Regulation Long Overdue: Feds Strive for a Friendlier Approach to Cryptocurrency
7.18.2025
Long-sought U.S. federal regulations around cryptocurrencies have come together which should ease the tension in the digital marketplace.
The federal administration has initiated a more friendly approach than previous administrations to federal regulation by establishing a working group on digital assets and encouraging a more flexible approach to regulation. In addition, three bills passed through the U.S. House of Representatives on July 17 to provide much sought after guidance.
Those tensions and the guidance were among the topics discussed two days earlier during a continuing education program: “Recent Cryptocurrency Issues”, which was sponsored by the Committee on Continuing Legal Education, the Private Investment Funds Committee, the Securities Regulation Committee, and the Business Law Section.
Stuart Levi, intellectual property and technology partner at Skadden, Katrina Paglia, chief legal officer at Pantera, and Jon Firester, managing director in the capital markets consulting practice at EY, were the speakers. Anastasia Rockas, partner, investment management at Skadden, and chair of the New York State Bar Association’s Private Investment Funds Committee, moderated the hour-long talk.
The GENIUS Act
The greatest challenge with blockchains and cryptocurrencies is that they are exchanged on decentralized open markets and are thus prone to fluctuate in value.
However, in the last few years stablecoins have emerged. Stablecoins are digital assets tied to tangible assets, like the U.S. dollar, and are therefore less volatile because the money used to purchase them is placed in an actual bank.
The Guiding and Establishing National Innovation for U.S. Stablecoins Act, the first federal crypto law in U.S. history, authorizes and regulates the distribution of stablecoins by establishing a regulatory framework for issuers and coin holders. Its passage by the Housel allows only U.S regulated banks and authorized firms to issue stablecoins, which are backed 1:1 by the U.S. dollar or other liquid assets. The Genius Act could bring the once obscure technology further into the mainstream economy according to The Washington Post.
“The thought is that a well-regulated stablecoin could become a very efficient payment mechanism very fast, if not instantaneous, and be very inexpensive to process, allowing for both peer-to-peer transactions as well as more centralized transactions,” said Firester.
Levi agreed with that assessment and explained some additional advantages of stablecoins.
“One thing they offer is the ability to send money around the world quickly, cheaply, and nearly instantaneously. But the second thing to keep in mind is the credit card payment rails, which have worked very well for a long time, and still do work very well, impose a fee on merchants and the merchants are increasingly pushing that fee onto customers.”
Similar stablecoin fees should be less burdensome on the buyer.
The Clarity Act
Another law the House passed on July 17 is the Digital Asset Market Clarity Act which divides regulatory oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission with the SEC overseeing tokens that meet securities criteria, while digital commodities will come under CFTC’s jurisdiction.
It still needs to pass through the Senate along with a third bill the House passed during what has been dubbed “Crypto Week” on Capitol Hill. The Anti CBDC Surveillance Act that would prevent the Federal Reserve from issuing digital currency.
Paglia foreshadowed this outcome.
“We are optimistic that they are going to get passed this year. We’ll go back to the regulators with those laws in in mind, and we’ll end up, hopefully, in a place where we know where in the lifespan of a digital asset are you a commodity, are you a security?,” said Paglia.
Increasing the Pace of Federal Guidance
Overall, the U.S. has moved slower than the European Union and China in putting federal regulations in place regarding digital assets, but the passage of the aforementioned bills signal a greater urgency.
“The U.S. is moving quickly to apply a regulatory framework that should help the good actors in this space,” said Firester. “It’s good for players that either are in the U.S. or want to participate in the U.S. Many crypto firms have been pushing for correct regulation so they can operate in a compliant way rather than trying things and discovering through enforcement what was and was not frowned upon.”
Go HERE to view the entire program.
