How Cryptocurrency Regulation Is Evolving
Cryptocurrency regulation is an evolving framework that seeks to balance innovation with investor protection, financial transparency, and systemic stability. While the details vary by country, most regulatory efforts are taking place in response to a growing recognition that digital assets and their underlying blockchain technologies are transforming global economic systems.
Many state governments have attempted to promote the technology by passing laws exempting cryptocurrencies from securities and money transmission regulations. Others, including the state of Wyoming, have passed more restrictive laws that require licensing for a broader range of activities. State regulators have also issued no-action letters that have allowed some exchanges to operate without a license.
The federal government has taken a different approach. In 2025, Congress passed landmark legislation that began to clarify the roles of agencies in regulating stablecoins and digital assets. This legislation, known as the GENIUS Act, includes provisions requiring full reserve backing, monthly audits, and anti-money laundering compliance, among other requirements.
The administration has also sought to clarify the definition of “money transmission.” A broader interpretation would require all cryptocurrency transactions to be licensed, with the Department of Banking and Finance imposing regulations on businesses that provide services such as currency exchanges, peer-to-peer transfers, and other financial services. The administration has also promoted the development of a central bank digital currency, or CBDC. This could be a game-changer for the industry, but it will require collaboration across federal and state departments to ensure that a national policy on CBDCs is developed that combines consumer protection and financial stability objectives.
