SEC Mobilizes to Establish U.S. as Global Crypto Hub Through Regulatory Modernization

SEC Chairman Paul Atkins has announced that the agency is mobilizing all departments to position the United States as a global center for cryptocurrency. Speaking on Fox Business, Atkins emphasized that the SEC will not remain passive as innovations in the space develop overseas, stating, “it’s going to happen here” [1]. This initiative, part of the SEC’s ongoing Project Crypto, aligns with the recent President’s Working Group report on digital assets and reflects a broader push to modernize regulations to support the evolving crypto ecosystem [1].

The strategy involves adapting existing regulatory frameworks to account for the unique nature of digital assets. All divisions, including Corporation Finance and Investment Management, are being engaged to ensure clarity for market participants while supporting innovation [1]. Atkins highlighted the importance of a balanced approach, one that addresses compliance costs and market bottlenecks without stifling growth [1]. The recently passed GENIUS Act is seen as a step in the right direction, with further legislative progress anticipated once Congress returns from recess [1].

A central element of the initiative is the modernization of custody rules, which have not been updated in over 90 years. Rules under the Exchange Act, the Advisers Act, and the Investment Company Act must be revised to ensure digital assets are held securely, especially when they are owned by investors [1]. This will impact broker-dealers, asset managers, and investment advisers, with the aim of providing the certainty the crypto market has long lacked [1].

Atkins also pointed to the potential for crypto to benefit from the recent invalidation of the Durbin debit interchange rule, calling it a potential boost for alternative payment systems [1]. He emphasized the value of instant payment networks like FedNow, suggesting that moving toward real-time settlement could bring significant benefits to the financial system [1].

The SEC is also considering how to integrate crypto into private markets, including potential inclusion in 401(k) retirement plans. Atkins stressed the need for caution, warning against a one-size-fits-all approach. He noted that participants must understand the risks, including liquidity issues and fees, before opening the gates fully [1].

In related developments, Atkins expressed support for the Trump administration’s reported plan to monetize the government’s stake in Fannie Mae and Freddie Mac, stating the SEC is prepared to assist with the transaction if the plan moves forward [1].

Collectively, these efforts reflect a strategic shift in the regulatory approach to digital assets, with the SEC aiming to foster innovation while maintaining investor protections. The agency’s commitment to keeping the U.S. at the forefront of the global crypto market signals a broader industry transformation.

Source:

[1] LIVE: SEC’s Paul Atkins discusses Project Crypto, TheStreet, https://www.thestreet.com/crypto/policy/live-secs-paul-atkins-discusses-project-crypto