March 9: This week in crypto federal policy
DC Decentralized: A weekly newsletter on developments in digital asset and blockchain federal policy
This week decoded
The Senate passed the 21st Century ROAD to Housing Act, temporarily barring the Federal Reserve from issuing or developing a CBDC until December 31, 2030. House Republicans, meanwhile, pressed for a permanent prohibition.
The Treasury Department released new findings and recommendations on countering illicit finance involving digital assets. The IRS proposed regulations aimed at streamlining electronic delivery of Form 1099-DA to taxpayers. Federal banking regulators issued FAQs clarifying the capital treatment of tokenized securities. At the same time, the SEC’s token taxonomy is now under White House review.
The White House also unveiled its National Cyber Strategy, highlighting opportunities to leverage digital assets and blockchain technologies.
Debate continues over how stablecoin yields fit into broader market structure legislation.
Read more below
Congress
Hearings
Last week
On March 5, the House Financial Services Financial Institutions Subcommittee holds a hearing on “Fighting Fraud on the Front Lines: Challenges and Opportunities for Financial Institutions.”
On March 5, the House Financial Services Capital Markets Subcommittee holds a hearing on “The Role of Self-Regulatory Organizations in U.S. Markets: Examining FINRA (Financial Industry Regulatory Authority) and the MSRB (Municipal Securities Rulemaking Board).”
Upcoming
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.”
On March 25, the House Financial Services Committee holds a hearing on “Tokenization and the Future of Securities: Modernizing Our Capital Markets.”
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
The Senate passed the 21st Century ROAD to Housing Act, which prohibits the Federal Reserve from issuing or creating a central bank digital currency (CBDC) before December 31, 2030. (Text)
Correspondence
Reps. Michael Cloud (R-TX), Chip Roy (R-TX), Scott Perry (R-PA), Clay Higgins (R-LA), Andy Ogles (R-TN), Byron Donalds (R-FL), Keith Self (R-TX), Andrew Clyde (R-GA), Josh Brecheen (R-OK), Mary Miller (R-IL), Eric Burlison (R-MO), Sheri Biggs (R-SC), Andy Biggs (R-AZ), Diana Harshbarger (R-TN), Russ Fulcher (R-ID), Andy Harris (R-MD), Mark Harris (R-NC), Eli Crane (R-AZ), Warren Davidson (R-OH), Ralph Norman (R-SC), Lauren Boebert (R-CO), Ronny Jackson (R-TX), Riley Moore (R-WV), Tom Tiffany (R-WI), Anna Paulina Luna (R-FL), Ben Cline (R-VA), Paul Gosar (R-AZ), Earl “Buddy” Carter (R-GA), Don Bacon (R-NE), Glenn Grothman (R-WI), Greg Steube (R-FL), and Randy Fine (R-FL) sent a letter to House Speaker Mike Johnson (R-LA) and Senate Majority Leader John Thune (R-SD) requesting the Senate amend the 21st Century ROAD to Housing Act to strike the CBDC sunset provision and make the prohibition permanent. (Letter)
Trump Administration
Treasury Department
Treasury released a “Report to Congress from the Secretary of the Treasury on Innovative Technologies to Counter Illicit Finance Involving Digital Assets” as part of its implementation of the GENIUS Act. The report outlines Treasury’s findings regarding the use of innovative strategies by financial institutions to counter illicit finance related to digital assets and includes legislative and regulatory recommendations. (Report)
Internal Revenue Service (IRS)
The IRS published proposed regulations that would provide digital asset brokers that are required to furnish to their customers written statements reflecting information provided to the IRS with respect to digital asset sale transactions with an alternative process for obtaining consent from their customers to receive these statements in an electronic format without offering a paper delivery alternative. The public comment period ends May 5. (Federal Register)
Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation
The federal banking agencies issued answers to frequently asked questions to clarify the capital treatment of tokenized securities, clarifying that an eligible tokenized security should generally receive the same capital treatment as the non-tokenized form of the security under the capital rule, that the capital rule is technology neutral, and the technologies used to issue and transact in a security do not generally impact its capital treatment. (FAQs)
Securities and Exchange Commission (SEC)
The SEC has sent a draft framework “Commission Interpretation on Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets” to the White House Office of Information and Regulatory Affairs (OIRA) for final review; the framework includes interpretive guidance on a “token taxonomy” to clarify when a token is a security and when securities rules apply. (Reginfo.gov)
On March 12, the SEC holds a meeting of the Investor Advisory Committee to consider recommendations regarding the tokenization of equity securities.
