This policy brief by Nargiza Umarova argues that renewed U.S. sanctions on Iran’s Chabahar Port and India’s parallel deepening of trade ties with Russia and the EAEU are reshaping Central Asia’s southern connectivity choices. Although Uzbekistan had explored building logistics facilities at Chabahar, those plans have not materialised—signalling Tashkent’s caution as the port again falls under sanctions and as returns look uncertain for a country accounting for only a small share of India–Central Asia trade. At the same time, Chabahar remains central to the INSTC and to India–Iran–Russia supply chains, which incentivises Azerbaijan, Turkmenistan and others to keep the route alive.   Against this backdrop, Tashkent is pivoting to an alternative: a faster, more direct land bridge to South Asia via the Trans-Afghan (Kabul) Corridor. Since 2022, Uzbekistan has promoted a multimodal Belarus–Russia–Kazakhstan–Uzbekistan–Afghanistan–Pakistan route, designed to cut North Eurasia–South Asia delivery times to about 20 days. The centrepiece is the Termez–Naibabad–Maidanshahr–Logar–Kharlachi railway, backed by a July 17 intergovernmental agreement on a feasibility study with Afghanistan and Pakistan. Preliminary estimates suggest freight volumes could reach 22 million tonnes by 2030 and 34 million tonnes by 2040, much of it in transit to larger markets, including India.   Umarova emphasises that corridor choice is not merely logistical but strategic. Extending Lapis Lazuli and INSTC pathways could divert South Asia–Europe flows toward the Caspian littoral (Turkmenistan–Azerbaijan), diluting Uzbekistan’s role as a trans-Eurasian hub. By contrast, a functioning Kabul Corridor would anchor Tashkent in the shortest Eurasia–South Asia axis, lessen dependence on Iranian infrastructure, and align with India’s interest in diversified, overland access—provided political risk in Afghanistan is managed.   The brief concludes with pragmatic prescriptions: move first and fast on the Kabul Corridor with broad Central Asian buy-in; engage New Delhi diplomatically to secure support and cargo; and pursue an SCO-wide “single transport space” to integrate standards, schedules and financing. In parallel, keep a hedging option open at Chabahar to preserve flexibility, but treat it as supplementary to a primary Trans-Afghan strategy that maximises Uzbekistan’s connectivity, resilience and transit revenues.   Read on Jamestown Foundation   * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

This policy brief by Nargiza Umarova argues that Azerbaijan is deepening engagement with the Taliban authorities through connectivity, positioning itself as a pivotal node between South Asia and Europe. At the centre is the Lapis Lazuli Corridor—launched in 2018 and revived through new outreach—which links Afghanistan via Turkmenistan, the Caspian, the South Caucasus and Turkey to the European network. Baku frames Lapis Lazuli as a southern extension of the Middle (Trans-Caspian) Corridor, offering Afghanistan alternative pathways to European markets and accelerating its integration into trans-Caspian shipping. Recent high-level contacts—culminating in July 2025 meetings at the ECO summit and a port visit to Alat—signal a proactive Azerbaijani push to grow trade, logistics and energy cooperation with Kabul.   The brief details significant Azerbaijani and Turkmen investments that underpin this strategy: Baku’s Alat Port and the Baku–Tbilisi–Kars railway, alongside Turkmenistan’s rail links to Aqina and Andkhoy and upgrades at Turkmenbashi. Maximising the utilisation of these assets creates strong incentives to extend Lapis Lazuli toward Pakistan and India. Yet such a southward pull carries geo-economic consequences for Uzbekistan. By routing South Asia–Europe cargoes across the Caspian through Turkmenistan and Azerbaijan, Tashkent’s aspiration to serve as the indispensable trans-Eurasian land bridge could be diluted, especially if Lapis Lazuli interlocks with Afghan segments that do not rely on Uzbek territory.   Umarova maps several corridor interactions that shape this competition. Connecting Lapis Lazuli to the Kabul (Trans-Afghan) Corridor via Herat–Mazar-i-Sharif could revive the long-mooted Five Nations Railway (China–Kyrgyzstan–Tajikistan–Afghanistan–Iran), bypassing Uzbekistan and shortening East–West transit. Parallel Iranian rail expansions from Khaf to Herat and onward to Naibabad would further channel India–Europe flows via Iran and Turkey, eroding Central Asian and South Caucasian transit revenues. Conversely, a western Trans-Afghan line (Torghundi–Herat–Kandahar–Spin Buldak) championed by Turkmenistan and Kazakhstan could compete with the Kabul Corridor and reallocate traffic away from Uzbek routes.   The brief concludes that Uzbekistan’s best response is offensive rather than defensive: accelerate the Kabul Corridor with maximum Central Asian buy-in, stitch it to the Northern Railway Route to the EU (boosting Kazakhstan’s transit by up to 20 mtpa), and propose to Baku a joint multimodal India–Pakistan–Afghanistan–Uzbekistan–Kazakhstan–Azerbaijan–Georgia–EU corridor that enlarges the Middle Corridor’s South Asia feeder base. In parallel, Tashkent should promote an alternative to the Five Nations alignment that connects China–Afghanistan–Iran through Uzbekistan and neighbours, safeguarding the commercial viability of the Mazar-i-Sharif–Herat segment. The strategic through-line is clear: maintain first-mover advantage on the Kabul Corridor, align interests with Kazakhstan and Azerbaijan where possible, and prevent corridor designs that structurally sideline Uzbekistan from the emergent South Asia–Europe land bridge.   Read on Central Asia – Caucasus Analyst   * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

