Crypto regulation must be established via an act of Congress for it to have any lasting impact and significative effect within the legal framework of the United States. This perspective was emphasized by former Congressman Wiley Nickel in a recent discussion about the future of cryptocurrency laws. He pointed out that executive orders, such as those previously issued, can easily be rescinded or altered with the change in presidential administration.
Nickel highlighted the need for bipartisan collaboration in order to implement comprehensive regulations that will stand the test of time. He stated,
“If you want lasting change in Washington, you must move legislation through Congress. Otherwise, if you’re reliant on executive actions, you’re simply setting up a system that can be overturned with every new administration.”
The potential instability of executive orders was brought to the forefront when discussing President Trump’s executive orders from January 23, which established the Working Group on Digital Assets. These orders not only prohibited the development of a central bank digital currency (CBDC) but also initiated significant moves, including a proposed Bitcoin strategic reserve. The transient nature of this regulatory framework showcases why paving a legislative path is crucial.
Both the House of Representatives and the Senate are rushing to push through important pieces of legislation. Notable actions include Representative Tom Emmer’s reintroduction of a bill banning CBDCs in the U.S. and Senator Cynthia Lummis’s reintroduction of the Bitcoin Act — legislation that facilitates the U.S. purchasing more than 1 million Bitcoin (BTC). These moves reflect a growing urgency to establish a regulatory framework that protects investors while also fostering innovation within the cryptocurrency market.
Further, on March 12, the House took significant steps by repealing the IRS broker rule that required decentralized finance platforms to report transactions to the IRS, an effort that highlights Congress’s ongoing commitment to redefine the regulatory environment for digital assets. Additionally, Representative Byron Donalds announced plans to draft legislation that would codify the Bitcoin strategic reserve into federal law, ensuring it remains intact against future administrative changes.
Looking ahead, Democrat Representative Ro Khanna expressed optimism during the Blockworks Digital Asset Summit, predicting that Congress could pass comprehensive crypto regulations by 2025. This would include legislation concerning stablecoins and the overall market structure. As discussions continue, the future of crypto regulation remains pivotal for various stakeholders including investors, developers, and the broader economy.
In conclusion, without concrete and permanent regulations passed through Congress, the future of cryptocurrencies in the U.S. will remain uncertain, swaying like a pendulum with each new administration. It is imperative for legislators across the aisle to collaborate on these vital laws that will set the standard for digital asset governance in the years to come.
