March 30: This week in crypto federal policy
DC Decentralized: A weekly newsletter on developments in digital asset and blockchain federal policy
This week decoded
After months of negotiations, market structure continues to dominate attention in Washington. Crypto and banking industry executives reviewed the stablecoin yield agreement between Sen. Thom Tillis (R-NC), Sen. Angela Alsobrooks (D-MD), and the White House, but some crypto industry leaders reportedly informed Senate offices they could not support the deal. Tillis told reporters he is considering a “crypto-palooza” summit between banking and digital asset stakeholders to try to break the impasse.
Frustration was already running high on Capitol Hill (recall Sen. Mark Warner’s (D-VA) remark, “I feel like I’m in crypto hell,” during a February hearing with Treasury Secretary Bessent). Those tensions are now spilling more openly into public view. Patrick Witt, a lead White House negotiator, posted on X using a quarterback “internal clock” analogy targeting industry stakeholders, before taking it down and instead emphasizing the urgency of passing legislation under a Republican-controlled Congress.
Meanwhile, crypto tax legislative proposals were released in both the House and Senate.
Within the Administration, the CFTC announced the launch of an Innovation Task Force and David Sacks stepped down as White House AI & Crypto Czar to become co-chair of the President’s Council of Advisors on Science and Technology.
DC Decentralized will return on April 20. Enjoy spring break!
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Congress
Hearings
Last week
On March 25, the House Financial Services Committee held a hearing on “Tokenization and the Future of Securities: Modernizing Our Capital Markets.”
On March 25, the Joint Economic Committee held 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 held a hearing on “Innovation at the Speed of Markets: How Regulators Keep Pace with Technology.”
Legislation
Sen. Ted Budd (R-NC) reintroduced the Virtual Currency Tax Fairness Act to exclude from gross income de minimis gains or losses from certain sales or exchanges of virtual currency. (Text)
Reps. Max Miller (R-OH) and Steven Horsford (D-NV) released updated discussion draft of the Digital Asset PARITY Act to provide guidance on how digital assets are treated in the tax code. (Punchbowl)
Sen. Jeff Merkley (D-OR) and Rep. Jamie Raskin (D-MD) introduced the STOP Corrupt Bets Act to ban betting through prediction markets on elections, government actions, sports, and military actions. (Text)
Correspondence
House Financial Services Ranking Member Maxine Waters (D-CA sent a letter to Federal Reserve Bank of Kansas City President and CEO Jeff Schmid requesting information regarding the Kansas City Fed’s decision to approve a limited purpose account for Payward Financial, doing business as Kraken Financial. (Letter)
Sen. Elizabeth Warren (D-MA) sent a letter to Jimmy “MrBeast” Donaldson, Founder of Beast Industries, and Jeffrey Housenbold, Chief Executive Officer, raising concerns about Beast Industries’ recent acquisition of Step, a financial technology app designed to provide banking services to children, and its interest in expanding into decentralized finance (DeFi). (Letter)
Trump Administration
White House
David Sacks stepped down as White House AI & Crypto Czar after hitting the 130-day limit on his role as a special government employee. Sacks is now Co-chair of the President’s Council of Advisors on Science and Technology.
Commodity Futures Trading Commission (CFTC)
CFTC Chair Mike Selig announced the launch of an Innovation Task Force chaired by CFTC senior adviser Michael Passalacqua.
Financial Crime Enforcement Network (FinCEN)
FinCEN’s proposed rule on Permitted Payment Stablecoin Issuer Anti-Money Laundering/Countering the Financing of Terrorism Program and Sanctions Compliance Program Requirements has been reviewed by the White House Office of Information and Regulatory Affairs.