White House
The White House released its National Cyber Strategy, saying, “Securing American innovation and protecting our national intellectual advantage will be paramount. We will build secure technologies and supply chains that protect user privacy from design to deployment, including supporting the security of cryptocurrencies and blockchain technologies.” (Report)
Noteworthy Quotes and Events
ADMINISTRATION
White House
President Trump posted “The Genius Act is being threatened and undermined by the Banks, and that is unacceptable — We are not going to allow it. The U.S. needs to get Market Structure done, ASAP. Americans should earn more money on their money. The Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda that will end up going to China, and other Countries if we don’t get The Clarity Act taken care of. The Genius Act was the U.S.A.’s first big step to make the United States the Crypto Capital of the World, and getting The Clarity Act done is the next step to finish the job and, most importantly, keep this big and powerful Industry in our Country. The Banks should not be trying to undercut The Genius Act, or hold The Clarity Act hostage. They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People. This Industry cannot be taken from the People of America when it is so close to becoming truly successful. Thank you for your attention to this matter! President DONALD J. TRUMP”
White House Executive Director of the President’s Council of Advisors for Digital Assets Patrick Witt posted “Can someone please explain to me the logic here? No compromise on CLARITY means no restrictions on intermediaries offering stablecoin rewards. If you believe the banks’ argument about deposit flight, this would be catastrophic. Feels like I’m watching an arsonist threaten to burn down their own home.”
Witt also posted “The deceit here is that it is not the paying of yield on a balance per se that necessitates bank-like regulations, but rather the lending out or rehypothecation of the dollars that make up the underlying balance. The GENIUS Act explicitly forbids stablecoin issuers from doing the latter. Stablecoins ≠ Deposits.”
Securities and Exchange Commission (SEC)
SEC Chair Paul Atkins posted “President realDonaldTrump is right: the U.S. needs clear rules for digital asset markets. The CLARITY Act helps ensure entrepreneurs build the next gen of financial tech here at home. I look forward to working with ChairmanSelig to help implement CLARITY in the near future.”
Commissioner Hester Peirce posted “I plan to be at Exchange2026 in Las Vegas on March 16. If anyone wants to meet with me, please send an email to CommissionerPeirce@sec.gov with Las Vegas in the subject line and a brief description of what you’d like to discuss.”
Commodity Futures Trading Commission (CFTC)
CFTC Chair Mike Selig posted “Thank you RepBryanSteil for your leadership on digital asset market structure. The CFTC stands ready to implement purpose-fit digital asset regulations to help ensure the U.S. remains the crypto capital of the world.”
Selig said about former CFTC and SEC Chair Gary Gensler, “Someone like that can just run roughshod over entire industries, and that’s exactly what we saw — we saw with crypto, we saw it with prediction markets, we saw with AI, and many other industries where there was just this political motivation to target market participants.” He added, “The other problem with it is that it’s not transparent. I think that you’ve got to put the rules in clear Federal Register typeface so that everybody can see them and it’s fair.” (Washington Examiner)
About digital assets, Selig said, “Crypto really is a check on debanking and exclusion from the financial system,” Selig said. “It’s important that we have these alternative financial systems, that we have alternatives in our information, in our news media, as well as in our ability to be productive as individuals and as small businesses.” (Washington Examiner)
On market structure, Selig said, “We’ve been working through some wrinkles with the team, and the White House has really been excellent in trying to make sure that everybody’s at the table and can reach a consensus on this. It’s important to put things expressly in statute, and having a bill that clearly codifies and protects the crypto asset industry here in the U.S., I think it’s an important thing.” (Washington Examiner)
On the CFTC Innovation Advisory Committee, Selig said, “For too long, governments have kind of been this top-down ivory tower world of we’re going to tell businesses what to do and what’s best for them. We’re not going to do that anymore. We’re going to work together with industry to understand what they’re doing in the markets, what they’re building as a business, and collaborate on what the best regulatory framework looks like.” (Washington Examiner)
CONGRESS
Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee Elizabeth Warren (D-MA) issued a statement on the Securities and Exchange Commission (SEC) agreeing to end its case against Justin Sun, saying, “Last month, SEC Chair Atkins denied in front of Congress that the Trump Administration is giving a free pass to crypto billionaires with ties to Donald Trump. Justin Sun poured $90 million into Trump’s crypto ventures, and today the SEC agreed to drop its case against him. The SEC should not be a lap dog for Trump’s billionaire buddies, and any crypto legislation moving through Congress must stop the President’s crypto corruption.” (Press release)
Senator Cynthia Lummis (R-WY) announced that the Federal Reserve Bank of Kansas City approved Kraken Financial for a master account, saying, “This approval is a watershed moment for the digital asset industry. The Federal Reserve has acknowledged what I’ve always said was the case—that a digital asset company can balance innovation with strong risk management. Though approval took five and a half years, the Fed’s actions—at long last—validate Wyoming’s thoughtful regulatory framework. I look forward to resolution of further pending applications in the coming weeks. I congratulate Kraken, the Kansas City Fed, and the Board of Governors for this monumental step towards making payments safer, faster, and cheaper.” (Press release)
Rep. Bryan Steil (R-WI) posted “Making the U.S. the crypto capital of the world will unleash innovation and lower costs.”
