March 23: This week in crypto federal policy
DC Decentralized: A weekly newsletter on developments in digital asset and blockchain federal policy
This week decoded
Sens. Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) have reportedly reached an agreement in principle on legislative language on stablecoin yields, potentially clearing the way for Senate consideration of market structure legislation. The language will be vetted by digital asset and banking industry stakeholders early this week. Alsobrooks reportedly suggested the agreement prohibits yield payments “on a passive balance.”
In the Trump Administration, the SEC published an interpretation on the application of Federal securities laws to crypto assets and transactions, including its long-awaited token taxonomy and clarity on how the Howey test applies to crypto. The CFTC released FAQs on crypto and blockchain registrants and registered entity activities. The IRS extended temporary relief for digital asset brokers whose users seek to identify the specific broker-held tokens they sold or transferred.
Read more below
Congress
Hearings
Last week
On March 17, the House Financial Services Committee holds a hearing on “Updating America’s Financial Privacy Framework for the 21st Century.”
On March 18, the Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity Subcommittee hearing on “Revisiting the Treasury-Fed Accord.”
This week
On March 25, the House Financial Services Committee holds a hearing on “Tokenization and the Future of Securities: Modernizing Our Capital Markets.”
On March 25, the Joint Economic Committee holds a hearing on “The Rising Global Scam Economy: Modernizing Federal Approaches to Protect Americans from Foreign Fraudsters.”
On March 26, the House Financial Services Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee holds a hearing on “Innovation at the Speed of Markets: How Regulators Keep Pace with Technology.”
Legislation
Sens. Dick Durbin (D-IL), Elizabeth Warren (D-MA), Peter Welch (D-VT), Bernie Sanders (I-VT), Tina Smith (D-MN), and Mazie Hirono (D-HI) introduced the No Bailout for Crypto Act to prohibit the use of taxpayer funding to cover the cost of a federal bailout for crypto companies if the industry causes an economic crash or sees mass bankruptcies. (Text)
Publications and Events
The Congressional Research Service (CRS) published papers on:
Trump Administration
Securities and Exchange Commission (SEC)
The SEC published as a final rule an interpretation regarding the application of the Federal securities laws to certain types of crypto assets and certain transactions involving crypto assets. The rule provides a coherent token taxonomy for digital commodities, digital collectibles, digital tools, stablecoins, and digital securities; addresses how a “non-security crypto asset” may become subject to, and how it may cease to be subject to, an investment contract; and clarifies the application of federal securities laws to airdrops, protocol mining, protocol staking, and the wrapping of a non-security crypto asset. (Federal Register)
Commodity Futures Trading Commission (CFTC)
The CFTC’s Market Participants Division and Division of Clearing and Risk published responses to frequently asked questions concerning registrant and registered entity activities relating to crypto assets and blockchain technologies. (Press release)
Internal Revenue Service (IRS)
IRS released Notice 2026-20 extending the temporary relief that allows taxpayers to use simplified methods under section 1012 to identify which specific units of a broker-held digital asset they are selling or transferring. (Notice)
Noteworthy Quotes and Events
ADMINISTRATION
Securities and Exchange Commission (SEC)
SEC Chair Paul Atkins and Commissioners Hester Peirce and Mark Uyeda published an op-ed entitled “Crypto Markets – and the American People – Deserve Clarity,” saying, “The Commission has released a landmark interpretation that finally provides clear guidelines. We establish a straightforward taxonomy of crypto assets — most of which are not securities — and clarify how the Supreme Court’s Howey test applies when a crypto asset is part of an investment contract… The SEC’s role is to provide merit-neutral clarity, not dictate how teams design their projects. By providing this guidance as Congress finalizes legislation, we ensure that crypto asset innovation can take root and thrive here at home immediately. Clear rules also allow regulators to focus enforcement resources where they belong: combatting fraud and protecting market integrity within the limits of our statutory authority.” (Op-ed)
SEC Chair Paul Atkins said, “After more than a decade of uncertainty, this interpretation will provide market participants with a clear understanding of how the Commission treats crypto assets under federal securities laws. This is what regulatory agencies are supposed to do: draw clear lines in clear terms. It also acknowledges what the former administration refused to recognize – that most crypto assets are not themselves securities. And it reflects the reality that investment contracts can come to an end. This effort serves as an important bridge for entrepreneurs and investors as Congress works to advance bipartisan market structure legislation, which I look forward to implementing with Chairman Selig in the near future.” (Press release)
Commodity Futures Trading Commission (CFTC)
CFTC Chair Michael Selig said, “For far too long, American builders, innovators, and entrepreneurs have awaited clear guidance on the status of crypto assets under the federal securities and commodity laws. With today’s interpretation, the wait is over. Chairman Atkins and I are committed to fostering a regulatory environment that allows the crypto industry to flourish in the United States with clear and rational rules of the road. Today’s joint agency action reflects a shared commitment to developing workable, harmonized regulations for the new frontier of finance.” (Press release)
White House
On reports of a market structure deal, President’s Council of Advisors for Digital Assets Executive Director Patrick Witt posted “Credit to SenThomTillis and Sen_Alsobrooks for bridging the partisan divide to tackle a difficult issue. More work to be done to close out this and other outstanding issues, but this is a major milestone toward passing the CLARITY Act.”
