The United States is undergoing a pivotal shift in its approach to blockchain and cryptocurrency—from confrontation to collaboration. After years of regulatory uncertainty, enforcement-heavy tactics, and institutional resistance, there are now clear signs that American policymakers are embracing a more supportive stance. With new leadership, targeted regulations, and dedicated task forces, the U.S. is laying the groundwork for a future where crypto innovation can thrive domestically.
This evolving landscape offers a rare opportunity: to position America as the global leader in the next generation of the internet—Web3. Backed by insights from 11 leading experts at a16z and beyond, this article explores the critical steps needed to make the U.S. the true capital of cryptocurrency innovation.
Why Decentralization Matters—And Why It Needs Incentives
“Like gravity, centralization is a force hard to resist. Decentralization—distributing control across networks—requires immense effort to overcome.”
Decentralization isn’t just a technical feature; it's a foundational principle that enables open access, censorship resistance, and user ownership. Miles Jennings, General Counsel at a16z crypto, emphasizes that while decentralization has long struggled to compete with centralized systems due to coordination challenges, today’s technological maturity makes large-scale implementation feasible.
To accelerate adoption, however, builders need more than tools—they need incentives. A regulatory environment that rewards genuine decentralization through safe harbors, clear compliance pathways, and protection from overreach can empower innovators. Without such support, the natural pull toward centralization will continue to dominate.
👉 Discover how decentralized networks are reshaping finance and ownership
SEC Reform: Modernizing Regulation for the Digital Age
Scott Walker and Bill Hinman propose six immediate actions the Securities and Exchange Commission (SEC) can take to align with digital asset realities without compromising investor protection:
- Clarify the Howey Test application for tokens.
- Establish safe harbors for token projects undergoing decentralization.
- Create tailored disclosure frameworks for blockchain-based securities.
- Recognize on-chain governance as a factor in determining issuer status.
- Adopt technology-neutral rules that don’t favor legacy systems.
- Engage proactively with builders, rather than relying solely on enforcement.
These reforms would transform the SEC from a reactive enforcer into a forward-thinking regulator—one that fosters innovation while maintaining market integrity.
Unlocking the Potential of Staking in America
Staking allows users to secure proof-of-stake blockchains and earn rewards—a core component of decentralized infrastructure. Ji Kim and Alison Mangiero outline five steps for the SEC to ensure staking thrives:
- Recognize staking as a network participation mechanism, not an investment contract.
- Allow custodians and exchanges to offer staking services transparently.
- Provide clarity on tax treatment of staking rewards.
- Support interoperability standards across protocols.
- Encourage institutional participation through regulatory certainty.
By embracing staking, the U.S. can strengthen its digital asset ecosystem and promote broader network security.
Ending Mass Financial Surveillance
Grant Rabenn critiques the outdated Bank Secrecy Act of 1970, which mandates financial institutions to monitor all transactions—a system that creates vast databases vulnerable to breaches and abuse. Blockchain technology offers a better alternative: privacy-preserving compliance through cryptographic verification.
Rather than blanket surveillance, regulators should adopt risk-based approaches that protect civil liberties while combating illicit activity. Transparent, auditable blockchains enable accountability without sacrificing user privacy—a balance traditional finance has yet to achieve.
DeFi as a Financial Safety Net
Katherine Minarik shares a personal story: her family’s bank accounts were frozen indefinitely, with no explanation or recourse. In such moments, self-custodied crypto assets serve as a lifeline.
“That bank had indefinitely frozen all our accounts… It was terrifying.”
Decentralized Finance (DeFi) eliminates single points of failure. By enabling permissionless access to financial services, DeFi ensures that individuals retain control—even when traditional institutions fail.
👉 Explore how DeFi is building a more resilient financial future
Time to Tokenize Real-World Assets
Jenny Cieplak argues that tokenization—the process of representing real-world assets like real estate or bonds on blockchain—can modernize finance. Yet current SEC practices often block these innovations under outdated securities laws.
With proper regulation, banks and asset managers could leverage blockchain for faster settlements, increased liquidity, and global accessibility. The U.S. must stop treating blockchain like a threat and start seeing it as an upgrade to financial infrastructure.
The DOJ’s Approach to DeFi Is Flawed
Miller Whitehouse-Levine and Amanda Tuminelli warn that recent Department of Justice (DOJ) actions against DeFi protocols are based on faulty assumptions about control.
“Holding car manufacturers liable for reckless driving makes no sense—and neither does prosecuting developers for how users interact with open protocols.”
DeFi protocols operate autonomously. Targeting developers for user behavior stifles innovation and misapplies legal principles. Regulators must distinguish between centralized actors and decentralized systems.
The Case for Decentralized Stablecoins
While centralized stablecoins dominate today’s market, Luca Prosperi highlights their reliance on traditional financial intermediaries—creating systemic risks.
Decentralized stablecoins, backed by crypto collateral and governed by code, offer a trustless alternative. Projects like M^0 aim to build resilient monetary infrastructure immune to corporate or government interference.
“This world of decentralized stablecoins could revolutionize not just money creation—but the entire financial中介 system.”
Crypto Needs Its Own Rules
Scott Walker reiterates that applying traditional securities rules to crypto often fails. The SEC’s “rule-by-enforcement” and “rule-by-extension” approaches discourage innovation.
Instead, the agency should develop native regulatory frameworks designed specifically for digital assets—considering factors like decentralization level, token utility, and on-chain governance.
Building a Smart Crypto Tax Policy
David Kerr points out that current tax rules don’t reflect the operational realities of decentralized systems. Frequent microtransactions, yield farming, and protocol rewards create reporting burdens that hinder adoption.
A smarter approach would:
- Exempt small-value transactions from taxable events.
- Standardize cost-basis tracking across wallets.
- Delay taxation until realized gains.
- Fund IRS education on blockchain analytics.
Clearer tax policy boosts compliance and encourages mainstream participation.
Should the U.S. Create a Bitcoin Strategic Reserve?
Christian Catalini supports the idea—not as an end goal, but as part of a broader strategy. Holding bitcoin on the national balance sheet signals commitment to digital assets.
But the real opportunity lies in integrating bitcoin into global finance in ways that reinforce U.S. economic leadership—through faster cross-border payments, reserve diversification, and financial inclusion.
Frequently Asked Questions (FAQ)
Q: What does it mean for the U.S. to become the 'crypto capital'?
A: It means establishing clear regulations, fostering innovation, attracting top talent and capital, and leading global standards in blockchain technology and digital assets.
Q: Is staking considered a security under current U.S. law?
A: Not definitively—the SEC has taken varied positions. Clearer guidance is needed to determine when staking constitutes an investment contract versus network participation.
Q: Can DeFi be regulated without killing innovation?
A: Yes—by focusing regulation on centralized access points (like on-ramps), rather than protocol-level code or decentralized communities.
Q: Are decentralized stablecoins safer than centralized ones?
A: They reduce counterparty risk by eliminating reliance on banks or custodians, but come with different risks like smart contract vulnerabilities or collateral volatility.
Q: How can tokenization benefit traditional finance?
A: It enables 24/7 trading, fractional ownership, automated compliance, and faster settlement—modernizing outdated systems with blockchain efficiency.
Q: Would a U.S. bitcoin reserve stabilize the market?
A: It could increase legitimacy and demand, but must be part of a comprehensive digital asset strategy—not a symbolic gesture.
The path forward is clear: The U.S. must embrace decentralization, modernize outdated regulations, and invest in blockchain infrastructure. With thoughtful policy and public-private collaboration, America can lead the next era of finance and technology.
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