The current regulatory approach is fundamentally flawed. Imposing strict limits on tokenization while institutional players like major asset managers are actively entering the crypto space creates a contradictory policy environment that stifles rather than supports growth.

This direction threatens multiple pillars of Web3 development. Aggressive DeFi restrictions, weakened privacy protections, and layers of overregulation don't position the US as a leader in digital asset innovation—they do the opposite. They push talent and capital toward jurisdictions with clearer, more competitive frameworks.

The math is simple: restrictive policy is ultimately more damaging than a measured approach. The US risks losing its advantage when the answer isn't to clamp down harder, but to create rules that actually work with the market, not against it.