Latest Executive and Legislative Actions Continue Crypto-Friendly Movement

The past two weeks have been a whirlwind of activity for the financial and crypto sectors, with developments on Capitol Hill and from key regulatory agencies. President Donald Trump’s nomination of Michelle Bowman as the Federal Reserve’s top bank regulator signals a shift toward a lighter and more tailored approach to regulation of financial institutions. At the same time, the Senate Banking Committee’s bipartisan approval of the GENIUS Act marks a significant step toward establishing a federal framework for stablecoins.

Meanwhile, the introduction of the BITCOIN Act and FIRM Act reflects growing congressional interest in shaping the future of digital assets and financial regulation. Against this backdrop, the OCC published Interpretive Letter 1183, regarding its position on national banks conducting select cryptocurrency activities, and the SEC is poised to roll back certain prior rules. These moves collectively point toward a more structured and potentially more crypto-friendly regulatory environment.

First-Ever White House Crypto Summit

• On March 7, President Trump hosted the first White House Crypto Summit, signaling a shift toward a more crypto-friendly regulatory approach throughout the administration. The summit brought together top officials, lawmakers and industry leaders to discuss the administration’s strategic vision for digital assets.
  • Strategic Bitcoin Reserve. President Trump highlighted his executive order creating a Strategic Bitcoin Reserve, describing it as a “virtual Fort Knox for digital gold.” The U.S. Treasury will house up to 200,000 BTC already acquired through civil law and enforcement actions, making the U.S. one of the largest Bitcoin holders globally.
  • “Never Sell Your Bitcoin” Policy. President Trump declared that the U.S. will no longer sell Bitcoin holdings, commenting that past administrations liquidated seized Bitcoin, which would now be valued at billions of dollars.
  • Ending “Operation Choke Point 2.0.” The president announced the end of “Operation Choke Point 2.0,” described as the pressure on banks to cut off services to crypto businesses.
  • Support for Stablecoin Legislation. The president voiced strong support for lawmakers’ efforts in Congress as they work on bills to provide regulatory certainty for dollar-backed stablecoins, encouraging lawmakers to deliver a comprehensive stablecoin regulatory framework to his desk before the August recess. The administration emphasized that stablecoins could reinforce the U.S. dollar’s dominance in global finance.
  • Attendees. The summit featured remarks from David Sacks, White House AI and crypto czar; Scott Bessent, treasury secretary; Howard Lutnick, commerce secretary; Kelly Loeffler, SBA administrator; and House Majority Whip Tom Emmer (R-MN).

Michelle Bowman Appointed as Fed’s Top Bank Regulator

• President Trump nominated Federal Reserve Governor Michelle Bowman as the Fed’s vice chair for supervision. Bowman served on the Federal Reserve Board of Governors since 2018 and was previously the Kansas state banking commissioner. If confirmed, Bowman will succeed Michael Barr, who resigned from the post last month.
• Bowman is known for her opposition to overregulation, particularly regarding community and regional banks.
• Bowman stated that, if confirmed, she would promote a “pragmatic approach” to bank supervision and regulation, focusing on transparency and encouraging innovation.

Senate Banking GENIUS Act Moves Forward

• On March 13, the Senate Banking Committee voted 18-6 to approve a revised Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. If passed into law, the legislation would establish a comprehensive regulatory framework for issuing and regulating payment stablecoins in the U.S.
  • Payment stablecoin issuers would be required to maintain reserves backing their payment stablecoins on at least a 1:1 basis, provide monthly disclosures of the composition of reserves and establish procedures for timely redemption.
  • Additional details on the GENIUS Act are here.
  • The vote in the Senate Banking Committee was supported by the Republicans unanimously and by five Democratic senators, including Mark Warner (D-VA), Andy Kim (D-NJ), Ruben Gallego (D-AZ), Angela Alsobrooks (D-MD) and Lisa Blunt Rochester (D-DE).
  • The bill has not been scheduled for a vote on the Senate floor.
• The revised text includes the following:
  • AML. Strengthens anti-money laundering requirements for stablecoin issuers, including enhanced due diligence and reporting requirements. A permitted stablecoin issuer will be treated as a financial institution for purposes of the Bank Secrecy Act and be subject to all federal laws applicable to a financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification and due diligence.
  • Tokenized Instruments in Approved Reserves. This amendment expands the list of approved reserves to include the “tokenized form” of Treasury securities and other government-backed instruments.
  • Waiver Criteria Expansion. Broadens the authority of the primary federal payment stablecoin regulator to grant waivers for specific reserve requirements and licensing criteria. A federal regulator may allow an issuer with a consolidated total outstanding issuance of more than $10 billion to remain solely supervised by a state payment stablecoin regulator and would consider the following factors: capital maintained by the issuer, the issuer’s history and the experience of the state regulator in supervising stablecoins.

