Regulatory Clarity and Tax Compliance: Unlocking Institutional Opportunities in Blockchain Infrastructure

The 2025 regulatory landscape for digital assets has transformed the institutional investment environment, creating a fertile ground for blockchain infrastructure innovation. The repeal of the SEC’s SAB 121 and the introduction of SAB 122 have removed legal barriers to custody services, enabling banks and institutional investors to hold and trade crypto assets with confidence. This shift has directly contributed to a doubling of institutional Bitcoin holdings and the emergence of $22.5 billion in tokenized real-world assets [3]. Simultaneously, the Trump administration’s pro-crypto policies, including the appointment of SEC Chair Paul Atkins, have fostered a regulatory environment that balances innovation with compliance [3].

A key driver of this transformation is the 60/30/10 risk-rebalance model, where 30% of institutional portfolios are now allocated to crypto assets, prioritizing blockchain infrastructure, stablecoins, and compliant ETFs [3]. This strategy reflects a broader recognition of digital assets as a strategic asset class, supported by legislative clarity such as the GENIUS Act and the CLARITY Act, which established federal frameworks for stablecoins and digital commodity markets [3]. Global regulatory efforts, including the EU’s MiCAR and Japan’s 2026 reforms, have further stabilized the environment, attracting ¥5 trillion in institutional capital [3].

However, regulatory clarity alone is not sufficient to drive adoption. Tax compliance measures, particularly the introduction of Form 1099-DA in 2025, have reshaped institutional strategies. This IRS form requires brokers to report detailed transaction data, including gross proceeds and cost-basis information, aligning digital assets with traditional financial reporting standards [1]. While this increases transparency, it also imposes operational challenges, such as the need for robust compliance systems and wallet-by-wallet cost-basis tracking [5]. Institutions are adapting by leveraging tax-loss harvesting techniques and enhancing cybersecurity to meet these requirements [2].

The impact of these changes is evident in the rise of blockchain infrastructure projects. Companies like RIOT Platforms and HIVE Digital Technologies are expanding their roles in custody services and tokenization, while platforms like Coinbase and BlackRock are pioneering compliant ETFs and tokenized gold trading [3]. Modular blockchains (e.g., Celestia, Polygon 2.0) and zero-knowledge proof (ZKP) solutions (e.g., zkSync Era, Starknet) are also gaining traction, addressing scalability and privacy needs [1]. Meanwhile, the tokenization of real-world assets (RWAs) is bridging traditional finance and blockchain, offering liquidity and fractional ownership opportunities [1].

Case studies highlight the tangible effects of these developments. For instance, the U.S. SEC’s Project Crypto initiative has modernized securities laws, enabling institutions to allocate capital with greater confidence [1]. Similarly, the EU’s MiCAR framework has created a centralized register for crypto-asset service providers, reducing uncertainty for cross-border investments [3]. These regulatory advancements, combined with tax compliance tools, are positioning blockchain infrastructure as a core component of institutional portfolios.

Challenges remain, including compliance with ERISA retirement account regulations and short-term volatility from regulatory refinements [3]. Yet, the 2025 landscape demonstrates that regulatory clarity and tax compliance are not barriers but catalysts for innovation. As institutions navigate these changes, blockchain infrastructure is emerging as a cornerstone of the digital economy, offering both risk mitigation and growth opportunities.

Source:
[1] Blockchain and Digital Assets Outlook 2025 [https://www.bpm.com/insights/blockchain-and-digital-assets-outlook-2025/]
[2] The Rise of Cryptocurrency: Tax Implications and Compliance [https://fhassoc.com/the-rise-of-cryptocurrency-tax-implications-and-compliance/]
[3] How 2025–2026 Crypto Policy Shifts Reshape Digital Asset Markets [https://www.ainvest.com/news/regulatory-clarity-institutional-rebalancing-2025-2026-crypto-policy-shifts-reshape-digital-asset-markets-2508/]
[4] Final regulations and related IRS guidance for reporting by brokers on sales and exchanges of digital assets [https://www.irs.gov/newsroom/final-regulations-and-related-irs-guidance-for-reporting-by-brokers-on-sales-and-exchanges-of-digital-assets]
[5] Increased IRS Tracking of Cryptocurrency: Form 1099-DA [https://jolt.richmond.edu/2025/06/29/increased-irs-tracking-of-cryptocurrency-form-1099-da/]