Farewell to the "shade" of litigation, the "legislative battle" of the crypto industry begins

Author: BitpushNews Mary Liu

The Securities and Exchange Commission (SEC) has recently launched a series of actions: revoking investigations and enforcement actions against crypto giants such as Uniswap Labs, Robinhood Crypto, OpenSea, Coinbase, Gemini, seeking settlement with Justin Sun and the Tron Foundation, releasing its position on Memecoin, saying it is not a "securities" and so on... sending a strong signal of softening of regulation.

The new SEC leadership, represented by SEC acting chairmen Mark T. Uyeda and Hester Peirce, is intending to end the previous tense confrontational stance and seeking to establish a more constructive dialogue framework with the crypto industry.

Uyeda even made a public statement, acknowledging that the SEC's regulation of cryptocurrencies in the past few years has mainly relied on "law enforcement actions" rather than "full communication", implying that the regulatory methods need to be reversed urgently. Uyeda promised to promote transparency in crypto policy development, set up a cryptocurrency working group, and actively engage in high-level dialogues with key industry players, including the Cryptocurrency Innovation Committee (CCI), MicroStrategy founder Michael Saylor and Robinhood representatives, all met with the SEC.

Crypto Reserve Acts in U.S. States are hindered, Bitcoin volatility is

the main concern

While the SEC regulatory trend changes, state governments are becoming more cautious about Bitcoin reserves.

According to statistics from the database Bitcoin Laws, 24 states in the United States have proposed strategic crypto reserve bills. But in the past month, Montana, North Dakota, South Dakota and Wyoming have all suffered setbacks and failed to pass.

Legislators generally expressed concern about the volatility of digital assets such as Bitcoin.

Jennifer Schulp, director of financial regulatory research at the Cato Institute, said in an interview with Bloomberg that the volatility of Bitcoin and all digital assets is a recognized issue, and this issue remains even if the industry prospects are improving.

As reserves are often used for low-risk investments to safeguard future funding needs, Bitcoin’s price volatility significantly reduces its attractiveness as a state-level reserve asset.

Bitui previously reported that South Dakota's reserve bill proposed to allocate up to 10% of the state's funds to Bitcoin, but it was eventually shelved. Although political figures including Trump and Senator Cynthia Lummis have proposed the idea of ​​establishing a national strategic Bitcoin reserve, states are still conservative at the practical level.

"If at the national level, a government that is very supportive of cryptocurrencies is taking the time to consider strategic bitcoin reserves, then states will do the same, rather than rushing to act," Schulp said.

Stablecoins and market structures become the focus of legislation

The White House has set up a policy task force led by venture capitalist David Sacks to develop a comprehensive regulatory framework. At the same time, Congress has also accelerated the pace of legislation. The Senate Banking Committee plans to vote on the stablecoin bill next month, and stablecoin regulation is expected to become a breakthrough in the near future legislation.

Tyler Williams, the new crypto consultant of the U.S. Treasury Department, spoke at a private digital asset event in Washington, D.C., stressing that promoting stablecoin legislation is an important task at the moment.

"We should support our friends in Congress who are committed to stable currency policy as much as possible," the former Galaxy Digital lawyer said at the event.

He believes that establishing a legal framework for stablecoins denominated in USD would be "a very good use case" driven by industry allies in Washington, and said: "If we can develop a regulatory framework for states, banking regulators and all ecosystems in a way that allows them to operate under the same rules, I think that's a pretty good outcome for Washington."

In addition to stablecoin legislation, a deeper game lies in how to set operating standards for exchanges such as Coinbase and how to define the securities and commodity attributes of digital assets, which is directly related 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 the US states are not making rapid progress in crypto reserves, the adjustment of SEC regulatory strategies at the federal level has brought some breathing room for the crypto industry. However, there are still many variables in the future regulatory framework. The friction between the crypto industry and the SEC may ease temporarily, but the "long-lasting war" surrounding cryptocurrency legislation has just begun.