House Passes Bill to Repeal IRS DeFi Broker Rule

• House Passes H.J. Res. 25 with Strong Bipartisan Support. On March 11, the House of Representatives passed H.J. Res. 25 by a vote of 292-132 to repeal the IRS rule applying broker tax reporting requirements to certain decentralized finance (DeFi) front-end service providers. The resolution passed with support from 216 Republicans and 76 Democrats, signaling bipartisan support on another crypto-related issue.
• Background on the IRS Rule. The IRS’s final rule, issued in December 2024, required DeFi platforms and software developers to report user transaction data on Form 1099-DA (Digital Asset Proceeds from Broker Transactions).
• Legislative Process and Constitutional Issues. While the Senate had already passed an identical resolution (S.J. Res. 3) on March 6 with a decisive bipartisan vote, the House determined that the repeal needed to originate in the House because it involved tax-related matters under the Origination Clause of the Constitution. The House returned S.J. Res. 3 to the Senate. Instead, it passed H.J. Res. 25. The Senate must now vote on the House-originated resolution before proceeding to President Trump’s desk for signature.
• Next Steps. The Senate is expected to vote on H.J. Res. 25 in the coming weeks. If the Senate approves the resolution, it will proceed to President Trump’s desk for signature.

FIRM Act Passes Out of Senate Banking Committee

• On March 13, the Senate Banking Committee voted 13-11 to advance the Financial Integrity and Regulation Management (FIRM) Act, which would remove “reputational risk” as a measure to determine the safety and soundness of regulated financial institutions, a key step toward ending the controversial practice of “debanking.”
• If enacted, the FIRM Act would restrict regulators’ ability to pressure banks to deny services to certain industries, including crypto firms, based on “reputational risk” rather than safety and soundness.

BITCOIN Act Introduced

• On March 11, senators Cynthia Lummis (R-WY), Jim Justice (R-WV), Tommy Tuberville (R-AL), Roger Marshall (R-KS), Marsha Blackburn (R-TN) and Bernie Moreno (R-OH) introduced the Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act. Companion legislation was introduced in the House by Representative Nick Begich (R-AK).
• The BITCOIN Act would codify President Trump’s executive order, establishing a Strategic Bitcoin Reserve and a broader United States Digital Asset Stockpile.
  • Bitcoin Reserve: The U.S. Department of Treasury would create a decentralized network of secure Bitcoin storage facilities.
  • Purchase Program: Treasury would acquire 1 million BTC (approximately 5% of the total Bitcoin supply), making the U.S. government one of the largest holders of Bitcoin globally.

House Financial Services Committee Hearing on Stablecoins and CBDCs

• On March 11, the House Financial Services Committee held a hearing titled “Navigating the Digital Payments Ecosystem: Examining a Federal Framework for Payment Stablecoins and Consequences of a U.S. Central Bank Digital Currency.”
  • The hearing examined the potential of payment stablecoins to modernize our payments systems. The hearing also focused on the current use cases for stablecoins, including remittances, cross-border payments, trade settlement settlements and business-to-business transfers.
  • The hearing also examined the legislative framework for payment stablecoin issuance proposed by the Stablecoin Transparency and Accountability for a Better Ledger Economy Act (STABLE) Act of 2025, analyzing how the STABLE Act would impact payment stablecoin issuers, protect consumers and promote competition.
  • The hearing also highlighted the difference between payment stablecoins and a U.S. Central Bank Digital Currency (CBDC).