CONGRESS
Market Structure
Sen. Angela Alsobrooks (D-MD) said of the tentative agreement on stablecoin yields, “Sen. Tillis and I do have an agreement in principle. We’ve come a long way. And I think what it will do is to allow us to protect innovation, but also gives us the opportunity to prevent widespread deposit flight.” (Politico)
Sen. Thom Tillis (R-NC) said “In working with the White House, I think we have an agreement. Now we have to vet it with industry, because they are a party to an ultimate deal.” (Politico)
Senate Intelligence Committee Hearing on Worldwide Threat Assessment Q&A
Sen. James Lankford (R-OK)
Lankford: “A lot of Oklahomans I talk to, and quite frankly folks even outside the state, when they think about threats… they think about the threat to their family… a lot of it is international scammers that are now reaching into the United States to be able to gather data or to be able to steal money from them… FBI had noted that in 2024, it was almost $17 billion that was assumed lost to scammers… some estimates are as high as $50 billion on it… This is accelerating at a pace that’s pretty dramatic with the use of AI on this.”
FBI Director Kash Patel: “What we’re doing on the homeland is going out into the streets of America, on the online platforms in America, and shutting down those networks and shutting down the capability of AI to interfere…. The scam center compounds are largely located in Cambodia and Burma and on the Thai border… we’ve… eliminated and scuttled… numerous compounds… and… go into those countries and shut down every single scam center compound.” (Press release)
Miscellaneous
Sen. Dan Sullivan (R-AK) posted “Last week I gave a speech on the Senate floor on the importance of competing against China and winning the race against China on key emerging technologies: crypto, biotech, and AI. Today, the Trump administration took a critical and commonsense step forward by releasing a framework that gives Congress a clear roadmap to capitalize on AI’s potential. AI has enormous positive potential to transform health care, grow our economy, and improve the lives of everyday Americans. This framework gets the big things right: protecting our kids online, protecting our First Amendment rights, establishing a uniform national policy that gives innovators certainty, and recognizing that, to win the AI race with China, we need to continue unleashing American energy dominance. While we are currently ahead in the AI race, we can’t be complacent. I look forward to working with my Senate colleagues on both sides of the aisle to turn this framework into law.”
Rep. Bryan Steil (R-WI) posted “Crypto and Digital Asset regulations should be forward-looking, protect consumers, and allow the US to outcompete China. If we do that, the US will win the Web3 race.”
Rep. Tom Kean (R-NJ) posted “Digital assets are here to stay, and we must maintain regulatory clarity in order to support U.S. leadership in the crypto space. I cosponsored the Blockchain Regulatory Certainty Act to protect blockchain developers and service providers from being misclassified. This clarification protects American innovation and prevents regulatory overreach so we can continue to advance the future of digital finance.”
Sen. Dick Durbin (D-IL) posted “2008 proved that we cannot leave Americans on the hook to save a failed industry. That’s why today I’m introducing the No Bailout for Crypto Act to ensure that taxpayers aren’t left holding the bag when the crypto industry inevitably crashes.”
Rep. Al Green (D-TX) posted “Today, Thursday, March 19, 2026, sometime between 12:00-1:00 p.m. ET, I will speak on the topic – ‘Why the crypto industry is spending mega millions of dollars to control Congress.’”
Rep. Max Miller (R-OH) posted “It’s as simple as it sounds. The Digital Asset PARITY Act protects everyone involved by bringing clarity and parity to the tax treatment of digital assets. Great conversation with RepHorsford at DigitalChamber’s DCBlockchain Summit on how we’re working together to bring much-needed certainty to this space.”
Sen. Cynthia Lummis (R-WY) posted “America can’t lead in global financial innovation if we can’t even write the rules. The Clarity Act paves the way to make the U.S. the digital asset capital of the world: Clear line between securities & commodities; Strong consumer protections; American innovation.”
Lummis also posted “Clear rules. Clear regulations. Clear jurisdiction.
That’s what Clarity is about. It’s time to get digital asset market structure across the finish line.”Lummis also posted “President Trump pledged to make America the digital asset capital of the world. The Clarity Act is how we make that happen. Let’s get it done, once and for all.”
Financial Services GOP posted “This is a welcome development from SECGov and CFTC as Congress works to enact the CLARITY Act, establishing a functional framework for the digital asset ecosystem.”
Rep. Bryan Steil (R-WI) posted “SECGov and SECPaulSAtkins just dropped a legal interpretation for crypto assets that reflects many of the ideas in CLARITY. This is a great first step, time to build on it and pass CLARITY!!”
What I’m Reading This Week
About Zero One Strategies
Zero One Strategies is a specialized government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.
The practice focuses on key areas such as artificial intelligence, digital assets, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.
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