What’s Next for U.S. Crypto Regulation?

I’m in Davos right now, and U.S. President Donald Trump addressed delegates online Thursday, emphasizing that the United States will become the cryptocurrency capital of the world. A few hours later, the White House issued its much-anticipated executive order on digital assets. Since winning the election in November, Trump and his team have sent all the right smoke signals, including appointing David Sacks as the White House director of cryptocurrency and artificial intelligence (AI). Under the Biden administration, the cryptocurrency industry’s biggest complaint is unclear regulation and enforcement oversight by the U.S. Securities and Exchange Commission (SEC). The Trump administration intended to fill regulatory gaps in the early days of his presidency and push a broader deregulatory agenda in the innovation sector.

With lawmakers expressing support for the industry—including House Financial Services Committee Chair Rep. French Hill (watch his Atlantic Council event on stablecoins here), new Senate Banking Committee Digital Assets Subcommittee Chair Senator Cynthia Lummis, SEC Chairman Paul Atkins, and advisors like Elon Musk and Commerce Secretary nominee Howard Lutnick—there’s growing confidence that a crypto-forward agenda is coming. But what exactly does regulatory success look like? And what does it mean for the rest of the world? We take a deep dive into the dozen bills currently before Congress and focus on three major themes for cryptocurrency regulation in 2025.

SEC vs. CFTC : A Truce at Last?

One of the main disagreements between the industry and lawmakers is whether the SEC or the Commodity Futures Trading Commission (CFTC) is the appropriate regulator for cryptocurrencies. As is often debated in Washington, are cryptocurrencies securities or commodities? Under former SEC Chairman Gary Gensler, the agency regularly fined cryptocurrency companies when it found them violating securities laws. This led some lawmakers and the industry to favor the CFTC as the regulator. Several bills under consideration, including the 21st Century Financial Innovation and Technology Act, the Digital Asset Market Structure and Investor Protection Act, the Responsible Financial Innovation Act, and the BRIDGE Digital Assets Act, address the SEC and CFTC’s jurisdiction over cryptocurrencies.

One of the biggest promises the Trump campaign made to the cryptocurrency industry was to end this era of enforcement regulation. Paul Atkins, Trump’s pick to succeed Gary Gensler as SEC chairman, is seen as friendly to the cryptocurrency industry. His appointment follows a series of legal rulings over the past two years that favored companies and were unfavorable to the SEC. Once sworn in, Atkins will have dual duties: He’ll need to clarify the SEC’s jurisdiction over the cryptocurrency market and then actually enforce regulation of crypto assets — their issuance, use, and role in the U.S. economy. Congress will step up these efforts, and you can expect several bills to rebalance the jurisdiction and enforcement powers of the SEC and the CFTC. See below for a full breakdown.

Stablecoins, hello!  

Stablecoins now have more than $190 billion in circulation worldwide. They can provide much-needed liquidity to the cryptocurrency market and act as a conduit between crypto and non-crypto assets. Stablecoins are increasingly being used to address humanitarian aid and cross-border payments, such as remittances to Ukraine.

While 98% of stablecoins are pegged to the U.S. dollar, more than 80% of stablecoin transactions occur abroad. This makes these “digital dollars” subject to regulatory frameworks developed in Europe, Asia, and Africa. Europe’s stablecoin framework, the cryptoasset market, fully takes effect in January 2025. The implementation of the framework should lead to some rethinking across the Atlantic about stablecoin legislation being considered by Congress. The Payments Stablecoin Clarity Act and the Loomis-Gillibrand Payments Stablecoin Act are two of the bills being considered. The Clarity Act has been under consideration in the House Financial Services Committee for the past year, approaching bipartisan consensus several times. It has evolved into a discussion draft proposed by Senator Bill Haggerty. The Loomis-Gillibrand Act was introduced in the Senate in May 2024.

As our cryptocurrency regulation tracker shows, it is regulation in the United States, more than anything else, that plays a key role in the future of cryptocurrencies around the world. While other countries have been developing their own regulatory frameworks, the United States has lagged behind — a situation that may finally change in the coming months.

Groundbreaking National Bitcoin Reserve   

Congress is likely to continue discussing the Bitcoin reserve issue as Lummis has been appointed as the chairman of the Senate Banking Committee’s Digital Assets Subcommittee. The logic behind the bill is to buy Bitcoin to pay down the Treasury debt. There are still some unanswered questions about Lummis’ Bitcoin reserve proposal — including a complex funding model that revalues ​​gold certificates from 1993 prices to current values.

Then there are proposals for a U.S. central bank digital currency (CBDC). The Trump administration and Republican lawmakers have made it clear that a retail CBDC or digital dollar will not be in the U.S. This puts the U.S. at odds with peers like Europe, which is set to launch a digital euro pilot in 2025, and the U.K., which just launched a CBDC lab last week. The executive order instructs all institutions to cease any ongoing CBDC work.

A breakdown of all the major legislation currently under consideration is provided below.