The U.S. Congress is gearing up for a fresh push on cryptocurrency legislation for the next year, 2025, with the expectation that it will be the most pro-crypto Congress yet. This expectation is high due to Donald Trump’s major victory in the presidential election and his promising support for crypto.
As 2025 begins and a new Congress takes office, the pressure is on to provide much-needed clarity. Key legislative proposals, including those targeting stablecoins and defining regulatory jurisdictions, drawing a proper line between SEC and CFTC, and tax implications for digital asset transactions, potentially shaping the future of the industry.
While it may take lawmakers a few months to settle in, experts believe they will move quickly afterward.
Stablecoin Bill
For the past few years, lawmakers have been attempting to pass a stablecoin bill with House Financial Services Committee Chair Patrick McHenry (R-N.C.) and Rep. Maxine Waters (D-Calif.) working on a regulatory framework since 2022.
Although their bill passed the House Financial Services Committee last year, it stalled due to disagreements. One key issue was a provision allowing state regulators to approve stablecoins without Federal Reserve involvement. Waters called the bill “deeply problematic” at the time.
The bill might be reintroduced in the House in 2025, especially with the Senate focusing on other priorities. Changes could make the bill more “state-friendly” in a Republican-led Congress.
A similar Senate draft was introduced last year by Senator Bill Hagerty. However, DeFi Education Fund CEO Miller Whitehouse-Levine said the chances of the bill passing in 2025 are slim, adding, “Hope springs eternal,” and predicting better odds in 2026.
FIT21
Patrick McHenry also spearheaded efforts to pass FIT21, a bill giving more power to the Commodity Futures Trading Commission (CFTC) to regulate crypto markets, especially Bitcoin. It also outlines the role of the SEC.
Whitehouse-Levine noted that FIT21 aims to define decentralization for disclosure rules, stating, “The dividing line that FIT21 proposes is one around whether the transactions are involving a project or a network that is decentralized or not.” A Senate companion bill is possible, but competing priorities may delay progress.
However, its future remains uncertain as the SEC and CFTC leadership will change next year. Trump has chosen Paul Atkins to lead the SEC, who has displayed a favorable attitude toward cryptocurrency. There may also be an opportunity for some revisions in FIT21 regarding how decentralization is defined.
Tax Super Bowl
Lawmakers are preparing for a major tax debate next year as Trump’s Tax Cuts and Jobs Act (TCJA) is set to expire. Alison Mangiero, from the Proof of Stake Alliance, called it the “Tax Super Bowl.”
A proposed bill by Reps. Wiley Nickel and Drew Ferguson aims to tax staking rewards only when they are sold. Mangiero hopes this idea will be included when renewing the TCJA.
Additional Factors Impacting Crypto Legislation
The Digital Asset Market Infrastructure Bill aims to address custody and integration of digital assets into traditional finance, with possible passage in early 2025.
Lawmakers are pushing for greater regulatory clarity, with Rep. French Hill prioritizing digital asset legislation. Expected bills may tackle taxation, AML/KYC compliance, and other crypto-related regulations.
The concept of a strategic Bitcoin reserve is gaining attention. Trump supports this idea, and Senator Cynthia Lummis has proposed a bill for the U.S. Treasury to purchase one million bitcoins over five years. However, it lacks bipartisan support and Senate backing, with Sen. Warren’s role as the ranking Democrat on the Senate Banking Committee adding complexity.
With other issues like tax reform competing for attention, progress on crypto bills may be slow. In 2025, crypto legislation will depend on negotiations, agency input, and public opinion.
Also Read: A Throwback at the ‘Major’ Events of “Crypto” Space in 2024
