U.S. needs clear regulations for digital assets ASAP

Jan. 23, 2025, was a turning point for the United States in its digital financial leadership.

President Trump announced an Executive Order to establish regulatory clarity in digital assets and blockchain technology. America has long been a global leader at the intersection of financial services, technology, and innovation. If the nation hopes to secure this position as the digital assets industry continues to grow, it must develop regulatory frameworks that enable the responsible adoption of these technologies.

The laws currently being applied to digital assets were drafted in the 1930s, at a time when these technologies and decentralized wealth-building were unimaginable. Current efforts to box blockchain technology operations within these outdated guidelines have stifled innovation and currently prevent US firms and their clients from benefiting from these innovations. Meanwhile, other countries have made significant progress in passing digital asset regulations that ensure investor protections and clear guidelines for participants.

The European Union, for instance, passed the Markets in Crypto-Assets Regulation (MiCA) in 2023, which provides uniform guidelines throughout the EU and allows for greater transparency and financial stability. Additional countries like Singapore, Switzerland, the UAE, and Canada have also passed legislation to create clear guidelines for participants to operate within.  The engagement between regulators and industry has driven the successful legislation into these jurisdictions.  In the US, many firms and industry groups like the Boston Blockchain Association work diligently to highlight these participants and industry engagement.

The president’s Executive Order was a promising first step. The creation of the Presidential Working Group on Digital Assets will help to make the development of a regulatory framework for digital assets a federal priority. The group will be chaired by David Sacks,  the White House AI & Crypto Czar, and members will include the Secretary of the Treasury, the Securities and Exchange Commission Chair, Chair of the Commodity Futures Trading Commission, French Hill, Chair of the House Financial Services Committee, Tim Scott, Chair of the Senate Banking Committee, and Senate Agriculture Chairman John Boozman and House Agriculture Chairman G.T. Thompson.  Crucially, the group will consult with experts in the digital assets ecosystem, which ensures the regulations will be informed by industry expertise. Federal agencies will also provide their own recommendations to the Working Group. An example of these is SEC Chair Hester Peirce’s Digital Asset Working Group, which quickly rescinded the SEC SAB 121 Accounting rule that prevented US public banks from holding digital assets.

While these working groups will consider current and more modern regulations, Congress must be the body that makes them federal law. The newly formed congressional working group is a crucial step for Congress in creating and passing bipartisan digital asset legislation. The president’s continued urgency is also essential for leading Congress to take the necessary measures.

Congress also needs to clearly delineate the roles of the SEC, CFTC, and OCC, which would provide digital asset firms with greater clarity on the current asset boundaries, rules, and path to operate within. The responsibilities of the SEC, CFTC, and OCC must be presented in a way that reduces ambiguity around these commissions.  Institutional participants want the same investor protections, responsible frameworks, KYC (Know Your Customer) and AML (Anti-Money Laundering) guidelines, and transparency many lawmakers and regulators speak to.

When Congress takes action to create further clarity, digital assets will be able to flourish in the United States, offering enhancements to traditional finance. Many underserved communities in the nation face barriers to accessing traditional banks. Clear regulations in digital assets will also enable them to access alternatives to manage their own finances. Additionally, establishing a US regulatory framework will ensure the American economy remains competitive, and incent companies to remain and invest in the US.

Congress must urgently enshrine the regulatory frameworks created by the working groups into law. If America secures its position as the center of digital finance now, the nation will democratize access to wealth-building and will create responsible opportunities for generations to come.

Doug Mehne is the Chair of the Boston Blockchain Association