The New US Crypto Policy: From Hostility to Embrace

A New Chapter for Crypto in America

After years of regulatory war under the Gensler SEC, the new US administration that took office in January 2025 has taken a dramatically different approach. The shift has been so stark that some in the industry are calling it the most significant policy pivot in modern financial regulation.

As someone watching from Sri Lanka, I find this fascinating — and instructive. Let me break down what's happened and why it matters globally.

The Strategic Bitcoin Reserve

Perhaps the most headline-grabbing move was the executive order establishing a US Strategic Bitcoin Reserve. The concept is similar to the Strategic Petroleum Reserve — a government stockpile of a strategically important asset. The initial reserve was seeded with Bitcoin already held by the US government from various seizures (approximately 200,000 BTC from Silk Road and other cases).

The executive order directed agencies to not sell seized Bitcoin and explore methods for acquiring additional reserves. While the details are still evolving, the symbolic importance cannot be overstated: the United States government is officially treating Bitcoin as a strategic national asset.

New SEC Leadership

The appointment of crypto-friendly SEC leadership changed the regulatory tone immediately. Key shifts include:

• Dropping enforcement actions: Several ongoing SEC cases against crypto companies were paused or dropped entirely.
• Clear token classification: Work began on establishing clear guidelines for when a digital asset is a security vs. a commodity.
• Registration pathways: The SEC began creating actual registration frameworks for crypto exchanges and token issuers.
• Staff Accounting Bulletin changes: SAB 121, which forced banks to treat crypto custody as a liability, was repealed — opening the door for banks to custody Bitcoin.

The Stablecoin Bill

Congress made meaningful progress on stablecoin legislation, creating a regulatory framework for US dollar-denominated stablecoins. The key provisions include:

Provision	Description
Reserve Requirements	1:1 backing with US Treasuries or cash
Issuer Licensing	Federal and state licensing pathways
Audit Requirements	Monthly reserve attestations
Consumer Protection	FDIC-like protection framework
Algorithmic Ban	Prohibits unbacked algorithmic stablecoins

This is significant because stablecoins — particularly USDT and USDC — are the primary on-ramp for crypto users worldwide, including in Sri Lanka. A clear US regulatory framework for stablecoins strengthens the entire ecosystem.

CFTC Takes the Lead

One of the most important structural changes is the jurisdictional clarification between the SEC and CFTC. Bitcoin has long been classified as a commodity under CFTC jurisdiction, but the lines were blurry for other digital assets. The new approach generally gives:

• CFTC: Primary authority over Bitcoin, other digital commodities, and spot markets
• SEC: Authority over tokens that meet the Howey test definition of securities

This is the clarity the industry has begged for since 2017.

Banking Access Opens Up

With SAB 121 repealed and clear regulatory guidance in place, major US banks are finally entering the crypto space:

• JPMorgan expanded its blockchain division and began offering Bitcoin custody
• Bank of America launched crypto trading for wealth management clients
• Goldman Sachs expanded its digital assets desk significantly
• Morgan Stanley went beyond ETF access to offer direct Bitcoin exposure

Global Implications

When the world's largest economy embraces crypto, everyone else takes notice. The US policy shift is creating a competitive dynamic where countries feel pressure to develop their own frameworks or risk losing talent, capital, and innovation.

For Sri Lanka, this is both an opportunity and a warning. An opportunity because the global legitimization of Bitcoin creates a rising tide that lifts all boats. A warning because countries that remain on the sidelines will be left behind as the financial system evolves.

I believe Sri Lanka should study these frameworks carefully and develop its own pragmatic approach. In the meantime, stay informed through our latest updates and build your knowledge at our learning center.