Crypto keeps launching despite regulatory stall
The industry stopped waiting for Washington and started fitting blockchain into existing regulatory lanes.
In brief
The industry stopped waiting for Washington and started fitting blockchain into existing regulatory lanes. Crypto companies are building institutional products one narrow use case at a time, using existing regulatory frameworks instead of waiting for comprehensive rules. Originally reported by Pymnts.
Senate kills crypto clarity bill
On September 15, the Senate failed to pass the Digital Asset Market Structure Clarity Act with a 49-50 vote, falling short of the 60 needed. But the industry didn't stop building.
Coinbase, Circle, S&P move forward
Within days of the failed vote, Coinbase launched a product for community banks, Circle introduced Arc blockchain, and S&P Global acquired OpenZeppelin to expand risk assessment for on-chain products.
Regulators carve out their lanes
The SEC announced it would facilitate on-chain trading of tokenized stocks through an Innovation Exemption, while the CFTC submitted a separate proposal to regulate crypto asset transactions.
Stablecoins become payment rails
Stablecoins are being absorbed into regulated finance as payments infrastructure. Bottomline partnered with Chainlink to let banks connect to multiple blockchains, and Visa is connecting payment data to on-chain lending.
Crypto unbundles before regulation
The market is breaking crypto apart into separate categories: stablecoins as money movement, tokenized stocks as securities, bank digital money under prudential rules, and blockchain lending connected to payments.
Fragmentation replaces prohibition risk
The regulatory risk is shifting from whether crypto will be allowed to exist to which regulator governs which part of a transaction. Multiple agencies could have overlapping authority, and rules could shift with administrations.
Younger consumers show crypto interest
Research found 31 percent of millennials express strong interest in using cryptocurrency for payments, with 28 percent interested in stablecoins. Only 6 percent of baby boomers and seniors showed interest in stablecoin payments.
Clarity accelerates but isn't required
Eric Queathem, CEO of Velocity, said the Senate vote doesn't change daily business because global institutions are already settling on stablecoin rails. Clear rules would shorten the path to volume and bring in waiting companies.
“[The] vote doesn't change what we see every day.”
The main idea
Crypto companies are building institutional products one narrow use case at a time, using existing regulatory frameworks instead of waiting for comprehensive rules.