This policy brief by Aziza Mukhammedova and co-author Jalal Ud Din Kakar situates the debate over the Bagram Air Base within the post-withdrawal landscape of Afghanistan. Four years after the U.S. exit, President Donald Trump’s 2025 remarks about “taking back” Bagram reflect enduring U.S. anxieties over China’s rise and the loss of a strategic foothold on the rim of Central and South Asia. The authors trace the intellectual lineage of this idea to Rep. Michael Waltz’s 2021 warnings that abandoning Bagram would forfeit unique leverage vis-à-vis China, Russia’s south, Iran, and nuclear-armed Pakistan – an argument Trump later amplified, albeit with overstated geography.   They underline Bagram’s dual identity: once a Soviet-built, U.S.-expanded mega-hub with dual runways and tens of thousands of personnel; now a symbol of Taliban authority and of Washington’s hurried exit. Any restoration of U.S. control collides with blunt Taliban red lines – publicly articulated by defense chief Fasihuddin Fitrat – and the group’s broader narrative of sovereignty. While Afghanistan’s economic freefall, aid dependence, and asset freezes create theoretical bargaining chips (humanitarian relief, sanctions relief, travel waivers), the authors caution that such concessions risk legitimizing an internationally isolated regime and entrenching rights abuses, especially against women.   A second strategic constraint is China’s expanding presence. Beijing’s early diplomatic normalization, investment signals, and interest in Afghanistan’s resource endowment reduce Western leverage and offer the Taliban alternatives to U.S. engagement. Pakistan’s role further narrows Washington’s room for maneuver: Islamabad’s ties to both Beijing and the Taliban make support for a U.S. return to Bagram strategically costly, even if it could theoretically exert pressure.   The brief concludes that retaking Bagram is highly implausible without far-reaching political compromises that Washington may find unacceptable. More broadly, the episode is a proxy for the U.S.–China contest across the region. Practical policy, the authors imply, lies less in resurrecting a base than in calibrated diplomacy, targeted humanitarian and economic tools, and coordination with regional actors that preserves influence without conferring de facto recognition on the Taliban.   Read on World Geostrategic Insights   Jalal Ud Din Kakar is a Research Fellow at the Center for Security Strategy and Policy Research and PhD International Relations scholar at the School of Integrated Social Sciences, University of Lahore, Pakistan.   * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

Rustam Makhmudov’s analytical note for the Valdai Club considers the Middle East as a key link in the Taliban’s foreign policy legitimacy strategy after 2021. The author’s central hypothesis is that the Arab monarchies of the Persian Gulf are not only important partners in their own right, but also a potential “bridge” to the West and international institutions. The movement is demonstrating consistency and flexibility in this direction: from restoring and expanding official contacts with the UAE, Qatar, and Saudi Arabia to building a working agenda with Iran, despite the difficult legacy of the 1990s. Significant milestones include the UAE’s acceptance of the Taliban ambassador’s credentials, a visit to Abu Dhabi by a delegation led by Sirajuddin Haqqani, the participation of the de facto “Afghan authorities” in the Doha meeting under the auspices of the UN, and the resumption of the Saudi embassy in Kabul; In the Iranian vector, the accreditation of a Taliban diplomat and the visit of the Iranian foreign minister in 2025.   The second contour is a narrative strategy addressed to the “Arab street” and the Iranian audience. It involves systematic criticism of Israel’s actions and appeals to the language of international law (sovereignty, territorial integrity) to assert the Taliban as a “responsible” actor. Mahmoudov emphasizes the ritualistic nature of this rhetoric: it is rarely translated into practical steps, which is explained by the desire not to burn bridges with the West and the traditional elites of the Gulf. At the same time, the Taliban are investing in their image as “pragmatists” by emphasizing the fight against ISIS-Khorasan and the drug trade — elements that are relevant to the international security agenda.   