Federal Reserve
Fed Governor Lisa Cook delivered remarks on “Reflections on Financial Stability” in which she said, “… we should embrace responsible changes that strengthen our financial system, not hinder them. The Committee on Financial Stability and the Board’s staff monitor financial and technological innovations that are in early stages of development, including digital assets and the use of artificial intelligence. The fact that the U.S. financial system is the largest and deepest in the world is the result of decades of successive, and transformative, financial and technological innovations. As a corollary, we need to understand innovations at early stages to see the system’s trajectory. We have also observed innovations that have brought unintended consequences, and we need to stay abreast of potential risks in order to better understand where guardrails and industry engagement might be helpful.” (Remarks)
Noteworthy Quotes and Events
ADMINISTRATION
Commodity Futures Trading Commission (CFTC)
CFTC Chair Michael Selig posted “Crypto, AI and prediction markets are transformative and synergistic technologies. It’s critical that our laws and regulations accommodate the innovators and job makers in these industries, like APompliano, who is an entrepreneur and investor himself. The CFTC will develop fit-for-purpose rules so these technologies can flourish on US soil.”
Selig also posted “DavidSacks made POTUS’ vision of securing America as the global leader in innovation a reality by working tirelessly to advance pro-growth policies for AI and crypto. Thank you David for your leadership as President Trump’s AI and Crypto Czar. I look forward to working with you in your new capacity as co-chair of the President’s Council of Advisors on Science and Technology.”
Selig also posted “The CFTC has a statutory mandate to regulate the markets — not to pursue merit-based pet projects like Operation Chokepoint 2.0 and Anti-Crypto Armies. Under my leadership, the CFTC will return to focusing on fulfilling its statutory mission without overregulating and strangling innovators.”
Selig also posted “As a result of widespread debanking and misreporting in the news, we’re seeing trust in centralized gatekeepers being replaced with trust in decentralization and market systems. It’s essential that we create a regulatory framework that does not quash this trust revolution.”
Selig said, “You don’t want this patchwork of different states [when it comes to regulations]. You want one rulebook for derivatives, just like we want one rulebook for crypto.”
Selig also posted “For far too long, the Biden administration left crypto in limbo by driving many crypto firms offshore and creating confusion as to what’s a security and what’s not. SECPaulSAtkins and I have developed a new interpretation that provides regulatory clarity for the crypto markets.”
Selig also posted “Reshoring ‘true’ crypto perpetual futures in the US is a key piece of the CFTC’s innovation policy agenda. We are hard at work to get this done soon.”
On prediction markets, Selig said, “Prediction markets are one of the most exciting financial products in our regulatory purview right now… There’s this false media narrative that CFTC-regulated markets are the Wild West and have no regulation and that’s blatantly false. The CFTC uses complex surveillance tools and has seasoned career staff that pro-actively monitor these markets for insider trading and fraud… We’re looking forward to engaging with our exchanges, market participants, lawmakers, and tribal leaders to make sure we get this right. We don’t want to see these markets pushed offshore — they need to be regulated right here.” (Washington Reporter)
Securities and Exchange Commission (SEC)
The SEC posted “Chairman SECPaulSAtkins at the Digital Asset Summit 2026: ‘The interpretative release is not a panacea. We need to be ready, willing, and able, working closely with the CFTC. . . to provide clarity without overreaching and enable innovation.’”
White House
White House Adviser David Sacks posted “Getting crypto market structure legislation across the finish line remains a vital part of the President’s pro-innovation technology agenda which we will continue to push.”
President’s Council of Advisors for Digital Assets Executive Director Patrick Witt posted “Plenty of uninformed FUD circulating on social media this week. It’s all going to work out. Bullish.”
Witt also posted “I wonder how a future Democrat administration will handle stablecoin rewards. And developer protections. And DeFi. And the line between digital commodities and securities. Etc. Block passage of the CLARITY Act to find out!”
