SEC Shifts Crypto Oversight to Innovation-Driven Framework with GENIUS Act

The U.S. Securities and Exchange Commission (SEC) is transitioning its strategy from enforcement-driven oversight to a model that supports innovation while ensuring long-term stability in the cryptocurrency sector. Central to this shift is the GENIUS Act, which provides regulatory clarity, particularly for stablecoins, and aims to reduce uncertainty in the digital asset market [1]. SEC Chair Paul Atkins has emphasized that the Act is a foundation for future-proof regulation, allowing the agency to adapt to evolving technologies while maintaining investor protection [2].

The GENIUS Act, enacted in July 2025, introduces a framework for stablecoins that are pegged to the U.S. dollar. It establishes clear definitions and compliance requirements, positioning stablecoins as a reliable component of the digital economy. By offering a legal foundation, the Act encourages broader adoption and supports the growth of the crypto market. The SEC is incorporating the law into its policies, using it as a guidepost for shaping future regulations [3].

A key element of this regulatory shift is the SEC’s renewed focus on collaboration with Congress and the federal administration. This marks a departure from the enforcement-heavy approach under former SEC Chair Gary Gensler. The agency is now prioritizing a flexible and adaptive regulatory structure that can endure for decades. This strategy is intended to prepare markets for future technological advancements and ensure that regulation keeps pace with innovation [4].

The move also reflects a broader transformation in the regulatory environment. Law enforcement tactics and adversarial stances are being replaced with open dialogue and cooperation. This change, according to SEC leadership, is necessary to foster long-term stability and maintain the United States’ competitive edge in the global digital asset landscape [5]. The emphasis on adaptability is seen as essential in balancing control with creativity.

The GENIUS Act has also influenced institutional strategies. For example, Tether appointed Bo Hines, a former Trump administration official and key architect of the Act, to lead its U.S. strategy and expansion. His role underscores the strategic significance of the Act in legitimizing stablecoins and integrating them into the broader financial system [6]. Tether’s decision reflects a growing trend of institutional players aligning with U.S. regulatory developments to strengthen their market positions.

Meanwhile, the Federal Reserve has signaled a shift in its own approach to digital assets. It has ended a specialized oversight program for crypto and fintech activities, indicating confidence in the maturing crypto ecosystem. This change is expected to streamline compliance for banks issuing stablecoins and offering crypto services, reinforcing the GENIUS Act’s role in promoting stability [7].

The Act has also spurred innovation in related sectors. For instance, blockchain infrastructure providers are developing AI-powered and cloud-based systems that align with the regulatory requirements set by the new law. These developments reflect the industry’s response to a more structured environment, where sustainability and transparency are increasingly important [8].

However, critics have raised concerns about the absence of explicit safeguards in related legislation, such as the CLARITY Act. Without such protections, they argue, the risk of misuse or instability could increase, potentially undermining the long-term goals of the GENIUS Act [9]. Despite these concerns, the Act represents a significant step in integrating crypto assets with traditional financial systems and may influence global regulatory approaches.

As the U.S. regulatory framework for crypto continues to evolve, the collaboration between the SEC, industry leaders, and financial institutions is expected to shape the next phase of the market’s development. The focus on stability, innovation, and adaptability could position the United States as a global leader in the digital asset economy, provided that regulatory efforts continue to balance oversight with market growth.

Source:

[1] https://coinmarketcap.com/community/articles/68a5807b00db01532553fc92/

[6] https://www.facebook.com/photo.php?fbid=749822254597652&set=a.130****63246274&type=3

[7] https://www.cointelegraph.com/news/fed-ends-crypto-focused-supervision

[8] https://blockster.com/member/lidia-yadlos

[9] https://cryptodnes.bg/en/tag/snorter-bot/