The third layer is the economic game surrounding Afghanistan’s transit position and natural resources. The author notes China’s increased activity in oil and gas and mining, interest in lithium, and the growing involvement of regional players. Iran is becoming a leader in trade (with turnover growing to $3.197 billion in 2024 with minimal Afghan exports), the UAE is taking over the management of airports through GAAC, and Dubai is acting as a financial and business hub for the Afghan elite. Qatar is a potential investor in the Termez–Mazar-i-Sharif–Kabul–Peshawar highway (~$5 billion) and the Jabal Siraj cement project ($220 million). These initiatives are designed to strengthen the Taliban’s case for recognition by promising regional connectivity and economic returns.   The main constraint is the West’s position on women’s rights, which forms a “ceiling” for recognition and restrains even pragmatic Gulf regimes. Saudi Arabia, the UAE, and Qatar have publicly signaled to the Taliban that bans on women’s education and employment are unacceptable. The internal duality of the Taliban (Kandahar as the conservative core versus the more pragmatic Kabul) is freezing liberalization. Nevertheless, Mahmoudov sees a window of opportunity: Russia’s recognition of the IEA on July 3, 2025, and potentially further steps by Iran and China, could trigger a “chain reaction” and push Gulf players and some Western capitals to reassess the costs of non-recognition. In such a scenario, women’s rights risk being relegated to the level of rhetoric if the balance of power and transit-resource incentives outweigh the reputational costs.   Read on the website of the Valdai International Discussion Club   * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

By Abbos Bobokhonov & Ubaydullo Khojabekov   The 25th Shanghai Cooperation Organisation (SCO) Summit, held from 31 August to 1 September 2025 in Tianjin, marked a turning point in the organisation’s history in terms of both scale and political significance. The summit was recognised as the largest and most important event in the SCO’s 24-year history, reflecting its transformation from a regional security bloc into a platform with growing geopolitical influence. The outcomes and symbolism of the summit highlighted the SCO’s role as a key mechanism for regional integration and international cooperation. Chinese scholars noted that hosting the summits on Chinese territory is accompanied not only by financial and organisational support but also by the articulation of a strategic vision, demonstrating China’s increasing role in the global governance system and multilateral diplomacy. Moreover, the SCO summit clearly demonstrated China’s aspiration to transform the existing world order with the support of its partners and allies, including the SCO member states.   Initially established to combat terrorism and strengthen regional stability, the SCO has gradually evolved into a comprehensive multilateral platform promoting Eurasian integration in economic, technological, and humanitarian spheres. As Zhao Long, Deputy Director of the Shanghai Institute for International Studies, noted, the organisation today contributes “positive elements to the post-war world order, previously characterised by great power rivalry”, reflecting a global trend towards strengthening multilateralism. In this context, the Tianjin summit became an important forum for the Global South and middle-power states seeking alternatives to U.S.-led institutions.   Henrietta Levin from the Centre for Strategic and International Studies (CSIS) observed that China, within the SCO framework, had initiated the creation of six new platforms aimed at deepening cooperation in energy, the green economy, digital technologies, and education. Despite implementation challenges, these initiatives reflect Beijing’s ambition to institutionalise its leadership role within the organisation. The Tianjin summit confirmed the SCO’s transition towards a multifaceted structure shaping the contours of a new multipolar order. As Reuters summarised, “global governance has reached a new crossroads” — and China, through the SCO, positions itself at the centre of this transformative process.   China played a key role in shaping the summit’s agenda and outcomes. As the chairing country during 2024–2025, the People’s Republic of China organised over 100 high-level events and initiated the drafting of two key documents: the Tianjin Declaration and the SCO Development Strategy until 2035. These documents reaffirmed commitment to the principles of peaceful coexistence, non-interference in internal affairs, and opposition to unilateral sanctions and trade barriers, while calling for expanded cooperation in areas such as artificial intelligence, data governance, and sustainable development. According to an expert from the British Chatham House, this summit formed part of Beijing’s broader diplomatic campaign to position China as an architect of a multipolar world order — in stark contrast to Washington’s policy of “retreat” and isolationism.   One of the key institutional outcomes was the decision by SCO member states to establish the SCO Development Bank, which received direct financial support from China amounting to 10 billion yuan (USD 1.4 billion) in loans and 2 billion yuan (around USD 300 million) in grants. Economists described this institution as the “main practical achievement of the summit”, emphasising China’s strategy to expand yuan usage and reduce dependence on the U.S. dollar.   