Lawmakers gathered in Washington on April 9 to prioritize changes in outdated securities laws affecting crypto regulation. The Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence hosted its first 2025 hearing, focusing on legal misalignments. They reviewed how current policies may hinder innovation while failing to provide investor protection or market clarity.
Lawmakers Push to Modernize Crypto Regulation
The hearing under Representative Bryan Steil from Wisconsin examined how present securities regulations affect digital market operations. Members of Congress expressed doubts about the current legislative frameworks’ failure to match the functions of digital asset technology and its developmental progression. They insisted crypto regulation requires updated laws to offer predictability for businesses and effectively protect investors.
The subcommittee highlighted that innovators face unclear rules without formal legal structures that may force them to operate outside the U.S. Additionally, testimony from legal professionals emphasized how the SEC’s actions alone are insufficient to handle crypto regulation. The participants unanimously supported congressional leadership because it would both regulate the industry and control excessive authority.
Lawmakers understood that insufficient clarity challenges investment capital creation while increasing business responsibilities and technology development delays. Legal professionals establish that technology must constantly evolve with regulations to support market expansion according to historical trends. Therefore, lawmakers argued that Congress must lead reform to build a modern and practical approach to crypto regulation.
STABLE Act Progress Adds Momentum to Legislative Push
Representative French Hill pointed to recent progress in stablecoin legislation as a positive sign for broader crypto regulation reforms. The STABLE Act progressed through the House Financial Services Committee to establish payment criteria for stablecoins. Lawmakers believe the recent development will create the basis for developing standards to regulate digital assets.
According to Hill and fellow supporters, implementing consistent rules would help innovators and protect crypto and traditional financial systems. The committee believes maintaining domestic development should be the center of policy creation since forced offshore project deployment is not beneficial. Stablecoins constitute an essential component among various aspects that require modern oversight.
To the participants, the focus on enforcement without established rules causes uncertainty and prevents technological progress. Lawmakers wanted to establish specific types of assets except categorizing them all as securities by default. The success of stablecoins through regulatory measures indicates that legislation focused on specific areas brings both new concepts and regulatory clarity.
Industry Voices Call for Clear Congressional Definitions
Rodrigo Seira of Cooley LLP explained that crypto regulation must reflect the industry’s distinct structure and capital flow patterns. According to him, the existing securities laws lack appropriate decentralized finance and blockchain provisions. Industrial representatives want to transition from agency enforcement control to explicit, approved congressional guidelines.
Tiffany J. Smith from WilmerHale maintained that the SEC’s work remains lacking because Congress needs to establish complete national crypto legislation. The testimony demonstrated how haphazard enforcement measures can never become a substitute for authorized legal definitions. Lawmakers agreed that only Congress can resolve the underlying inconsistencies in crypto regulation.
Jake Werrett, the Chief Legal Officer at Polygon, warned about the potential negative effects of driving blockchain technology from the United States. According to his testimony, the sector exceeds its original payments function by supporting digital economic growth. The legislative definition will enable the US to remain a leader in developing digital marketplaces.
FAQs
What was the purpose of the April 9 hearing in Washington?
The hearing aimed to assess how outdated securities laws affect innovation and investor safety in digital asset markets.
Why is crypto regulation a top priority for lawmakers?
Because current laws do not match crypto operations, creating confusion and discouraging innovation inside the U.S.
What was discussed regarding the STABLE Act?
Lawmakers discussed how its recent progress helps push toward a larger, unified crypto regulation framework.
What do legal experts say about the SEC’s actions?
Experts believe SEC enforcement alone cannot deliver the necessary clarity for consistent crypto regulation.
Why is congressional action seen as necessary?
Only Congress can establish permanent, uniform rules that support industry growth and investor protection.
Glossary
Crypto Regulation: The legal framework that governs digital assets like cryptocurrencies and blockchain technologies.
Digital Assets: Financial assets stored on a blockchain, including cryptocurrencies, tokens, and NFTs.
Securities Laws: U.S. laws regulate the issuance and trading of investment instruments like stocks and bonds.
Stablecoin: A cryptocurrency designed to maintain a stable value, usually pegged to a fiat currency.
Blockchain: A decentralized, digital ledger that records transactions across multiple systems securely.
Decentralized Finance (DeFi): Financial systems built on blockchain without traditional intermediaries.
Enforcement Action: Legal action taken by a regulatory agency to ensure compliance with laws or rules.
Congressional Hearing: A formal meeting held by a legislative committee to discuss policy issues or gather expert opinions.
Sources:
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