Nearly a year ago, we published an open letter outlining practical, achievable steps the incoming administration could take to make the United States the cryptocurrency capital of the world, reflecting the views of the Cryptocurrency Law Association. The goal is not to promote cryptocurrency as an ideology but to convey the perspective of lawyers in the field on how thoughtful regulatory policy can unleash innovation and ensure that the next generation of financial and internet infrastructure will be built on American soil.
On the anniversary of that letter, and with market structure legislation still pending, it’s worth taking stock. Last year was an unusually eventful year for U.S. cryptocurrency policy, with in many ways the pace and scope of progress exceeding even our more hopeful predictions. This moment calls for a report card—one that both recognizes meaningful accomplishments and identifies the work America still needs to do to maintain and solidify its leadership.
inventory
Our letter focuses on three priorities: supporting U.S.-registered cryptocurrency companies, promoting cryptocurrency’s core values in public policy, and fostering a welcoming domestic business environment for builders and entrepreneurs.
Since then, lawmakers have proposed forward-looking policies on all three fronts. Importantly, much of the progress has not been achieved through sweeping legislative reform alone, but through sustained, pragmatic work at the agency level – work that has begun to replace years of uncertainty with a more coherent regulatory posture. While the work is far from complete, the overall direction is undoubtedly positive.
Support U.S. companies (Letter grade: A-)
Our letter emphasizes that U.S. cryptocurrency companies need clear, durable rules to compete globally. We believe market structure legislation is critical, but we have also highlighted several specific areas – stablecoins, decentralized finance and the integration of traditional finance – where targeted regulatory attention could bring significant benefits.
In this regard, substantial progress has been made.
general rules of the road
Momentum for comprehensive market structure legislation continues, with Congress poised to clarify the respective roles of securities and commodities regulators in cryptocurrency markets — despite stalling recently over disagreements over stablecoin yields. While the final legal framework remains to be determined, the direction is clear: Public blockchains will no longer be regulatory black sheep but will become a permanent part of the U.S. financial system, worthy of rules appropriate to its purpose. As lawmakers approach the finish line of the market structure bill, we encourage them and the industry to resolve remaining differences in favor of open, innovative use cases rather than entrenching the advantages of existing cryptocurrency intermediaries such as centralized exchanges. The bill is not perfect, but the diversity of industry stakeholders supporting it proves that it is good enough and urgent enough to become law.
Stablecoin
In this regard, progress has been particularly significant. The passage of stablecoin legislation and the launch of preliminary rulemaking provide long-awaited clarity on issuance, reserves, and regulation. This gives more U.S. companies a viable way to compete with offshore issuers, while protecting consumers from weak or opaque reserves and strengthening the U.S. dollar’s dominance in global digital markets. However, some of those victories are now at risk as the big banks try to revive the Genius Act during market structure talks. Additionally, regulators must always be cognizant of not reducing cryptocurrency’s disintermediation infrastructure to a backend that centrally hosts stablecoin issuers.
TradFi integration
Over the past year, we have also seen meaningful moves towards integrating cryptocurrency infrastructure into traditional financial markets. Banks, fintechs, asset managers and market intermediaries are now operating with greater confidence that responsible participation in digital assets will not trigger a reflexive regulatory backlash. This opens the door to broader institutional participation, improved market pipelines and a more resilient financial trajectory. A year ago, major regulators including the SEC, CFTC and OCC were preparing for a financial system defined by tokenized securities, new on-chain asset classes and even decentralized finance, pledging to work together to streamline regulation of so-called “super apps” covering securities and commodities trading and other innovative products.
Decentralized Finance
Decentralized finance remains the most challenging category to regulate, but the discussion is ripe for discussion. Regulators are increasingly recognizing that DeFi protocols do not fit neatly into a framework designed for intermediaries, and efforts to separate infrastructure (and its developers) from activity are bearing fruit. However, when developing control standards that distinguish decentralized finance from centralized finance, legislators should be careful not to draw the line too strictly, lest it prevent DeFi protocols from taking basic security and compliance measures, such as asset management and sanctions screening, needed to protect users and comply with the law.
This progress is due in large part to the SEC’s unusually visionary leadership. Under new leadership, the SEC has moved away from regulating through enforcement and is instead making a serious effort to modernize securities laws for a tokenized world. This shift, now echoed by the U.S. Commodity Futures Trading Commission (CFTC), will do more to restore confidence among U.S. builders than any single policy move. Still, there is a need to solidify these gains through legislation that is immune to political cycles and changes in agency leadership, and the window for doing so is rapidly closing.
