An end to the government shutdown is in sight.
The Senate approved shutdown, ending legislation, sending the bill to the House for a vote.
Now that means the crypto legislation has a chance to get back on track.
And while regulatory progress has stalled out over the six weeks, the DA industry can complain about the year that it's had so far.
Now key changes over the past year include the replacement of Gary Gensler at the SEC.
Passage of the Genius Act and the announcement of US strategic crypto reserves.
Joining me this morning to weigh in is Kristen Smith, president of the Solano Policy Institute.
Well, Kristen, good morning and welcome back.
So 2025 has been a key year for regulatory change, and even if the only crypto bill passed this year is the Genius Act.
So what is your take on this and what do you expect before year end?
Well, good morning, Remy.
First of all, and hello from the Cantor Crypto conference down in Miami.
I would say the sentiment here this morning is certainly one of awe.
I think for a lot of us who were here at the conference last year, it was just after the election when President Trump was elected, and since that time we really have seen an unprecedented turnaround.
In our federal crypto policy with many, many good changes happening, including the passage of the Genius Act.
Obviously crypto is a very complex industry and the regulation is really important to get right.
And so I think as the government opens, uh, reopens, the SCC can get back to work on its project crypto and write those rules that make sense, uh, within the jurisdiction.
They have and of course Congress is continuing to work on its market structure legislation.
There was a new draft that was released yesterday.
Uh, this is actually a partial draft.
There were a lot of brackets there for some of the key issues that they're continuing to work on, but nevertheless, it is, uh, you know, progress towards getting legislative text together that hopefully can ultimately be voted on.
Yeah, and Kristen, you're down in Florida at the Cantor gathering.
I'm sure the temperature is quite different this year compared to last, but the US Treasury and IRS have cleared crypto ETPs to stake as well as share rewards.
So tell us about how clear tax treatment could transform digital asset adoption.
Yeah, well, there was some big news yesterday, you know, we now have two Solana ETPs live and many in other assets as well, and there was one issue.
It was a very technical tax issue that related to staking in ETPs, and yesterday the IRS released guidance on grantor trusts and how they can interact with staking rewards, but I do think we need to Look at tax policy for all users and investors and individuals of crypto assets and that's something that both the IRS is looking at independently um and there have been hearings in Congress and so I do think this is one of those issues that's actually a lot more straightforward than market structure legislation and its potentially something that we could be solved in the near term, which is incredibly exciting.
Yeah, and Kristen, with the government shutdown potentially and hopefully ending sometime soon, there may be a path forward for market structure legislation.
And with the Senate Committee releasing a draft discussion last night, what will this bill need to fully tell us about this bill and what's needed to fully support this industry.
Yeah, well, I think that it's important to have clarity and it's important to have rules that make it incentivize operators of blockchains to be working here in the United States, and I think that the rules of the road are important for that.
I think what we saw with the draft yesterday is that there were some key sections missing around DFI and illicit finance in particular.
But I, you know, I attended, as we discussed some meetings last month, uh, with senators in Washington.
Everyone is very committed to getting this done, uh, but I do think it is important that we take our time and get it done right, um, because this is going to be a framework that lasts for decades if not longer, and so we want to make sure that the rules make sense for the nature of the technology and help usher in a new era of financial services.
Yeah, and Kristen, finally, before I let you go, as we look ahead, it's not just 2026, but it's also beyond.
So what are you looking for from the SEC as well as the CFTC?
Yeah, well, I think one thing that's really important with the SEC and the CFTC is that they work together and we have started to see that this year.
I think if you look at the CFTC in particular, they're, they're down to one acting commissioner right now and so we really need Congress to get some new commissioners in there so that there's actually a full body that can make decisions.
But I think if you look at the authority that the SEC has today over Securities and securities exchanges and you look at the authority that CFTC has over futures and derivatives in their exchanges, I think there is a lot of authority there that these agencies can use to explain what is a security, what is not a security, how to custody these assets, and some of the questions that have prevented institutions and traditional finance from integrating.
With crypto in the past and so I think that if we can get the agencies to use the authority they have, unfortunately the leaders have said they are going to do this, then that will solve a lot of the problems that have plagued the crypto industry on the regulatory front over the past several years.
And so even without legislation from Congress, there's a lot that the agencies can do to provide the kind of certainty that we need for the US to be competitive.
OK, Kristen, we will have to leave it there for today, but have a great time at the Canada conference and I look forward to speaking with you shortly.
Thank you.
All right.
Thanks, Remy.
