Crypto—To Regulate or Not?
The future of cryptocurrencies in the United States is a subject of intense debate. According to Finance Professor Marco Di Maggio, who teaches at Imperial College London and previously directed Harvard Business School’s Fintech, Crypto, and Web3 Lab, the crypto industry is at a crucial juncture. Regulatory decisions made in the coming months and years will significantly shape the influence of cryptocurrencies on the U.S. economy.
“In the next couple of years, we are going to see more and more of an integration between traditional financial markets and the underlying technology of blockchain—including more than just cryptocurrencies,” Di Maggio explained. Blockchains, which use digital ledger technologies (DLT), are used to record and verify transactions, including anonymous ones, across a network of computers. Blockchain ledgers offer a high level of security and permanence.
Blockchain’s applications extend beyond digital currencies. For example, Ethereum (ETH), a programmable blockchain and “altcoin” (any cryptocurrency separate from Bitcoin, or BTC), enables innovations such as smart contracts, decentralized finance (DeFi), and non-fungible tokens (NFTs). “Even traditional financial markets, which have been conservative in the past,” Di Maggio noted, “are embracing blockchain technology.” Major institutions like Blackrock are incorporating blockchain into their operations. This includes tokenizing real-world assets and creating and managing exchange-traded funds (ETFs) that invest in cryptocurrencies like Bitcoin, providing institutional investors access to the crypto market.
However, this expansion has brought about challenges, including security concerns and the potential for market manipulation. The crypto industry has faced major crises, such as Sam Bankman-Fried’s FTX scandal in 2022. The lack of established regulation and the potential for anonymity create opportunities for fraud and unethical practices.
The Push-Pull of Government Intervention
Di Maggio calls the current U.S. system “enforcement-based regulation,” which emphasizes fines without providing a clear path to compliance. This leads to uncertainty. In February 2025, a shift began to occur regarding the regulation of digital assets.
President Donald J. Trump, who once criticized Bitcoin, voiced his support for crypto during his 2024 election campaign and called for the U.S. to become the “crypto capital of the world.” In January 2025, Trump signed an executive order emphasizing the importance of digital assets for innovation and economic development. This order also promised to provide “regulatory clarity and certainty.”
“On day one, I will fire Gary Gensler,” Trump said in a speech at the Bitcoin 2024 conference. Gensler, the former S.E.C. Chair, had initiated legal battles against major crypto exchanges based on the classification of cryptocurrencies as securities. The digital currencies sold on some platforms were deemed unregistered securities, exposing investors to high financial risk.
In a complete reversal of Gensler’s approach, the S.E.C. dropped its lawsuit against Coinbase on February 21, 2025. The new S.E.C. Chair, Mark T. Uyeda, who took office in January, launched a “crypto task force” to create a clear regulatory framework for crypto assets. Trump’s family now operates a crypto company that sells meme coins.
A U.S. Strategic Reserve for Cryptocurrency
Trump’s campaign platform included the possibility of a “$20 billion bitcoin reserve.” On March 2, Trump announced that the U.S. Strategic Crypto Reserve would include XRP, Solana (SOL), Cardano (ADA), and Ethereum (ETH) alongside Bitcoin (BTC).
Critics argue that including altcoins, which are more volatile than Bitcoin, may be risky for investors. However, supporters believe that diversifying assets would better align with the reserve’s goals. The U.S. Strategic Crypto Reserve marks a turning point in American policy toward cryptocurrency. Clearer regulations on trading will be needed for the industry to continue developing.
Crypto-Specific Financial Regulations
Existing federal financial regulations were designed for a different financial landscape. They not only fail to address the challenges posed by emerging industries like crypto but they evidently can be applied with differing outcomes for differing political aims.
“We need a new set of rules for an industry that didn’t exist 100 years ago,” Di Maggio said, arguing that a clear regulatory framework would be a “pro-business stance.” This framework would prevent inconsistencies in asset legality determinations and protect investors.