Zhou Mi, an expert from China’s Ministry of Commerce, noted that this approach promotes equitable cooperation and addresses real issues rather than exacerbating geopolitical confrontation. Professor Zhao Huasheng from Fudan University stressed that the SCO’s slow but steady institutionalisation represents a viable alternative to the declining activity of U.S.-led multilateral structures, especially for states suffering from sanctions and discriminatory trade measures.   Meanwhile, the organisation’s functional agenda has significantly expanded, as reflected in the Tianjin Declaration. Professor Xiao Qian from Tsinghua University compared the SCO with U.S.-led alliances such as AUKUS and QUAD, noting that the SCO’s openness, diversity, and pragmatic economic orientation make it attractive to states seeking to avoid entanglement in great power conflicts. A notable element of the summit was the active participation not only of member states but also of ASEAN countries, many of which face trade frictions with the United States. Experts highlighted that countries like Malaysia and Indonesia view the SCO as a “gateway” to Asia-Pacific markets and as a platform for enhancing their international status.   The geopolitical significance of the Tianjin SCO summit was further underscored by the participation of Indian Prime Minister Narendra Modi, for the first time since the 2020 border incident between India and China in the Galwan Valley. According to scholars, the Indian leader’s decision reflects New Delhi’s desire to maintain strategic autonomy in its foreign policy despite growing pressure from Washington. The resumption of diplomatic contacts between India and China, the restoration of direct air links, and support for the Tianjin Declaration demonstrate the SCO’s ability to function as a unique multilateral platform for dialogue among states with often conflicting interests.   Prime Minister Modi’s signing of a separate provision of the Tianjin Declaration condemning the attacks by Israel and the United States on Iran sent an important political signal. This was especially notable as earlier in June, India had refused to join a similar joint SCO statement, citing its strategic partnerships with those states. However, the U.S. administration’s tariff policies under President Donald Trump, including those targeting India, were perceived by New Delhi as unfriendly, influencing a shift in its foreign policy priorities.   In the economic sphere, the summit marked a new stage in Eurasian integration. It is expected that infrastructure projects such as the China-Pakistan Economic Corridor (CPEC) will attract up to USD 10 billion in investment by 2030. The development of digital trade, unification of customs procedures, and transition to paperless documentation contribute to more efficient cross-border logistics. The significance of key transport routes is increasing, including the China-Europe railway artery, the Trans-Caspian International Transport Route, and the International North-South Transport Corridor (INSTC).   In the technological sphere, the summit highlighted the SCO’s ambition to lead in emerging sectors. In May 2025, Tianjin hosted the Artificial Intelligence Cooperation Forum, where experts and government representatives discussed open-source software, cybersecurity, and regulatory issues. It was noted that despite disparities in technological development among member states, pilot projects in AI and digital infrastructure are already being implemented, aimed at fostering regional digital sovereignty.   The SCO’s institutional complementarity with other multilateral organisations, particularly BRICS, adds to its significance. Both frameworks bring together China, Russia, and India, forming overlapping networks aimed at rethinking Western-centric models of global governance. While BRICS focuses primarily on economic coordination, the SCO expands its agenda to include regional security, infrastructure connectivity, technology, and financial innovation.   In the geopolitical dimension, the SCO is viewed as a potential stabilising factor amid the growing trend towards a multipolar world order. Despite persisting internal contradictions — particularly between India and China, as well as India and Pakistan — the organisation demonstrates a unique capacity to integrate divergent interests within the so-called “Shanghai Spirit,” based on principles of consensus, mutual respect, and equal cooperation.   It is especially noteworthy that the SCO does not seek confrontation with Western states, particularly the United States, but actively fills the geopolitical vacuum created by Washington’s current unilateral foreign policy and economic stance and the fragmentation of the old global order model. In these circumstances, the SCO offers a more inclusive and pragmatic approach to regional security and economic interaction. Its focus on infrastructure connectivity, the resilience of logistics and trade chains, and stability in member and partner countries allows the organisation to expand its strategic presence. This makes the SCO a significant actor not only in Central Asia but also in the broader Eurasian context — encompassing the Asia-Pacific region, the Middle East, and South Asia. Thus, the organisation becomes an important element of the evolving architecture of regional and global security, offering alternative mechanisms for interaction amid the shift of the global political centre towards the East.   