Regulators Race Against Clock to Keep U.S. Afloat in Global Crypto Battle

Panelists at the Wyoming Blockchain Symposium emphasized the urgent need for the United States to act swiftly in shaping a coherent crypto regulatory framework, warning that inaction could see the country fall behind international competitors. Sylvia Favretto, general counsel at Mysten Labs, acknowledged the opportunity still exists despite the European Union’s progress with its Markets in Crypto-Assets (MiCA) legislation but stressed the narrow window for action. Stuart Alderoty, Ripple’s chief legal officer, added that a misstep in crafting the regulatory structure could result in the U.S. losing its competitive edge to the EU, Asia-Pacific, or even the Middle East.

The Blockchain Association’s Summer Mersinger noted that achieving regulatory clarity in the U.S. is a complex process, particularly with the 2026 midterm elections approaching. The Trump administration has a tight timeline—two years—to establish meaningful crypto regulations before the political balance potentially shifts again, according to Joe Doll, general counsel at Magic Eden. Marta Belcher of the Blockchain Association echoed these concerns, highlighting the difficulty of passing significant legislation in the lead-up to the 2026 elections, as lawmakers prioritize re-election campaigns over regulatory progress.

The recent Republican majority in the House and Senate, while slim, provides an opportunity for pro-crypto policies. However, the party’s narrow margins mean any further gains or losses in the 2026 elections could dramatically alter the political landscape for crypto regulation. With the window of opportunity closing, industry advocates are urging lawmakers to act decisively before the next round of elections, which could bring a different party into power and halt or reverse progress.

In parallel, the U.S. financial sector is also engaging in a debate over the regulatory implications of new Basel Committee standards for crypto assets. A coalition of finance industry bodies, including the Global Financial Markets Association and the Institute of International Finance, has called for a pause in the implementation of these standards. The proposed rules are seen as overly restrictive and costly, potentially deterring banks from participating in crypto markets. The letter argues that the rules could make it uneconomical for banks to engage in crypto activities, thus stifling the growth of the sector in the U.S.

As the U.S. moves forward, it faces a critical juncture in defining its stance on digital assets. With the Trump administration pushing for broader access to crypto through 401(k) plans and a federal market structure, the regulatory environment is evolving rapidly. However, these efforts must be weighed against the risks of over-regulation, which could dampen innovation and drive activity offshore. The upcoming CLARITY Act and Responsible Financial Innovation Act (RFIA) represent the first major legislative attempts to structure the U.S. crypto market. While the bills are expected to bring clarity, they also raise complex jurisdictional issues between the SEC and CFTC. If passed, they will likely serve as the foundation for a more enduring regulatory framework.

The broader international context further underscores the stakes for U.S. crypto regulation. The EU’s MiCA framework, which took effect in 2024, provides a comprehensive regulatory model for crypto assets and service providers, offering a passporting mechanism that allows compliance in one member state to apply across the EU. In contrast, the U.S. GENIUS Act, while narrower in scope, introduces a federal framework for stablecoins, emphasizing transparency and financial stability. These differing regulatory approaches highlight the need for the U.S. to maintain a balanced and innovation-friendly environment to remain competitive on the global stage.

Source: [1] US must pass regulations or risk losing crypto race (https://cointelegraph.com/news/us-pass-regulations-risk-losing-crypto-race) [2] Finance industry bodies call for changes to crypto rules (https://www.reuters.com/legal/government/finance-industry-bodies-call-changes-crypto-rules-banks-2025-08-19/) [3] Crypto regulatory affairs: Private sector in US and Hong Kong push for changes in new stablecoin rules (https://www.elliptic.co/blog/crypto-regulatory-affairs-private-sector-in-us-and-hong-kong-push-for-changes-in-new-stablecoin-rules) [4] Crypto’s integration into the traditional financial system is underway (https://www.davispolk.com/insights/client-update/cryptos-integration-traditional-financial-system-underway) [5] Sen. Tim Scott Sees Democrats Crossing Aisle on Crypto Market Structure (https://cointelegraph.com/news/senate-banking-committee-chair-support-crypto-market-structure) [6] MiCA vs. GENIUS Act: How Crypto Laws Differ in Europe and the US (https://www.ccn.com/education/crypto/mica-vs-genius-act-how-crypto-laws-differ-in-europe-and-the-us/) [7] Cryptocurrency Regulation: A Guide to U.S. & Global Policies (https://www.britannica.com/money/cryptocurrency-regulation) [8] Global Trade Associations Call for Revisions to EU Cryptoasset Standard (https://www.bankingexchange.com/news-feed/item/10393-global-trade-associations-call-for-revisions-to-eu-cryptoasset-standard)