President Donald Trump – having recently introduced his own meme coin — is embracing an industry that he previously decried. Crypto companies are expressing renewed optimism that legislation clarifying industry regulations will finally be signed into law.
But even with Republican control of Congress, lawmaking may be off to a slow start.
“We haven’t brought that up as a lead agenda item, but we’ll continue to talk about it,” Senate Majority Whip John Barrasso told NOTUS.
Trump signed an executive order Thursday “protecting and promoting” the use of cryptocurrencies and creating a working group to consider creating a national stockpile of digital assets. The crypto industry has long called for Congress to pass friendly regulations, claiming the Biden administration tried to “weaponize the lack of clarity in the rules,” Coinbase CEO Brian Armstrong told NBC.
A bill that sought to modernize cryptocurrency regulations, backed by crypto supporters, passed the House last Congress, but died in the Democrat-controlled Senate.
Congress may once again be the sticking point.
“I think there’s a lot of talk, but there doesn’t seem to be much will to go forward with it,” Sen. Roger Marshall told NOTUS.
That’s not true for everyone. Sen. Cynthia Lummis – chair of the Senate Banking Committee’s first ever panel devoted to digital assets, who met with BTC Inc CEO David Bailey this week — said the need for legislation is pressing.
“We need to have a legislative framework for digital assets so we understand what’s a security, what’s a commodity, we need to have a regulatory framework for stablecoins,” she told NOTUS. “It’s absolutely imperative.”
The Financial Innovation and Technology for the 21st Century Act passed last Congress would have set up a framework where cryptocurrencies are regulated by the Commodity Futures Trading Commission as digital assets rather than the Securities and Exchange Commission as securities if their product was decentralized. In addition to this, issuers would have been able to self-certify that their products are decentralized, which opponents argued would constitute a lax regulatory framework. Joe Biden’s securities regulator had warned the bill could introduce new financial risks.
The details of any new regulation, and the process by which it would become law, are still under consideration.
“Process wise, I’m pretty agnostic. But I definitely want to see a bill on the books,” Lummis said, citing crypto-friendly House lawmakers Reps. French Hill and Glenn Thompson. Lummis has previously introduced legislation with Democratic Sen. Kirsten Gillibrand.
In the House, Rep. Andy Ogles, who serves on the House Financial Services Committee, said he expects debate on cryptocurrency legislation.
“That’ll be at the top of the conversation in that subcommittee,” he said. “But I think for a lot of people it’s about putting up guardrails and letting the free market take over from there.”
Several Republican lawmakers — both on and off the Financial Services Committee — told NOTUS they wanted to see Congress do a little bit of something, but not so much that the industry becomes overregulated.
Republicans lawmakers have also clearly taken notice of Trump’s change of heart on crypto.
“The president has said we’re going to really focus on expanding crypto,” Rep. Nick Langworthy said. “We can’t be left behind in that area. We can’t concede ground to any other country in the world, so we have to have a marketplace that protects the ability to lead.”
Earlier this month, Rep. Mike Collins, one of a handful of members who has purchased crypto, disclosed the purchase of Ski Mask Dog, a meme coin about exactly what it sounds like: dogs in ski masks.
“Anytime the federal government gets involved in anything it just messes it up,” Collins told NOTUS of what he thought about crypto regulation.
Of late, rug pull schemes have become a principal issue, where celebrities or public figures will put a coin on the market where it raises money and then abandon the project, taking their earnings and leaving investors with a worthless coin. According to the FBI, Americans lost $5.6 billion to cryptocurrency fraud in 2023.
Rep. Nick Begich, who disclosed the possession of over $100,000 in cryptocurrency assets as part of his congressional candidacy, told NOTUS he saw some room for regulation.
“I think there need to be some stronger guardrails that protect consumers. Certain securities laws that ensure that consumers are fully informed about the prospectuses of investment opportunities as they come up,” he said, pointing to the quarterly and annual reporting requirements that companies are subject to. “Those regulatory standards ensure that the investor is fully informed before making an investment. And so I do think that programs like those are important as they apply to cryptocurrencies.”
House Republicans pulled a decent number of Democrats onto their side when they passed the crypto bill last year. There are still Democrats in the lower chamber willing to work with them on the issue.
“There’s a real need for regulatory clarity,” Rep. Ritchie Torres, a Democrat on the Financial Services Committee who voted with Republicans on FIT21, told NOTUS. “And there’s a growing bipartisan consensus in favor of reasonably and responsibly regulating crypto.”
There may be areas of bipartisanship, but there are also plenty of Democrats who want much stricter regulations around the industry than Republicans are suggesting.
Perhaps unsurprisingly, Sen. Elizabeth Warren is one.
“The last time he was president, Trump said that crypto was a scam and should be shut down. Now he’s figured out how he personally can profit from it. We need some basic rules around crypto so that anyone who tries to put money in one, Trump supporter or anyone, doesn’t get ripped off in a crypto scam,” she told NOTUS.
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Violet Jira is a NOTUS reporter and an Allbritton Journalism Institute fellow.