Nevertheless, the SCO’s further development faces a number of structural and institutional challenges. The internal heterogeneity of member states, overlapping interests at the global level, and significant disparities in technological and economic development may hinder deeper coordination and institutional integration within the organisation. However, as analysts emphasise, the SCO represents a growing alternative to the Western-centric international system and is likely to play an increasingly prominent role in shaping the emerging global governance architecture.   Thus, the SCO is gradually transforming from a predominantly regional forum into an important element of the emerging multipolar world order. The organisation provides developing economies and middle-power states not only with a platform to voice their positions but also with real tools to participate in shaping new principles and mechanisms of global governance. Amid the transformation of the international system, the SCO’s commitment to its core principles — non-alignment, non-confrontation with other structures, and a focus on peaceful development — remains the cornerstone of its legitimacy and effectiveness.   * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

A landmark shift in financial policy has taken place in the United States with President Trump’s signing of a legislative package on cryptocurrency, the central element of which is the GENIUS Act (Guidance and Implementation of National Innovations for US Stablecoins). For the first time in U.S. history, this act establishes a clear federal regulatory framework for stablecoins — cryptocurrencies whose value is firmly pegged to stable real assets. The Trump Administration presents this legislation as a historic milestone that will enable the United States to lead the global revolution in digital currencies.   Until now, despite their decade-long existence and market capitalization reaching nearly $244 billion by May 2025, stablecoins performed a narrowly specialized function as a bridge between traditional finance and the volatile world of crypto assets. Having now obtained legal status as a means of payment, this cryptocurrency is prepared to challenge traditional payment systems. As RAND Corporation researcher Jim Mignano observes, “this law effectively legitimizes a long-awaited but politically fraught phenomenon, the so-called corporate cryptocurrency”.   The key innovation of the GENIUS Act is the requirement for one-hundred-percent backing of tokens — digital records in a distributed ledger (blockchain) certifying rights to specific assets or services. Following the enactment of this law, stablecoin tokens must be fully backed by highly liquid and secure assets, specifically U.S. dollars and short-term Treasury securities.   This provision, alongside the obligation of stablecoin issuers to publish monthly reports on their reserves, is intended to eliminate major regulatory concerns. Yet the geopolitical and macroeconomic dimensions of this step are no less significant. The law’s adoption occurs against the backdrop of mounting challenges for the American economy: a national debt reaching $37 trillion and a growing budget deficit. In this context, the legalization of stablecoins is viewed as a tool to alleviate the debt crisis, since the mandatory holding of reserves in government securities is expected to substantially increase demand for them.   Despite the optimism of proponents, including Trump himself, who has thus rewarded the crypto community for contributions to his election campaign, such rapid integration of crypto assets raises serious concerns. Critics, among them Senator Elizabeth Warren, warn of risks to financial stability, as the law erases the traditional separation between banking activities and commerce.   Given the decentralized nature of cryptocurrency production, legalization opens the door to a new class of issuers: in addition to individuals, large multinational corporations may also issue tokens. Companies such as Meta (formerly Facebook), which had previously abandoned its “Libra” cryptocurrency project under regulatory pressure, are now cautiously re-entering the field. Similarly, the forthcoming “JPMD” token by JP Morgan represents a calculated attempt to integrate traditional banking infrastructure with stablecoin innovations. This marks the emergence of a paradoxical phenomenon: a technology originally designed to undermine the foundations of traditional finance now receives its strongest impetus for development from the very institutions it was intended to bypass.   The failure of the Libra project was largely due to the absence of institutional trust. The GENIUS Act, by contrast, provides precisely the legal foundation that may clear the path for such projects in the future. Nevertheless, as experts emphasize, legal compliance alone is insufficient for achieving socially beneficial outcomes. Corporate cryptocurrencies may simplify payments, but this potential will only be realized if the systems created are transparent, inclusive, and interoperable. Otherwise, there is a risk that these innovations will merely reinforce market concentration in the hands of a few technological giants.   