after Democrats expressed indignation over Trump’s crypto investments, while also acknowledging the need for regulation of the industry.

Stern detailed how the bill would address multiple types of crypto. “[A] digital asset can be something like Bitcoin that works like a currency. There’s also a whole class of assets created by the federal government called Stablecoins. Now these are privately issued, but a stablecoin is a digital token representing U.S. dollars or U.S. dollar-denominated Treasury debt. But then there’s also digital tokens that can represent physical commodities. The Clarity Act … would create regulatory differences across these three assets. … [T]hat’s what the bill was trying to do, but of course, there’s always controversy about exactly who’s got jurisdiction over what and where the lines are.”

As Stern further explained, one issue that the Clarity Act would work to resolve is by creating regulations that would prevent digital assets from being created and quickly devalued in order to scam investors. Another facet he highlighted would work to protect banks.

“[T]here are private companies that issue Stablecoins … the same way that if you buy Treasury debt, you get an interest yield from the government on it. And so they want to issue Stablecoins that they’ll pay interest on in the form of yields,” he elucidated. “But banks are looking at that saying, ‘Well, but if we let cryptos do that in digital assets, then it takes away market share from banks,’ which right now offer certificate[s] of deposits and money market accounts and savings accounts that also offer an interest rate on the money you park there. Now, what the banks will tell you is they’re under massive heavy regulations where the digital assets are not, and so it’s the difference of regulations that the banks think are unfair.”

Despite the Senate’s stalling of the Clarity Act, Stern believes that a form of the legislation will eventually be passed due to the glaring need for crypto regulation.

“I think something’s going to get done at some point,” he insisted. “… [T]here really needs to be some framework here across these different ways of thinking about digital assets. Look, my guess ultimately is they’re going to come to a compromise that allows some yield offering on Stablecoins, but it’s going to have to come with a lot of regulatory restrictions on it so that banks feel like they’re not being disfavored by the regulation against Stablecoin issuers.”