Bidding farewell to the litigation "cloud," the "legislative battle" of the cryptocurrency industry has begun

Author: BitpushNews Mary Liu

The U.S. Securities and Exchange Commission (SEC) has recently taken a series of actions: withdrawing investigations and enforcement actions against crypto giants such as Uniswap Labs, Robinhood Crypto, OpenSea, Coinbase, and Gemini, seeking a settlement with Justin Sun and the Tron Foundation, releasing a stance on Memecoins stating they are not "securities," etc… This sends a strong signal of regulatory softening.

The new leadership of the SEC, represented by Acting Chair Mark T. Uyeda and Hester Peirce, is intentionally ending the previously confrontational stance and seeking to establish a more constructive dialogue framework with the crypto industry.

Uyeda has publicly stated that the SEC's regulation of cryptocurrencies over the past few years has primarily relied on "enforcement actions" rather than "adequate communication," suggesting that the regulatory approach urgently needs to be reversed. Uyeda has committed to promoting transparency in crypto policy-making, establishing a cryptocurrency working group, and proactively engaging in high-level dialogues with key industry participants, including the Crypto Currency Innovation Committee (CCI), MicroStrategy founder Michael Saylor, and representatives from Robinhood.

U.S. State Crypto Reserve Bills Face Obstacles, Bitcoin Volatility a Major Concern

While the SEC's regulatory stance is shifting, state governments are becoming more cautious regarding Bitcoin reserves.

According to statistics from the database Bitcoin Laws, 24 states in the U.S. have proposed strategic crypto reserve bills. However, in the past month, crypto reserve bills in Montana, North Dakota, South Dakota, and Wyoming have encountered setbacks and failed to pass.

Legislators generally express concerns about the volatility of digital assets like Bitcoin.

Jennifer Schulp, Director of Financial Regulation Studies at the Cato Institute, stated in an interview with Bloomberg that the volatility of Bitcoin and all digital assets is a recognized problem, and this issue persists even if the industry's outlook is positive.

Since reserves are typically used for low-risk investments to secure future funding needs, Bitcoin's price volatility significantly diminishes its attractiveness as a state-level reserve asset.

Bitpush previously reported that South Dakota's reserve bill proposed allocating up to 10% of the state's funds to Bitcoin, but it was ultimately shelved. Although political figures, including Trump and Senator Cynthia Lummis, have proposed establishing a national strategic Bitcoin reserve, states currently maintain a conservative approach in practical operations.

Schulp stated, "If at the national level, a government that strongly supports cryptocurrencies is taking time to consider a strategic Bitcoin reserve, then it is reasonable for states to adopt the same approach rather than rushing to act."

Stablecoins and Market Structure Become Legislative Focus

The White House has established a policy task force led by venture capitalist David Sacks to develop a comprehensive regulatory framework. Meanwhile, Congress is accelerating the legislative process, with the Senate Banking Committee planning to vote on stablecoin legislation next month, making stablecoin regulation a potential breakthrough in recent legislation.

Tyler Williams, the new crypto advisor at the U.S. Treasury, spoke at a private digital asset event in Washington, D.C., emphasizing that advancing stablecoin legislation is an important task at present.

The former Galaxy Digital lawyer stated at the event, "We should support our friends in Congress who are dedicated to stablecoin policy as much as possible."

He believes that establishing a legal framework for dollar-pegged stablecoins would be "a very good use case" for industry allies to promote in Washington, and added, "If we can create a regulatory framework that allows states, banking regulators, and the entire ecosystem to operate under the same rules, I think that would be a pretty good outcome for Washington."

Beyond stablecoin legislation, a deeper game is at play regarding how to set operational standards for exchanges like Coinbase and how to define the securities and commodity attributes of digital assets, which directly relates to the division of responsibilities and power boundaries between the SEC and the Commodity Futures Trading Commission (CFTC).

Short-term Regulatory Pressure May Ease, Long-term Challenges Remain Severe

Overall, although progress on crypto reserves at the state level is slow, the adjustment of the SEC's regulatory strategy at the federal level has provided some breathing room for the crypto industry. However, the future regulatory framework still holds many uncertainties. The friction between the crypto industry and the SEC may temporarily ease, but the "protracted battle" surrounding cryptocurrency legislation has only just begun.