Crypto in 2025: What Changes Are Coming for Digital Assets?
The crypto community is closely monitoring developments in Washington. With a new Congress, a revamped administration, and a president supportive of digital assets, significant shifts in cryptocurrency regulation may be on the way.
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After years of ambiguity and piecemeal attempts to establish a foundational framework for crypto legislation, 2025 might mark a pivotal moment when the U.S. finally adopts a clear legal stance on the functioning of digital currencies.
The First Crypto-Friendly Congress in U.S. History
The U.S. is on the brink of forming its most crypto-friendly legislative body yet. Industry leaders are optimistic that this development will lead to comprehensive, long-awaited legislation offering clarity and stability for the digital asset market.
At the forefront of this shift is French Hill, the newly appointed Chair of the House Financial Services Committee and a Republican from Arkansas. A vocal advocate for stablecoin regulation, Hill has consistently pushed forward initiatives in this area. Among the key bills in his portfolio is the FIT21 Act, aimed at reforming the structure and oversight of digital asset market regulators. Hill has made it clear that advancing these initiatives will be a top priority for the new Congress.
French Hill supports the FIT21 Act. Source: CNN
Ron Hammond, Director of Government Relations at the Blockchain Association, noted that while lawmakers will need some time to adjust, substantial progress can be expected shortly after.
“We will very soon see the reintroduction of many bills that we are already very familiar with,” Hammond commented, highlighting that work on crypto regulation won’t start from scratch but will build on existing efforts.
Treasury Bitcoins: Will Crypto Tax Rules Change in 2025?
The concept of creating a strategic Bitcoin reserve—building a national stockpile of digital assets—has generated significant market buzz, fueling optimism among crypto investors.
The proposal to accumulate one million bitcoins over five years underscores Bitcoin's growing strategic importance as a tool to strengthen national economies and address escalating sovereign debt. While its implementation in the short term seems unlikely, the idea raises critical questions about long-term digital asset management strategies at the governmental level.
Related: From Digital Gold to Global Reserve: Cathie Wood on Bitcoin
Tax policy will undoubtedly take center stage in 2025. This year marks the expiration of the 2017 Tax Cuts and Jobs Act, introduced during the Trump administration, which offered substantial benefits for investors in tech startups. As Congress revisits tax legislation, they may not only repeal parts of this Act but also consider taxing staking rewards.
On the brighter side, proposed changes suggest taxing staking rewards only when they are sold, potentially easing the tax burden for participants in the crypto sector.
FIT21 and the Decentralization Challenge
The Financial Innovation and Technology for the 21st Century Act (FIT21) is a key focus in the ongoing debate over cryptocurrency regulation in the U.S. Its main goal is to clarify the division of authority between two major financial regulators: the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). By defining the roles of these agencies, FIT21 aims to eliminate regulatory uncertainty and create a more supportive environment for the crypto industry.
The proposed legislation seeks to delineate the responsibilities of the SEC and CFTC based on the classification of digital assets. Digital assets deemed securities would fall under the SEC's jurisdiction, while the CFTC would regulate cryptocurrency-based commodity futures. This clear division is designed to resolve existing ambiguities and ensure more effective oversight of the market.
However, the crypto community generally prefers the CFTC as the primary regulator of the cryptocurrency market. The negative reputation surrounding the SEC is unlikely to be mitigated simply by replacing its leadership. The mistrust and hostility associated with Gary Gensler's tenure will be difficult to overcome. Key players in the crypto industry tend to trust former CFTC Chair Chris Giancarlo, a blockchain advocate, founder of the Digital Dollar Project, and a figure reportedly considered by Donald Trump for the White House ‘crypto czar' role.
Chris Giancarlo. Source: Bloomberg
One of the most debated aspects of FIT21 is its approach to decentralization. The bill proposes a differentiated regulatory framework for centralized and decentralized crypto projects, creating new challenges for regulators. Clearly defining the degree of decentralization is a complex issue. Critics of the bill fear that overly strict criteria for decentralization could hinder the growth of decentralized finance (DeFi) protocols.
Related: Nakamoto Coefficient: A Reliable Measure of Decentralization?
According to Ron Hammond, Director of Government Relations at the *Blockchain Association, the approach to FIT21 could evolve under the new regulatory environment, particularly with SEC Chair Paul Atkins, appointed by Donald Trump, at the helm. Hammond believes significant progress could be made through agency-level regulation, bypassing the need for new legislation. “A lot can be achieved through regulation without having to work on it at the legislative level,” Hammond remarked. This suggests a potential for a more flexible and adaptive regulatory approach that aligns with the fast-paced evolution of the crypto industry while addressing urgent legal needs without unnecessary delays.
*The Blockchain Association is a U.S.-based nonprofit organization that unites leading investors and companies in the crypto sector. Its mission is to create a supportive regulatory framework for the digital asset market in the U.S. The association educates policymakers on crypto-related issues and contributes to drafting rules to ensure the industry's safety and competitiveness.
Ron Hammond. Source: genfinity
Related: Why Is Atkins Better Than Gensler?
Stablecoins Remain in the Crossfire
The regulation of stablecoins has long been a hot topic among lawmakers, yet meaningful progress remains out of reach. Meant to provide stability in the volatile world of cryptocurrencies, these assets have themselves become a point of contention, requiring clear legal solutions.
A central issue in the debate over stablecoin regulation is the division of authority between state and federal agencies. The House Financial Services Committee has been discussing the need for greater federal control over stablecoin issuance for years. Advocates argue that a unified federal standard would enhance investor protection and prevent regulatory arbitrage, where companies gravitate toward jurisdictions with the most lenient rules.
At the same time, an alternative perspective supports strengthening the role of state regulators. This approach may gain traction with the Republican majority in Congress, which traditionally advocates for greater state autonomy. Reaching a compromise between these two viewpoints will be pivotal in passing any stablecoin legislation.
The Senate is also addressing the issue of stablecoin regulation. Republican Senator Bill Hagerty has introduced a bill proposing a regulatory framework similar to the one under consideration in the House of Representatives. A central element of his proposal is a requirement for full transparency in payments made with stablecoins. Additionally, Hagerty's bill suggests exempting issuers with stablecoin reserves below $10 billion from federal regulation.
This approach may suggest a growing consensus between the two chambers of Congress on the necessity of stablecoin regulation and the legal framework required to implement it.
Senator Bill Hagerty. Source: axios
Despite this progress, the chances of passing stablecoin legislation in 2025 remain uncertain. According to Miller Whitehouse-Levine, Chief Executive Director of the DeFi Education Fund, the probability of enacting such a law next year is estimated at just 25%.
This cautious outlook highlights persistent disagreements and the inherent challenges of achieving compromise among the various stakeholders.
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