The U.S. cryptocurrency industry is on the cusp of a regulatory breakthrough—or so it hopes. With President Donald Trump’s re-election, the crypto sector anticipated swift regulatory clarity through new laws governing stablecoins and market structures. However, as the President’s ambitious August deadline approaches, debates over whether to pass these laws separately or together threaten to delay progress. Here’s a deep dive into the current state of U.S. crypto legislation, the key players involved, and what it means for the future of digital assets.
The Promise of Crypto Regulation Under Trump
President Trump has made no secret of his support for the cryptocurrency industry, vowing to deliver regulatory clarity by August. This promise comes after years of uncertainty, where the industry faced what many called “regulation by enforcement” under the Biden administration. With Trump’s administration adopting a crypto-friendly stance—evident in the Securities and Exchange Commission’s (SEC) recent pro-industry policies—the stage is set for transformative legislation.
Two critical pieces of legislation are at the forefront:
Stablecoin Legislation: Aimed at regulating tokens pegged to the U.S. dollar, such as USDC, to ensure they are backed by secure assets like U.S. currency or short-term bonds.
Market Structure Legislation: Designed to provide a comprehensive regulatory framework for digital assets, offering clear guidelines for token issuers, crypto exchanges, and other market participants.
These laws are seen as essential for fostering innovation, attracting institutional investors, and cementing the U.S. as a global leader in cryptocurrency.
Stablecoin Legislation: A Bipartisan Priority
Stablecoin legislation enjoys broad bipartisan support in Congress, reflecting the urgency to regulate this fast-growing asset class. Stablecoins, which are designed to maintain a stable value by pegging to assets like the U.S. dollar, are increasingly used for payments and as a bridge between traditional finance and crypto markets.
The Senate’s stablecoin bill is poised to surpass the 60-vote threshold needed to advance, a rare feat in today’s polarized Congress. The proposed law would require stablecoin issuers to back their tokens with high-quality assets under federal or state oversight. This move aims to protect consumers and ensure financial stability.
However, not everyone is on board. Critics, including Senators Elizabeth Warren and Representative Maxine Waters, argue that the legislation fails to prevent tech giants or high-profile individuals—like Elon Musk or even the President himself—from launching their own stablecoins. Meanwhile, banks worry that stablecoins could divert deposits, limiting their ability to provide credit. On the flip side, retailers support the bills, seeing stablecoins as a way to bypass high-fee payment systems like credit cards.
Market Structure Legislation: A Tougher Sell
While stablecoin legislation has momentum, market structure legislation lags behind. This bill aims to create a broad regulatory framework for digital assets, addressing everything from token issuance to exchange operations. It’s seen as critical for companies like Coinbase, the largest publicly traded crypto exchange in the U.S., which has long advocated for clear rules to replace the SEC’s enforcement-heavy approach.
Analysts at Benchmark recently initiated coverage of Coinbase with a “buy” rating, citing the potential for regulatory clarity to attract institutional investors. “As the leading U.S. crypto platform, Coinbase is particularly well-positioned to benefit from the impact of regulatory clarity,” they wrote, setting a $252 price target. At the time of writing, Coinbase shares were trading around $200, down from a 52-week high of $349.75.
Despite its importance, market structure legislation faces challenges. Congressional staffers and industry representatives report less consensus on this bill compared to stablecoins, with complex policy points still under negotiation.
To Combine or Not to Combine?
The biggest hurdle to meeting Trump’s August deadline is whether to pass stablecoin and market structure legislation separately or as a combined package. This debate has divided stakeholders:
- Separate Bills: Advocates, including some Senate Banking Committee members, argue that stablecoin legislation’s momentum makes it ripe for quick passage. Keeping the bills separate could allow more time to refine the market structure proposal, which requires additional vote-whipping and policy refinement. Senator Tim Scott, who chairs the Senate Banking Committee, is actively advancing bipartisan stablecoin legislation while engaging colleagues on market structure.
- Combined Bills: Others, including Coinbase, believe combining the bills is the most efficient path forward. “Stablecoin legislation and market structure legislation are two sides of the same coin,” said Kara Calvert, Coinbase’s Vice President of U.S. Policy. “Consumers need both, so it’s up to Congress to pass both bills into law before the President’s August deadline.” Venture firm Andreessen Horowitz (a16z), a major crypto investor, is open to either approach as long as both bills pass, according to sources familiar with their discussions.
Combining the bills could delay action past the August deadline, as it would require reconciling differences and building broader support. However, a holistic approach could create a more cohesive regulatory framework, aligning the U.S. with other major markets like the European Union, which have adopted comprehensive crypto policies.
Industry Heavyweights Weigh In
The crypto industry has invested heavily in shaping this legislative push. In 2024, digital asset firms spent hundreds of millions supporting Trump’s campaign and other congressional races. a16z donated $89 million to the 2024 election cycle, while Coinbase contributed nearly as much, including funds for Trump’s inaugural celebrations, according to OpenSecrets.
Kraken, another leading crypto exchange, supports passing both bills by August. “The two bills are essential components of a comprehensive regulatory framework,” said Jonathan Jachym, Kraken’s Head of Global Policy. “Other major markets have recognized the importance of a holistic approach and have addressed these policies together.”
Meanwhile, some stablecoin issuers are exploring alternatives in case legislation stalls. Companies like Circle, the issuer of USDC, are reportedly considering applying for bank charters to gain legitimacy, according to The Wall Street Journal. This move could provide a regulatory workaround but underscores the industry’s urgent need for clear rules.
Why It Matters
The outcome of this legislative push will have far-reaching implications:
- For Consumers: Clear regulations could enhance trust in stablecoins and digital assets, making them safer for everyday use.
- For Businesses: Companies like Coinbase and Kraken stand to benefit from a predictable regulatory environment, which could attract institutional investors and drive market growth.
- For the U.S. Economy: Robust crypto laws could position the U.S. as a global hub for blockchain innovation, preventing talent and capital from fleeing to jurisdictions with clearer rules.
- For Global Markets: A U.S. framework could set a precedent, influencing how other countries regulate digital assets.
Without new laws, the industry remains vulnerable to regulatory shifts under future administrations, despite the current crypto-friendly climate.
What’s Next?
As Congress races to meet Trump’s August deadline, all eyes are on key lawmakers like House Financial Services Chairman French Hill, who emphasizes the need for both bills without insisting they be combined. The Senate Banking Committee’s bipartisan efforts on stablecoins offer hope, but the market structure bill’s complexity could slow progress.
For now, the crypto industry waits—and prepares. Whether through legislation or alternative paths like bank charters, the push for legitimacy continues. As the debate unfolds, one thing is clear: the decisions made in the coming months will shape the future of cryptocurrency in the U.S. for years to come.