CONGRESS
Digital Asset PARITY Act
On a final introduced version of the Digital Asset PARITY Act, Rep. Max Miller (R-OH) said, “I would have liked to have it out already, so hopefully you’ll get full bill text over the next month or so.” (Tax Notes)
Rep. Steven Horsford (D-NV) said, “I think there will be technical revisions, with nothing material changing. That’s one of the reasons we did a draft, so that this was an open, transparent, and inclusive process.” (Tax Notes)
House Ways and Means Ranking Member Richie Neal (D-MA) said, “I think the problem with crypto is that people don’t know enough about it. I think we’re open to discussion so we learn more about it, for sure, but I don’t think there will be a caucus position on it.” (Tax Notes)
Coinbase Partnership on Mortgage Offerings
Sen. Elizabeth Warren (D-MA) said, “I cannot think of a worse move at this moment. This is not a moment to integrate a highly volatile asset into the middle of what is supposed to be a stable lending market.” (Punchbowl)
Sen. Bernie Moreno (R-Ohio) said, “Why not?” (Punchbowl)
Sen. Kevin Cramer (R-ND) said, “Whether a crypto blockchain is secure enough for mortgages backed by Fannie Mae — I’d have to get schooled up on it a little bit. But, wow.” (Punchbowl)
Market Structure
On joining the Senate Agriculture Committee’s Digital Commodity Intermediaries Act, Sen. Jon Husted (R-OH) said, “Congress is overdue in providing the regulatory certainty and consumer protections the digital asset space needs. This bill represents an important first step toward delivering that clarity. If the United States is going to lead in digital assets, we need a framework that is clear, practical and supports innovation and job creation here at home. I look forward to working with my colleagues to move this legislation forward. We must also advance broader efforts to establish a strong, modern market structure bill that protects consumers, gives developers confidence to build in the United States and allows this technology to grow responsibly.” (Press release)
Senate Agriculture Chair John Boozman’s (R-AR) said, “This is a critical step toward creating clear rules for digital asset markets. Advancing this bill brings us closer to a U.S. regulatory framework that protects consumers while allowing American innovation and businesses to thrive. There’s still more work ahead, but I’m proud to lead this important effort and hopeful this will build momentum in the Senate to advance this legislation.” (Press release)
Sen. Cynthia Lummis (R-WY) posted “Don’t believe the FUD-- we have worked on a bipartisan basis for the last few weeks to make changes to Title 3 that make this bill the strongest protection for DeFi and developers ever enacted. We have to pass the Clarity Act to get these protections.”
Rep. Julia Letlow (R-LA) posted “I supported the GENIUS Act to protect consumers while keeping the U.S. well positioned in the digital economy. As this bill is implemented under President Trump’s leadership, I look forward to seeing America lead the world in crypto innovation.”
Miscellaneous
Rep. Bryan Steil (R-WI) posted “’Digital Assets, AI, and real time payments have already begun to revolutionize our financial system. We must ensure regulators have the tools necessary to protect consumers without stifling US innovation.’”
Rep. David Schweikert (R-AZ) posted “A grandmother is stuffing money into a Bitcoin machine. The owner knows it is fraud and tries to stop her. She lies to him anyway because the stranger on the phone already has her believing the lie. That is what AI changes. It can pull details off social media and put a familiar voice on the line. That is how the fraud starts to sound real. Then the transfer goes through before the family even knows there is a problem. My own father has been scammed multiple times. We need to stop treating this like a simple education problem and start stopping the transfer before the savings are gone.”
Rep. Rashida Tlaib (D-MI) posted “Two crypto bros are the biggest slumlords in Detroit. The conditions in nearly 700 homes and apartments owned by RealT companies are shocking: smashed windows, flooded basements, no heat. Selling ‘digital tokens’ cannot be a free pass to profit from dangerous living conditions.”
Rep. Warren Davidson (R-OH) posted “Central Bank Digital Currency (CBDC) corrupts money into a tool for surveillance, coercion, and control. It is communist money for the digital age. Completely ban CBDC!”
What I’m Reading This Week
Tax Policy for the Digital Asset Age, Coinbase Institute.
Breaking Up Is Hard to Do: Howey and the SEC’s Crypto Asset Classification Guidance, Lewis Rinaudo Cohen, Samson Enzer, Gregory Strong, Gary Kalbaugh, Brian Farber, and Edward Leaf, CahillNXT.
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.
Contact us at Stacey@ZeroOneStrategies.com
