The White House set a March 1 deadline for the banking industry and crypto companies to reach an agreement on the performance of stablecoins, clearing the way for the Clarity Act, market structure legislation aimed at putting the industry on solid legal footing in the US.
The House approved the clarity seven months ago. The Senate has set many deadlines to approve it and none of them have been met. The last deadline also passed without an agreement.
The cryptocurrency industry has been fixated on legislation as the next catalyst, as if it were the only path to much-needed regulatory clarity in the world’s largest economy.
But legislation is not the only way.
Existing laws granting authority to market regulators at the Securities and Exchange Commission and the Commodity Futures Trading Commission are broad and flexible. Those agencies are acting now.
New legislation would protect against future Gary Genslers, but the Gary Gensler era is over. President Donald Trump appointed a friendly president to bless the industry, just as Gensler had appointed a hostile one to torment it.
And while everything else Trump has done regarding cryptocurrencies has created political headwinds, it could be that all he really needed to do was pick the right head for the SEC, and I suspect that’s the case.
Trump appointed a veteran, Paul Atkins, who knows how to write regulations that withstand legal challenges. Trump then appointed one of Atkins’ deputies to run the other investment agency, the CFTC, ensuring regulation is harmonized across markets. All the industry has to do to not screw this up is avoid another FTX-like implosion.
It is the cryptocurrency game to lose.
It’s not his first rodeo
Paul Atkins worked for six years at the SEC in the 2000s, under three different presidencies. Since then he has served as an advisor to the Chamber of Digital Commerce and Securitize.
He was sworn in in April 2025. A few weeks later, he spoke at an event at the SEC office and said the agency has the authority to give the crypto industry the regulations it needs to operate.
Later, before a dozen reporters, he was asked if he needed to wait for Congress to draft legislation on market structure before he could act. He repeated that his staff can and would act with or without new legislation.
Atkins confidently promised to act, like a regulator who understands the scope of his current authority.
Harmonization
And Atkins will align himself with the head of the SEC’s sister agency, the CFTC.
Gensler was never aligned with Rostin Benham, the previous head of the CFTC. Benham continued to ask Congress to take action, which Gensler continued to say was not necessary.
Benham clearly did not believe that every coin was a value, but Gensler believed that only Bitcoin was free from his scrutiny. They were not harmonized.
But to effectively regulate and give founders confidence, it is key that agencies not fight over when and if a digital asset can move from the SEC’s jurisdiction to that of the CFTC.
So I think one of the key reasons Atkins hasn’t released draft rules for public comment yet is that he wanted to do it in conjunction with the CFTC. However, Trump changed course by naming a chairman for that agency, and the new helmsman, Michael Selig, was not sworn in until late December.
It wouldn’t be surprising if, one day, we learned that Atkins convinced the president to change course on appointing CFTC chairs to ensure the two agencies work well together.
Expect an official memorandum of understanding between the two agencies soon outlining responsibilities. This agreement will be reminiscent of the historic Shadd-Johnson agreement of 1981.
the new sheriff
I suspect that by this fall, Project Crypto will have submitted draft rules, each written in consultation with the other, to their respective commissions.
By next spring, those rules will have been modified based on public comments and, most likely, finalized.
This will be the first administration that really write rules thinking about decentralized financial networks.
Under the new rules, it should be possible, for example, for exchanges like Kraken, Coinbase and Crypto.com to finally say that all Its operations are registered with an agency and under state supervision.
It should also be possible for startups to raise funds with token sales. Some of those tokens are likely to enjoy rights that entrepreneurs avoided during the era of regulation through law enforcement, such as the ability to distribute income.
As long as the rules are written conservatively enough to survive court challenges, the industry will likely have two or three years to grow before it is possible to reverse Atkins and Selig’s work (because doing so will require both a Senate appointment process and and a new regulatory process).
Fait accompli
While we all know that cryptocurrencies have always been an industry that welcomes new entrants, the president’s family did digital assets no favors by launching memecoins, a stablecoin, and bitcoin miners. Those activities could have been enough to torpedo any hopes of meeting the crypto lobby’s ambitions for this session of Congress.
But while Congress dithers, agency staff are drafting rules.
If the SEC and CFTC collaborate effectively (both agency leaders announced today that several crypto policies are coming), any deal they come up with could eventually become law anyway. After all, Congress codified the Shadd-Johnson agreement in the early 1980s.
So lobbyists may finally get the legislation they want, but only after cryptocurrencies have gone mainstream anyway, without Congress, which is why Trump’s decision to appoint Paul Atkins may have been enough to give the industry enough legal room to reach its potential.
