2025 Crypto Policy Outlook
With the second Trump administration taking shape, the landscape for cryptocurrency regulation in the United States is experiencing a significant shift. This change is characterized by a move towards supporting the growth of digital assets, a trend that has become increasingly evident since the beginning of the year. The administration’s approach could soon lead to the establishment of tailored regulations for cryptocurrencies and related technologies.
Pivoting to Light-Touch Regulation
The Securities and Exchange Commission (SEC) has signaled an intention to adopt a more lenient stance on crypto-related enforcement compared to previous years. This shift, indicated by a pause in high-profile cases, is a precursor to the light-touch regulatory environment promised by the Trump administration.
President Trump has nominated individuals with backgrounds favorable to the crypto industry to key regulatory positions: Paul Atkins, a former SEC commissioner and financial regulatory consultant, is the new SEC chair. Additionally, Brian Quintenz, previously a CFTC commissioner and currently the head of crypto policy at a venture capital firm, has been nominated to lead the CFTC. These changes, alongside the establishment of an interdepartmental working group, are expected to shape upcoming regulations and address pre-existing legislative proposals for crypto markets and stablecoins.
The SEC is expected to carefully select future cases, as demonstrated by the pause in high-profile actions against crypto companies. The SEC’s Crypto Task Force is also playing a key role in the reevaluation of the agency’s approach to digital assets. The SEC recently released a Staff Statement on Meme Coins, arguing that these coins do not qualify as investment contracts under U.S. securities laws.
To assist with the enforcement and policy in the crypto market, the SEC has established a Crypto Task Force with a goal to “foster innovation and protect investors.” The task force is prioritizing the revisiting of registration procedures through pathways like Regulation A and crowdfunding, considering potential relief for coin and token offerings, and reexamining the regulatory framework for digital assets.
A Crypto-Friendly White House
President Trump’s second term brings a strengthening of ties with the crypto industry. Trump was the first president to issue blockchain-enabled non-fungible tokens (NFTs). Additionally, branded digital coins were revealed the weekend before his return to the Oval Office, deepening the connection to the crypto sector. His support is further reflected in an executive order that created an interdepartmental working group with a six-month deadline to develop regulatory and legislative proposals related to digital asset growth.
This working group, led by venture capitalist David Sacks, is also assessing the possibility of a national digital asset stockpile utilizing cryptocurrencies seized by law enforcement. Moreover, on March 6, Trump signed an executive order creating a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile that will consolidate government holdings under the Treasury Department. This action, composed of seized Bitcoin and other digital assets, needs further legislation to be fully authorized.
Legislative Momentum
Legislation regarding stablecoins is likely to move forward first, as there was bipartisan support for the STABLE Act during the last Congress. Rep. French Hill released a revised version of the bill in February, and a similar bill, the GENIUS Act, has been introduced in the Senate. These bills aim to regulate stablecoins, increasing the likelihood of bipartisan cooperation in Congress.
Stablecoins are gaining prominence for cross-border transactions, crypto trading, and as a store of value in countries where access to the U.S. dollar is limited. While the current environment places stablecoins under state regulations, which raises barriers and costs, industry advocates are seeking to streamline oversight through federal legislation. Both the STABLE and GENIUS Acts define a payment stablecoin and set requirements for reserves and issuance.
Digital asset legislation will require bipartisan consensus to become law, and lawmakers must balance industry needs with consumer protection. Market structure is another area for legislative action. However, defining when a cryptocurrency or token should be regulated by the SEC or the CFTC remains a challenge. During the last Congress, the Financial Innovation and Technology Act was drafted to address this issue. Congress may also repeal a rule treating decentralized finance entities as brokers for tax purposes.
Companies Prepare for Growth
A more relaxed regulatory approach coupled with specific crypto legislation could boost the expansion of the cryptocurrency sector. Companies operating in this sector need to scale their risk management, product development, and strategic plans.
Companies must ensure compliance with the Office of Foreign Assets Control (OFAC) guidelines, especially concerning trade sanctions. Regulators will continue to address fraud, market manipulation, and cybersecurity, requiring companies to align their internal controls with regulatory expectations and protect digital asset system security.
The recent issuance of Staff Accounting Bulletin (SAB) No. 122 has reversed the previous SAB 121, which required public companies and regulated banks to record customer assets on their balance sheets. With this shift, banks and brokerage firms are now more open to custodying assets for their clients. It’s likely that we’ll see companies dedicating more resources to expanding and innovating digital asset offerings. Adaptability is key to success.
Proactive engagement with regulators is also crucial for companies in this field, as this allows for insight into rule-making. This will have a significant impact on digital assets that are related to automated market makers.
Refine a Scalable Approach
The industry is positioned for a much lighter regulatory environment with the current administration. It is important for companies to get the right risk management and strategies in place to successfully navigate the updated terrain of the industry. Align your risk management and planning now to ensure success in an environment with clearer rules of engagement and greater innovation opportunities.
