United States’ Crypto Vision
The Trump administration’s approach to cryptocurrency has evolved significantly, positioning digital assets not just as financial innovations but as potential instruments for reinforcing the global role of the US dollar. This shift suggests a growing intertwining of crypto policy with broader macroeconomic objectives. While some regulatory and institutional measures are in place, critical questions remain, and US crypto policy must be understood within the context of the administration's economic priorities and its vision for restoring American financial leadership in a changing global order.
Among the most notable legislative efforts under the Trump administration’s renewed crypto agenda is the introduction of the Financial Innovation and Technology for the 21st Century Act (
FIT21). This bill aims to establish a comprehensive regulatory framework for digital assets in the United States, delineating the roles of federal regulatory bodies like the CFTC and SEC. FIT21 is poised to become the foundational framework for US digital asset regulation, signaling a shift from skepticism to structured engagement by emphasizing regulatory clarity, market integrity, and innovation.
The relationship between traditional banking and the cryptocurrency sector has also seen a significant shift, notably with the repeal of Staff Accounting Bulletin (SAB) 121 in January 2025. This SEC rule previously discouraged banks from offering crypto custodial services by requiring them to treat customer-held crypto assets as liabilities. Its repeal provides a clearer pathway for banks to enter the crypto custody space without adverse financial reporting impacts. This regulatory change, coupled with a leadership transition at the SEC to Paul S. Atkins, a proponent of more permissive regulatory approaches, is expected to lead to a re-evaluation of the Howey Test. A potential narrowing of the security definition could reduce the number of crypto assets under SEC purview, facilitating greater innovation in cryptocurrency-related products and services from financial institutions. Major players like Citigroup are considering issuing stablecoins, and JPMorgan has permitted cryptocurrency purchases, signaling increasing institutional confidence and the progressive reshaping of core banking functions by digital assets.
The United States has emerged as the most prominent sovereign holder of Bitcoin, accumulating approximately 200,000 BTC by early 2025, primarily through seized assets from criminal investigations. A significant policy development is the establishment of a Strategic Bitcoin Reserve through an executive order in March 2025. This move centralizes confiscated Bitcoin holdings under a unified federal framework, diverging from past practices of liquidating seized assets. Bitcoin is now framed as a strategic digital asset with implications for monetary sovereignty, economic security, and foreign policy, suggesting its incorporation into broader macroeconomic and geopolitical strategies as a non-traditional reserve asset.
As the United States integrates crypto more deliberately into its economic architecture, other nations are actively defining their own strategic postures. Countries like El Salvador and the Central African Republic have adopted Bitcoin as legal tender, while China advances its digital yuan (e-CNY) for cross-border transactions. Russia and Iran are leveraging crypto to bypass sanctions, and the EU is progressing with a Digital Euro. The UAE is positioning itself as a crypto-friendly hub. The emergence of digital assets as instruments of state strategy is reshaping the global financial architecture, with nations viewing crypto as a pillar of future economic influence. The US faces the challenge of leading in innovation while safeguarding systemic stability, with its evolving crypto vision offering one potential blueprint in the ongoing global crypto race.
Sauradeep Bag is an Associate Fellow at the Observer Research Foundation.
Source: Originally published at Observer Research Foundation on August 7, 2025.
Frequently Asked Questions (FAQ)
US Crypto Policy & Regulation
Q: What is the significance of the FIT21 Act in the US crypto landscape?
A: The FIT21 Act is a landmark legislative initiative designed to establish a comprehensive regulatory framework for digital assets in the United States. It aims to clarify the roles and responsibilities of federal regulatory bodies, primarily the CFTC and SEC, in overseeing the cryptocurrency sector, marking a shift towards structured engagement with digital assets.
Q: How has the repeal of SAB 121 impacted the banking sector's involvement with crypto?
A: The repeal of SAB 121, which previously treated customer-held crypto assets as liabilities on bank balance sheets, has removed significant regulatory and capital burdens. This allows banks a clearer pathway to offer crypto custody services, fostering greater institutional participation in the digital asset space.
Q: What is the US government's current approach to seized Bitcoin holdings?
A: The US government now centralizes confiscated Bitcoin holdings under a unified federal framework through the establishment of a Strategic Bitcoin Reserve. This policy shift from passive custodianship to strategic asset management frames Bitcoin as a strategic digital asset with implications for economic security and monetary sovereignty, rather than simply a forfeited financial instrument.
Q: How is the US crypto vision influencing global crypto adoption?
A: As the US moves to integrate crypto more deliberately, it spurs other countries to define their own strategic postures. The US's evolving vision from deregulation to reserve strategy is influencing global discussions and adoption patterns, though other nations are also pursuing their own unique paths in the global crypto race.
Q: What role does the Howey Test play in the evolving US crypto regulatory environment?
A: Under new SEC leadership, there's anticipation that the applicability of the Howey Test, the legal framework for determining if a financial instrument is a security, will be re-evaluated. A potential narrowing of this definition could significantly impact which crypto assets fall under SEC regulation, thereby facilitating greater innovation and product offerings in the crypto space.
Institutional Adoption & Market Dynamics
Q: Which major financial institutions are showing increased interest in crypto?
A: Major financial institutions like Citigroup and JPMorgan are signaling a strategic shift towards integrating digital assets. Citigroup is considering entry into the crypto custody space, while JPMorgan has allowed cryptocurrency purchases, indicating growing institutional confidence and involvement.
Q: How is Bitcoin's status changing within the US financial strategy?
A: Bitcoin is increasingly being viewed not just as a seized asset, but as a strategic digital asset. The establishment of a Strategic Bitcoin Reserve suggests its potential role as a non-traditional reserve asset, impacting monetary sovereignty and economic security in a multipolar financial order.
Q: What are the implications of major financial institutions integrating crypto services?
A: The integration of crypto services by traditional banking entities signifies a measured yet increasing confidence in digital assets. It suggests that cryptocurrencies are progressively reshaping core banking functions, such as asset custody and payment systems, positioning traditional finance to play a central role in the evolving crypto-financial ecosystem.
Global Crypto Landscape
Q: What are other countries doing in the global crypto race?
A: While El Salvador and the Central African Republic have adopted Bitcoin as legal tender, China is expanding its e-CNY, Russia and Iran are using crypto to bypass sanctions, and the EU is pursuing a Digital Euro. The UAE is actively positioning itself as a crypto-friendly hub.
Q: How is the global financial architecture being reshaped by digital assets?
A: The emergence of Bitcoin and other digital assets as instruments of state strategy is fundamentally reshaping the global financial architecture. Nations are increasingly viewing crypto not just as speculative technology but as a crucial component of future economic influence and power.
Crypto Market AI's Take
The US approach to cryptocurrency, particularly under the Trump administration, highlights a significant maturation of digital assets from a niche technological curiosity to a strategic economic tool. The FIT21 Act represents a crucial step towards regulatory clarity, which is essential for broader adoption and integration. Our platform,
Crypto Market AI, actively monitors these developments, providing AI-driven analysis that helps users navigate this evolving landscape. The integration of AI agents into financial services, as discussed in our articles on
AI Agents in Finance, mirrors this trend, showcasing how advanced technologies are being leveraged for sophisticated market analysis and automated trading strategies, aiming to enhance efficiency and security in the financial sector.
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