Sen. Richard Blumenthal (D-CT) posted “Trump’s crypto ventures are merely a pay-to-play bribery scheme for gov’t favors. Justin Sun propped up Trump’s memecoin & bought a seat at the President’s VIP crypto dinner. In return, he gets a generous SEC settlement for Tron’s history of massive fraud.”
Rep. Ken Calvert (R-CA) posted “I’m thankful for President Trump’s leadership and ongoing efforts to ensure we have a level playing field for cryptocurrency. Earlier this Congress, I voted to pass the CLARITY Act and the GENIUS Act to provide regulatory clarity for digital assets.”
Sen. Jim Justice (R-WV) posted “We can support innovation and Bitcoin and still shut down the pipelines criminals exploit. We’ve done it with the U.S. Dollar. The right target is not lawful Bitcoin users, but the weak kiosk safeguards that let obvious, repeatable fraud run through these machines.”
Rep. Stephen Lynch (D-MA) posted “Since taking office, President Trump has launched a ‘Golden Age of Fraud.’ While he and his family rake in at least $1.2 billion from their crypto company, World Liberty Financial, President Trump has systematically dismantled the Consumer Financial Protection Bureau, eliminated the Securities and Exchange Commission’s crypto crimes enforcement unit, and dropped nearly all their enforcement actions against bad actors, leaving American consumers vulnerable to scams and fraudulent activity, which are becoming increasingly deceptive and harmful.”
Rep. Mike Carey (R-OH) posted “America needs to be the crypto capital of the world. Our tax code needs to reflect that priority, especially for crypto stakers and miners. I discussed the future of crypto taxes with the IRSnews CEO at a WaysandMeansGOP Committee hearing today”
Financial Services GOP posted Chair French Hill saying, “I want to thank POTUS and his top AI/Crypto advisers, davidsacks47 and Patrickjwitt , for engaging over in the Senate and trying to find a legislative solution for them. We did that last year in the House. We got 78 Democrats to join the Republicans, and we passed the CLARITY Act and the GENIUS Act.”
Rep. Ralph Norman (R-CA) posted “I’m proud to sign onto a letter urging House and Senate leadership to permanently ban a Central Bank Digital Currency (CBDC). Americans deserve financial freedom, not government-controlled money. A CBDC is essentially a digital dollar issued and controlled by the Federal Reserve. Unlike cash, it could allow the government to track transactions and monitor how Americans spend their money. That’s overreach at its core!! Why be bothered with this? A CBDC would give unelected bureaucrats unprecedented power over Americans’ finances and threaten basic economic freedom. The House already passed legislation to permanently ban a CBDC. The Senate must amend the 21st Century ROAD to Housing Act with STRONGER language before sending any bill to the House. A permanent prohibition is the ONLY way to protect Americans’ privacy and liberty.”
Rep. Buddy Carter (R-GA) posted “A Central Bank Digital Currency would be disastrous, giving unconstitutional power to the Federal Reserve to surveil YOU! Proud to join RepMichaelCloud’s letter to SpeakerJohnson & LeaderJohnThune, expressing the need to protect the financial freedom of American citizens.”
Rep. Michael Cloud (R-TX) posted “A Central Bank Digital Currency would expose every American to unconstitutional financial surveillance. It would hand the unelected Federal Reserve unprecedented power over your money — violating your civil liberties and financial freedom. The 21st Century ROAD to Housing Act has language to temporarily ban a CBDC that — in the perverse way the swamp interprets things — would actually create an on ramp to research, creation, and adoption of a CBDC. This bill should be dead-on-arrival unless the Senate includes stronger, permanent language forever banning a CBDC. Thank you to the 31 Members of Congress who joined me in demanding exactly that.”
Sen. Cynthia Lummis (R-WY) posted “Digital assets make payments safer, faster, and cheaper. Today’s announcement marks a new era for America’s financial system—this is only the beginning.”
Rep. Riley M. Moore (R-WV) posted “I joined RepMichaelCloud in sending a letter urging the Senate to include GOPMajorityWhip’s Anti-CBDC Surveillance State Act in any housing package. Mountaineers are always free, and Congress must permanently ban any effort to establish a surveillance state Central Bank Digital Currency. We must defend Americans against Chinese Communist Party-style limitless government surveillance.”
Rep. Anna Paulina Luna (R-FL) posted “If the Road to Housing Bill the Senate is sending over does not have a permanent ban on CBDC’s in it, it will die in the house. This is not negotiable. CBDC’s = No good.”
