U.S. Dollar at Risk? New York AG Urges Congress to Rein in Crypto

Concerns over the unchecked rise of cryptocurrencies have prompted New York Attorney General Letitia James to call on Congress for immediate intervention.

In her view, the explosive growth of digital assets—especially Bitcoin—is not just a financial matter but a potential threat to the U.S. dollar’s global dominance.

James has emphasized the need for a nationwide legal framework to regulate the crypto sector. Without one, she argues, investors remain vulnerable to deception and exploitation, and the broader economy is at risk. Her stance echoes a growing sentiment among officials who believe that digital currencies, while innovative, are increasingly being used for illicit purposes and may destabilize established financial systems.

Stablecoins, a rapidly growing segment of the crypto market, were singled out in James’ appeal. She proposed that these dollar-linked tokens should only be issued by entities based in the U.S., and should be fully backed by tangible reserves like cash or U.S. Treasuries. In her view, any structure short of this invites manipulation and undermines trust.

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The AG also warned against allowing crypto into retirement portfolios, arguing that the extreme volatility of digital assets could jeopardize long-term savings. She questioned whether assets as unpredictable as Bitcoin should have any place in investment plans meant to secure people’s futures.

Investor losses from crypto-related fraud were another key concern. James highlighted the growing number of New Yorkers who’ve been caught in scams, saying that better federal protections are overdue. For her, mandatory registration and tighter compliance rules for crypto firms are essential to protect the public.

Beyond financial security, James pointed to national security issues. The anonymous nature of crypto transactions, she said, enables bad actors to finance criminal activities without detection—something that stronger federal oversight could help prevent.

Meanwhile, the crypto industry is becoming an increasingly powerful force in Washington. In the latest election cycle, it funneled over $119 million into campaigns backing candidates supportive of the sector. That lobbying power has brought digital assets to the center of U.S. policy debates.

On the federal side, momentum is building. The Trump administration has signaled its intention to reshape U.S. crypto policy, with a particular focus on stablecoins. Bo Hines, one of Trump’s key advisors on digital assets, recently shared plans for a stablecoin bill to be introduced before summer ends. He also praised newly appointed SEC Chair Paul Atkins, expressing optimism that under Trump’s leadership, the U.S. could become the global hub for digital finance—if the right regulatory steps are taken.

Alexander Stefanov