USDU.S. Crypto Shift Weekly Recap: FDIC, DeFi, State Bitcoin Moves
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FDIC Allows Banks to Offer Crypto Services Without Prior Approval, Eases Regulatory Burdens
The FDIC has issued new guidance allowing supervised banks in the U.S. to engage in crypto-related activities without prior approval, effective March 2025. This policy shift rescinds a 2022 requirement for banks to notify the FDIC before initiating crypto operations, thereby broadening their scope for offering crypto services while still requiring notification of involvement in such activities. Acting Chairman Travis Hill emphasized this change aims to align banking practices with evolving digital trends while managing associated risks. The FDIC acknowledges ongoing risks in the crypto space, including market volatility and anti-money laundering compliance. This move reflects regulatory agencies' efforts to provide clearer guidance and reduce obstacles for banks experimenting with digital assets. Noteworthy is the removal of "reputational risk" from consideration in bank supervision, signaling a more supportive stance toward legal crypto services and a collaborative effort with other federal regulators to refine oversight of digital assets.
Senate Passes Bill to Repeal IRS DeFi Rule; Trump Poised to Sign
On March 26, 2025, the U.S. Senate voted 70-28 to repeal the IRS's DeFi broker rule, which is anticipated to significantly uplift the cryptocurrency sector. With President Trump expected to sign the bill (H.J. Res. 25) by the end of the week, it outlines a commitment to enhance blockchain innovation by reducing regulatory pressures on DeFi developers. The House had previously approved the bill with a 292-132 vote. Supporters, including crypto advocate Dan Gambardello, believe that less regulation will spur innovation. Additionally, a coalition comprising significant industry players, such as Coinbase and Kraken, urged Congress to address the DOJ's stringent interpretations surrounding money transmission laws, which they argue complicate the legal landscape for non-custodial developers. If signed, this legislation will represent the first crypto-related law in the U.S., marking a potential turning point in the relationship between cryptocurrency and regulation.
More U.S. States Push Bitcoin Reserve Plans
Several U.S. states are advancing legislation to integrate Bitcoin into their financial strategies. Arizona's House Rules Committee has approved two bills: SB 1373, proposing a Strategic Digital Assets Reserve funded by crypto assets seized in criminal investigations, and SB 1025, allowing state investment in Bitcoin through treasury and retirement funds. Kentucky Governor Andy Beshear signed the "Bitcoin Rights" bill (House Bill 701) into law, safeguarding citizens' rights to use digital assets and self-custody wallets, and prohibiting discriminatory zoning against crypto mining. Oklahoma's House passed the Strategic Bitcoin Reserve Act with a 77-15 vote; the bill now awaits Senate approval and the governor's signature. In Ohio, Representative Steve Demetriou is advocating for the creation of a State Bitcoin Reserve, following President Donald Trump's establishment of a national Bitcoin reserve.
North Carolina Proposes Bills to Allow Up to 5% of Pension Funds in Cryptocurrencies
North Carolina lawmakers have introduced two bills, House Bill 506 and Senate Bill 709, aiming to permit the allocation of up to 5% of certain pension fund balances to cryptocurrencies and digital assets. The proposed legislation seeks to establish an independent “Investment Authority” to oversee these investments, which would operate separately from the State Treasurer’s control. This authority would manage investments for various state retirement funds and would be required to ensure that crypto assets, including cryptocurrencies, stablecoins, and non-fungible tokens, are maintained with secure custody solutions. Additionally, the authority must evaluate the risk and reward profile of these digital investments. This initiative follows earlier proposals, including House Bill 92 and Senate Bill 327, which sought to allow the State Treasurer to invest in Bitcoin, highlighting the growing interest in cryptocurrency investments among US lawmakers amid shifting political landscapes.
South Carolina Proposes Digital Assets Reserve Bill to Combat Inflation
On March 28, 2025, South Carolina proposed a bill, H4256, to create a strategic Digital Assets Reserve, becoming the latest state to address the economic challenges posed by inflation. The state treasurer will manage this reserve, with provisions allowing for up to 10% of the state portfolio to be invested in Bitcoin (BTC) and other digital assets, with individual assets capped at 3% of the total digital portfolio. The bill emphasizes the need for secure custody and mandates protocols to protect these digital investments. This legislative move comes as part of a broader trend, with 35 states exploring Bitcoin reserve bills, notably including Oklahoma, Texas, and North Carolina. The initiative aims to safeguard the purchasing power of state-managed assets and pension funds amid economic uncertainties, with options for residents to donate digital assets to the reserve. The bill is currently under review by the Committee on Ways and Means.
SEC Partners with DOGE to Streamline Cryptocurrency Regulations and Enhance Market Stability
On March 28, 2025, the U.S. Securities and Exchange Commission (SEC) began collaborating with the Department of Government Efficiency (DOGE), allowing DOGE officials equal access to SEC networks and data. This strategic integration aims to enhance efficiency in cryptocurrency regulation and signals a potential shift towards a more supportive regulatory environment. Market implications may lead to increased stability in cryptocurrency valuations, with industry experts anticipating a collaborative regulatory framework that could bolster the legitimacy of the market. Dogecoin (DOGE) is currently priced at $0.18, with a market cap of approximately $26.87 billion. Over the past day, DOGE saw a 4.42% decline, while its weekly performance recorded a 7.61% gain. Elon Musk, co-leader of DOGE, emphasized the team's focus on fostering a favorable regulatory environment for crypto innovation. Responses from the community highlight optimism from figures like Coinbase CEO Brian Armstrong regarding economic freedom.
SEC to Host Four Crypto Roundtables on Trading, Custody, Tokenization, and DeFi From April to June 2025
The U.S. Securities and Exchange Commission (SEC) plans to conduct four additional crypto roundtables from April to June 2025, focusing on topics such as trading, custody, tokenization, and decentralized finance (DeFi). These discussions are organized by the SEC’s Crypto Task Force, initiated on January 21, to establish a regulatory framework for crypto. The first roundtable will cover crypto trading on April 11, followed by custody on April 25, tokenization on May 12, and DeFi on June 6. These events, open for public viewing, aim to facilitate expert discussions about regulatory challenges and solutions. SEC Commissioner Hester Peirce emphasized the importance of these roundtables. The SEC has been softening its previous strict approach to crypto under the leadership of acting SEC Chair Mark Uyeda, reversing enforcement actions and proposed rules associated with prior administrations. A separate roundtable on AI in finance is scheduled for March 27.
This article has been refined and enhanced by ChatGPT.