House Ways and Means Hearing on IRS Oversight Q&A
Rep. Mike Carey (R-OH)
Rep. Mike Carey (R-OH): “First, I’m going to talk a little bit about crypto as it relates to the staking rewards. Secondly, if we have some time, I’d like to talk a little bit about some of the AI tools kind of build upon what some of the other members have talked about. As you know, when the taxpayer stakes their crypto, the taxpayer produces new tokens through their own computation activity of validating the network’s transactions, similar to a farmer who is harvesting crops or a miner who is actually extracting some type of mineral or manufacturer producing products. Now, in 2023, the Biden IRS issued guidance treating newly created tokens as actual income taxed at the time of creation, unlike any other newly created property. I think you and I have talked about this before, but the White House Working Group of 2025 digital assets report explicitly recommended to the Treasury and the IRS to review previously issued guidance on the timing of the income from staking and mining and it’s considered whether to clarify or whether to moderate or to reverse it. So a few months ago, me along with several of my colleagues, I think 18 in total, including five of us that actually set off this committee, I inquired about this guidance. NCIRS current timeline for completing that review, and as the agency prepared to reverse the previous administration’s guidance, if it is found to be inconsistent with how other self-created property is taxed.”
Frank Bisignano, IRS CEO: “Yeah, thank you very much and it’s a timely question. We’re in deep review on it. I’m happy to come, have my staff come and brief your staff on progress and talk about next steps forward if that works for you.”
Carey: “That works great. And let me just say one other thing is if we’re going to get the teams together here, one other thing is many of the digital asset foundations that steward blockchain protocols are based outside of the United States. And due to the regulatory uncertainty, I firmly believe that the tax policy should, we all want to make sure that we continue to grow, but this tax pay, this tax policy should, we should encourage the onshoring of these digital assets. So, it’s something that I’d like to work with your team on as we get together, we’d like to do that.”
Rep. Max Miller (R-OH)
Rep. Max Miller (R-OH): “Thank you, Mr. Chairman, right now, thanks for coming. I want to focus on tax modernization and really want to focus on digital assets. I believe digital assets represent one of the most significant economic opportunities in the global economy right now, the United States can lead in this space, but leadership requires clear, workable tax rules that promote compliance without stifling innovation. The IRS plays a critical role in getting this right. Clear Rules, smart reporting, thresholds and administrable standards will strengthen compliance while ensuring that innovation and capital it attracts remains here in the United States. CEO Bisignano, the IRS recently issued revenue procedure 2025-31 allowing digital asset ETPs structured as grantor trust to participate in staking. This updated guidance provided a first step toward meaningful certainty and demonstrated that IRS can adapt as markets evolve, however important interpretive questions remain about the scope and mechanics of Safe Harbor. Will the IRS issue additional clarifying guidance, such as FAQs or informational guidance to ensure taxpayers can comply with confidence and what support from Congress would help you deliver that clarity efficiently?”
Frank Bisignano, IRS CEO: “First of all, 100% we were deep in. It would be good to come talk to you about and make sure that for everything you’re thinking about, we understand it and have it covered in that guidance.”
Miller: “Thank you. In regard to digital asset reporting, we expect Form 1099-DA implementation will generate a significant volume of information returns. Many of these may involve regulated payment stablecoins that are designed to maintain a stable value, often resulting in minimal or no economic gain on routine transactions. Compliance is crucial, but it must be practical and strategically focused. As the IRS evaluated whether processing extremely high volumes of low dollar digital asset transactions will materially improve compliance relative to the administration, administrative burden, and what legislative solutions will help the IRS concentrate resources where they deliver the greatest ROI.”
Bisignano: “That analysis is in process right now with some preliminary, but I think we probably got a little more time to really see directly where the sweet spots are and where the issues are.”
Miller: “I really appreciate your time here today, and I know I haven’t been in my seat for that long, but I have to say I am disappointed. You guys need to do a better job of educating the IRS commissioner about the questions that he’s coming here to answer. I mean, I’m very embarrassed right now from my side, and you’re doing the best you can. I know you’re coming into this with an amazing background, and what I’m saying is going to get me in a lot of trouble, but this is unacceptable. You really need to come in here and answer the questions that these members ask you directly and saying, ‘I’ll come see you in your office,’ even to me on very basic questions that I’m asking you, is really upsetting, and I don’t actually think it’s you who’s letting us down. I’m going to look at your team right behind you, because if I was working for a principal, I would never let them walk into a hearing like this if they worked for me.”
What I’m Reading This Week
How Candidates Are Using Winks and Posts to Seek Crypto and A.I. Cash, Shane Goldmacher, The New York Times.
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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