Encrypted Value (Letter Grade: B+)
Cryptocurrency is more than just a set of disruptive technologies; it is also an entrenched American ideology rooted in openness, permissionless innovation, resistance to censorship, and personal autonomy. In our open letter, we argue that this means that in some cases cryptocurrencies must be treated the same as other technologies, and in other cases differently.
Encouragingly, over the past year, cryptocurrency values have begun to be expressed more clearly in policy discussions and proposed legislation, such as around self-custody and privacy. Still, tensions remain. Cryptocurrency policy still oscillates between liberal instincts and reflexive containment driven by legitimate government concerns about illicit finance, tax evasion, and national security. We continue to believe that crypto-native solutions such as zero-knowledge proofs and portable identities offer constructive alternatives to familiar regulatory approaches to financial regulation that rely on financial intermediaries.
Over the past year, regulators have made tangible progress in a number of important areas, such as repealing the IRS DeFi broker rule and reining in OFAC enforcement, but other noteworthy areas, such as comprehensive tax reform that does not unfairly penalize cryptocurrency openness and permissionless structuring, remain lagging.
Progress here is real, but uneven. Continued industry engagement is critical to ensuring that the core value of cryptocurrencies is not gradually eroded by well-intentioned but blunt regulation designed to make it easier for regulators and traditional businesses. After all, cryptocurrencies were not created to assist governments, optimize finances, or simplify applications. It was created to set people free. Regulation should not eliminate this core principle by concentrating network sovereignty in the hands of states or closed platforms, thus marginalizing the autonomous communities of builders and users they are meant to serve.
Welcoming Business Environment (Letter Grade: B)
A year ago, we argued that regulatory clarity alone would not be enough to attract and retain cryptocurrency entrepreneurs. Builders also need a business environment that is predictable, fair and competitive with jurisdictions actively pursuing digital asset innovation.
The government has made meaningful progress in this regard. The tone has shifted from hostility to engagement. Entrepreneurs are less susceptible to the vagaries of bureaucracy and are more likely to encounter regulators that engage constructively rather than punitively. Notably, the OCC’s recent decision to grant state trust licenses to fintech companies and stablecoin issuers, as well as ongoing discussions about streamlining master accounts, suggest that blockchain-based companies should operate on an equal footing with traditional financial firms.
Nonetheless, structural challenges remain. Fragmentation across states continues to impose real costs on startups. While the overall stance is more welcoming, it has yet to translate into a truly frictionless environment for early builders. For example, although it is possible to use DUNA and a 501(c)(4) as a domestic token manager, projects still rely on offshore structures for tax reasons and greater certainty of public token sales.
room for improvement
While the trajectory has been extremely positive, the past year has also presented important cautionary lessons.
One development we didn’t foresee was the extent to which the president’s own family would become directly involved in the cryptocurrency market. Our original letter was published just days before the launch of a high-profile meme coin associated with the Trump brand. Whatever one thinks of the memecoin category, this incident highlights the need for clear ethical guardrails to prevent the emergence (or reality) of conflicts of interest that could seriously undermine public trust in cryptocurrency policy.
More broadly, the next phase of U.S. cryptocurrency leadership will rely less on regulators and more on the builders themselves. Policies have opened the door; now it is the responsibility of entrepreneurs to solve these problems. The next few years will test whether cryptocurrencies can deliver on their long-term promise of use cases: faster and cheaper payments, open capital markets, user-owned platforms, and programmable financial infrastructure that meets real economic needs.
Looking to the future
If the last year has proven anything, it’s that progress is possible, and when it comes, it can happen quickly.
The challenge now is to consolidate these gains – completing work on market structure legislation, deepening commitments to privacy and decentralization, and translating regulatory clarity into tangible economic growth. If builders can cope with this situation, the United States will not only host cryptocurrency innovations; It will be its driving force and shape its future.
A year ago, becoming the cryptocurrency capital of the world was purely an aspiration. Today, this goal is achievable as long as legislators and industry players remain clear-headed, principled, and ambitious about what comes next.
Ivo Nchev, Horta Andoni, Stefan Rutenberg, Donna Redl
The views represented and reflected in this article are those of the undersigned and not necessarily those of their employers.