Acting SEC Chair Mark Uyeda’s Remarks to the Investment Company Institute

• On March 17, Acting SEC Chair Mark Uyeda made remarks at an industry conference signaling a more flexible approach to crypto and ETF regulation.
• Rulemaking and Regulatory Processes. Uyeda commented on restoring the SEC’s rulemaking process by ensuring at least 60-day comment periods for significant rule proposals, encouraging the use of re-proposals when rules require substantial changes based on market feedback and promoting more effective stakeholder engagement through roundtables, requests for information and investor testing.
• Focus on Capital Formation and Regulatory Flexibility. Uyeda emphasized that capital formation and investor protection are “two sides of the same coin” because investors who believe that our markets are rife with fraud will not invest. He stressed that the SEC must promote market innovation and growth while maintaining investor protections. The SEC will focus on revisiting rules that impact capital formation, particularly those affecting emerging markets and financial products like ETFs and crypto.
• Crypto and Digital Assets Regulation. Uyeda confirmed that the SEC is reevaluating the proposed custody rule for investment advisers, which would have extended custodial requirements to virtually all assets, including crypto. He suggested that the rule may need to be withdrawn or significantly revised following industry feedback. Uyeda instructed the SEC’s new Crypto Task Force to work with staff to develop regulatory alternatives for the custody of digital assets. Uyeda confirmed that the SEC is reviewing several rules for potential withdrawal or revision, including the custody rule for investment advisers (impacting crypto).
• ETF and Mutual Fund Innovation. Uyeda noted that the SEC is not a merit regulator. Not all products will succeed, but that does not make them inappropriate. Uyeda highlighted the success of ETFs and their growth to 30% of total net assets under management by investment companies. He directed staff to prioritize reviewing pending applications for ETF share class relief, which would allow funds to offer both mutual fund and ETF share classes under the same structure.
• SEC’s Enforcement Focus. Uyeda stated that the SEC will continue to prioritize enforcement against fraud and misconduct and focus on providing guidance and education to market participants.

OCC Publishes New Interpretive Letter on Crypto Policy; Reverts to Prior Positions

• On March 7, the Office of the Comptroller of the Currency (OCC) published Interpretive Letter (IL) 1183, which: (1) reaffirms the OCC’s position on national banks conducting select cryptocurrency activities as described in IL 1170, IL 1172 and IL 1174; and (2) rescinds IL 1179.
• Between mid-2020 and early 2021, the OCC published three ILs regarding cryptocurrency activities of national banks. The first (IL 1170) authorizes national banks to hold cryptocurrency in a custodial capacity on behalf of customers. The second (IL 1172) authorizes national banks to hold deposits that serve as stablecoin reserves. The third (IL 1174) authorizes banks to operate independent node validators as well as use these nodes and stablecoins to facilitate payments. On November 18, 2021, the OCC issued IL 1179, which stated that the three prior ILs on cryptocurrency activity remained effective, but national banks need the written supervisory nonobjection of the OCC before engaging in any of the described activities.
• The recent publication of IL 1183 is the first sign of the OCC reverting to its prior positions related to cryptocurrency activities by banks. By reaffirming ILs 1170, 1172 and 1174, and repudiating IL 1179, IL 1183 permits national banks to engage in the cryptocurrency activities outlined in each without having to seek supervisory nonobjection. However, the OCC still expects banks to engage in any cryptocurrency activity “in a safe, sound, and fair manner and in compliance with applicable law.”
• At the same time, the OCC also withdrew from two interagency statements related to cryptocurrency activities: the “Joint Statement on Crypto-Asset Risks to Banking Organizations” (Joint Crypto-Asset Statement), dated January 3, 2023, and the “Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities”), dated February 23, 2023. These statements largely addressed perceived risks presented to banking organizations as a result of cryptocurrency activities, but expressly did not prohibit banking organizations from engaging in such activities nor discourage banking organization from providing banking services to customers of any specific class or type. However, the Joint Crypto-Asset Statement provides: “Based on the agencies’ current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices.” As of the issuance of this client alert, the Board of Governors of the Federal Reserve System (Board) and the Federal Deposit Insurance Corporation (FDIC) have not withdrawn from or rescinded the joint statements. Moreover, both the Board and FDIC have outstanding guidance that requires their supervised banking organizations to seek supervisory nonobjection prior to engaging in cryptocurrency activities. These issuances have not been withdrawn or modified; the potential inconsistent process under federal law for a national bank to engage in certain cryptocurrency activities vis-à-vis state banks raises competitive questions.
• The revised policy of the OCC is one of many actions taken since the second Trump administration took office on January 20, 2025, related to digital assets, including cryptocurrencies assets. Among these actions include an executive order to form a working group on cryptocurrency (“Strengthening American Leadership in Digital Financial Technology,” January 23, 2025); an executive order to establish a reserve of Bitcoin and other select cryptocurrencies (“Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile,” March 6, 2025); and a statement by the staff of the U.S. Securities and Exchange Commission on memecoins (“Staff Statement on Meme Coins,” February 27, 2025).