The Trump Administration’s approach stands in marked contrast to the regulatory strategies of other global centers. While the European Union has implemented a comprehensive and unified framework for crypto-asset regulation under “MiCA”, and Russia is cautiously experimenting with cross-border settlements under special legal regimes, the U.S. is betting on liberalization under private-sector leadership. Notably, U.S. law explicitly prohibits the Federal Reserve from issuing its own digital currency, thereby cementing the private nature of digital money, whereas BRICS countries are actively developing state-backed equivalents.   In parallel with stablecoin legalization, the tokenization of real assets is also gathering momentum, with the market already reaching $25 billion. Giants such as BlackRock are actively issuing tokenized funds. Yet legal complications persist, as evidenced by SEC Commissioner Hester Peirce’s reminder that “tokenized securities remain securities”, and therefore must comply with all disclosure requirements.   Despite the adoption of a framework law, there remains a vast field of work for regulators. At the federal level, it will be necessary to harmonize consumer protection and data governance rules across different agencies. At the state level, policy remains fragmented: there are significant divergences between jurisdictions embracing crypto-experimentation, such as Wyoming, and those maintaining cautious licensing regimes, such as New York. At the international level, the challenge is to manage systemic risks and combat illicit financial activities.   In the broader context of the new U.S. crypto policy, another ambitious initiative should also be considered — the potential use of Bitcoin as a state reserve asset. This idea, outlined in the 2024 Bitcoin Bill, envisages that the U.S. Federal Reserve would be required to acquire up to 200,000 bitcoins annually. According to its authors, such a measure would not only officially recognize Bitcoin as a significant financial instrument alongside gold but also serve the goal of strengthening the U.S. monetary system.   Alongside these legislative shifts, the Trump Administration is also using executive authority to accelerate cryptocurrency integration, this time at the level of mass retail investors. A presidential executive order grants more than 90 million Americans participating in retirement plans access to alternative assets, including private equity, real estate, and, most notably, digital assets.   The White House regards this step as a means of democratizing investment and potentially increasing the returns on workers’ retirement savings, by providing them the same opportunities that were previously available only to wealthy investors. This decision is a direct continuation of Trump’s campaign promise to make the United States the cryptocurrency capital of the world, and it represents another step towards legitimizing cryptocurrencies as a fully-fledged investment class.   At the same time, the legalization of cryptocurrencies exposes a profound ideological contradiction between the letter of the new law and the very “spirit of cryptocurrency”. Cryptocurrencies were originally conceived as a decentralized and anonymous alternative to state financial systems. The imposition of strict rules, though necessary to restore investor confidence, constitutes a compromise that reshapes the crypto market and threatens its fundamental principles. Here, the concept of the “digital footprint” plays a central role. Unlike cash, every stablecoin transaction is permanently recorded in a public distributed ledger. This mechanism creates an indelible history of all operations, potentially open to analysis, thereby posing the risk of total financial transparency — contrary to the original principles of privacy.   Finally, U.S. regulatory efforts extend beyond stablecoins, with the next step being the elimination of legal uncertainty in the sector. The key problem lies in the absence of clear criteria for determining whether a digital asset should be classified as a security, under SEC oversight, or as a commodity, under the jurisdiction of the CFTC. This ambiguity generates ongoing conflicts. It is precisely this issue that the newly introduced Digital Asset Market Transparency Act “CLARITY” is intended to address by establishing clear rules of the game and delineating regulatory authority.   Simultaneously, a more nuanced approach is being developed toward decentralized finance (DeFi). This strategy envisages a distinction between financial intermediaries, such as centralized exchanges, which will be subject to strict oversight, and decentralized protocols themselves. The latter, being by nature software code rather than legal entities, may fall under a different regulatory model, focused not on financial licensing but on security audits and technical standards of transparency.   Overall, the American approach is designed to stimulate technological innovation at the core of the industry, while maintaining investor protection on the platforms that serve as their primary gateways into the world of digital assets.   * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.