Crypto industry advocates are expressing optimism about the Trump administration’s efforts to provide clearer regulations. However, they are urging policymakers to act quickly in order to reverse the previous administration’s enforcement-based approach to regulation.
These calls were made during a hearing on February 11th by the US House Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence. The subcommittee heard testimony from five witnesses regarding the future of digital assets regulation.
Jonathan Jachym, deputy general counsel at Kraken, was the first to speak and focused on the need for “fundamental rules for centralized intermediaries.” Jachym argued that effective market structure policy should begin with Congress granting spot market authority to the Commodity Futures Trading Commission (CFTC), which would then regulate centralized intermediaries and secondary market transactions in digital commodities. He emphasized the importance of avoiding the application of centralized rules to decentralized protocols that lack centralized governance systems.
Ji Hun Kim, president and acting CEO of the Crypto Council for Innovation, echoed Jachym’s sentiments. Despite recent progress under President Donald Trump, Kim believes that more needs to be done to address the damage caused by the previous administration’s enforcement-based approach. He specifically criticized former Securities and Exchange Commission Chair Gary Gensler for bringing numerous enforcement actions related to digital assets without providing clear guidance or regulations to identify when an asset should be considered a security.
The discussion also touched on the STABLE Act, a draft bill released by House Financial Services Committee Chair French Hill and Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee Chair Bryan Steil on February 5th. The bill aims to provide regulatory guidance for stablecoin issuers. Former CFTC Chair Timothy Massad, who currently represents Harvard University’s Kennedy School of Government, expressed support for the bill’s features but also highlighted several deficiencies. He pointed out the lack of ongoing federal supervision of state issuers, the failure to address what happens if a stablecoin issuer goes bankrupt, and the inadequate measures to address financial crime and sanctions evasion. Massad also mentioned the need for enforcement mechanisms, penalties, and territorial provisions. Additionally, he emphasized the importance of giving regulators sufficient authority and discretion due to the potential significance and unpredictable evolution of stablecoin markets.
According to CoinMarketCap, stablecoins, including USDt, USDC, PYUSD, and other competitors, are collectively valued at $230 billion.