May 25: This week in crypto federal policy
DC Decentralized: A weekly newsletter on developments in digital asset and blockchain federal policy
This week decoded
The Federal Reserve Board has requested public comment on a proposal to establish payment accounts, sometimes referred to as “skinny” master accounts, that would broaden access to the central bank’s core payments infrastructure. The proposal would allow a wider range of financial institutions, including payment and crypto companies, to access these systems directly. President Donald Trump signed an executive order formally directing the Federal Reserve to explore the creation of such accounts.
When Congress returns from the Memorial Day recess, lawmakers will enter a compressed legislative window ahead of the July 4th and August recesses. The CLARITY Act is among several high-priority items competing for limited floor time, and Republican negotiators have not yet reached agreement on the ethics provisions sought by some Democrats.
Meanwhile, the House Ways and Means Committee convened another closed-door bipartisan roundtable on crypto tax policy. Chairman Jason Smith (R-MO) has reiterated his goal of advancing a bipartisan bill through the House this year. However, committee Democrats continue to emphasize that substantially more member education is needed before meaningful legislative negotiations can move forward.
Read more below
Congress
Hearings
Last week
On May 19, the House Select Strategic Competition Between the United States and the Chinese Communist Party Committee held a hearing on “Crime, Corruption, and Power: The Rise of CCP-linked Scam Networks Targeting Americans and Threatening U.S. Security.”
On May 20, the House Financial Services Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee held a hearing on “Partnering for Innovation: How Bank-Fintech Collaborations Enhance Financial Infrastructure.”
On May 21, the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions held a hearing on “Modernizing the BSA for Financial Crime in the 21st Century.”
Legislation
Reps. Max Miller (R-OH) and Steven Horsford (D-NV), along with co-sponsors Reps. Mike Carey (R-OH) and Suzan DelBene (D-WA), introduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (Digital Asset PARITY) Act to update the U.S. federal tax code for digital assets. (Text)
Reps. Nick Begich (R-AK) and Jared Golden (D-ME) introduced the American Reserve Modernization Act of 2026 (ARMA) to establish a Strategic Bitcoin Reserve and modernize how the United States manages digital reserve assets. (Press release)
Correspondence
Sen. Lisa Blunt Rochester (D-DE) sent a letter to the Federal Reserve Board of Governors requesting information regarding the decision to grant a limited-purpose Federal Reserve master account to Kraken Financial. The letter raises concerns that the approval appears to have occurred before the Federal Reserve finalized a broader policy framework governing such accounts. (Letter)
Senate Banking, Housing, and Urban Affairs Committee Ranking Member Elizabeth Warren (D-MA) sent a letter to Comptroller of the Currency Jonathan Gould, raising concerns over his decision to grant national trust charters to companies that do not qualify under the National Bank Act and requesting the full charter application for all nine approved companies, legal analyses supporting the OCC’s decisions, and all communications between OCC officials and the White House or Trump family members regarding the charter approvals by June 1, 2026. (Letter)
Publications and Events
The Government Accountability Office (GAO) released a report on Privacy-Enhancing Technologies (PETs). (Report)
Trump Administration
White House
The President issued an executive order on Integrating Financial Technology Innovation into Regulatory Frameworks directing federal financial regulators to modernize their rules to better accommodate fintech and digital assets, and asking the Federal Reserve to consider broader access for non‑bank firms to Fed payment services. (Executive Order)
Federal Reserve Board
The Federal Reserve Board requested public comment on a proposal to establish a “payment account,” also referred to as “skinny” master accounts, to open up the central bank’s foundational payments system to a wider range of financial institutions, including payment companies and crypto firms. The proposed payment account is substantially similar to the prototype outlined in the Board’s request for information issued in December 2025. Payment account holders would not have access to intraday credit or the discount window, would not earn interest on balances held at a Reserve Bank, and would only have access to payment services with automated controls to prevent overdrafts. The proposal would not expand or otherwise change legal eligibility for access to accounts or payments services from the Federal Reserve, and affirms that Reserve Banks would expect payment account holders to mitigate illicit finance risks. (Federal Register)(Press release)
Securities and Exchange Commission (SEC)
Commissioner Hester Peirce will depart the SEC to join Regent University’s law school in November. (Statement)
Noteworthy Quotes and Events
ADMINISTRATION
Securities and Exchange Commission (SEC)
SEC Commissioner Hester Peirce posted “I appreciate the interest in--but not the hyperbole about--the contemplated innovation exemption for the onchain trading of tokenized NMS stock. Keep in mind: I’ve always expected that it’d be limited in scope & would facilitate trading only of digital representations of the same underlying equity security that an investor could purchase in the secondary market today, not synthetics. If people want to understand what synthetics mean to me in this context, see the staff statement on tokenization, which distinguishes tokenized versions of issuer-sponsored stocks and of stocks that SEC-registered firms hold for their customers from synthetic instruments that provide exposure to stocks.”
CONGRESS
House Democratic Tax Writers’ Views on Digital Asset Tax Legislation
On the slow pace of digital asset tax legislation and the need for more education for tax writers, Rep. John Larson (D-CT) said, “There seems to be a rush towards something that I’m not completely certain that I totally grasp all the liabilities.” (Punchbowl)
Rep. Don Beyer (D-VA) said, “It’s the wild west out there. As long as it’s the wild west, it’s hard to understand how we’re going to do meaningful tax law. We should try.” (Punchbowl)
Rep. Brad Schneider (D-IL) said, “We aren’t even at the game yet.” (Punchbowl)
Rep. Brendan Boyle (D-PA) “This is something where the details really matter. Because there’s a right way to go about regulation and there’s a wrong way to go about it.” (Punchbowl)
Rep. Steven Horsford (D-NV) said, “It’s important that we modernize our tax code in order to keep up with it.” (Punchbowl)
Ethics Language in CLARITY Act
Sen. Cynthia Lummis (R-WY) said, “You can’t prevent adult children of members of Congress, or the president or vice president, from engaging in legitimate businesses. There’s no way to capture adult children.” (Punchbowl)
Sen. Ruben Gallego (D-AZ) said, “Hard to cover any family, actually, just to be clear. What we’re negotiating is to make sure that the president is covered, and to whatever extent he is involved with — whether it’s a family or a business or anything else like that — that would also be covered.” (Punchbowl)
Miscellaneous
On sponsoring the SAFE Crypto Act, Senate Finance Committee Chair Mike Crapo (R-ID) said, “Cryptocurrency scams accounted for roughly half of all cybercrime losses last year in the United States. This alarming trend underscores the need for better protections for Americans. The SAFE Crypto Act would establish a much-needed taskforce to strengthen collaboration among law enforcement and financial regulators, helping safeguard consumers from this growing threat.” (Press release)
Senate Banking Chair Tim Scott (R-SC) posted “Financial innovation should work for, not against, everyday Americans. Stablecoins and digital assets have the potential to modernize our financial system, expand access to commerce around the world, and keep America leading in the future of finance!”
Sen. Cynthia Lummis (R-WY) released a statement on the President’s Executive Order expanding access to Federal Reserve Master Accounts for digital asset companies, “This Executive Order puts the Federal Reserve on notice that it must follow the law and provide equal access to the payments system for all eligible fintech companies. For years, Fintech has been shut out while legacy institutions enjoyed privileged access, and the Trump administration is ensuring a level playing field, competition, and lower payments costs for consumers. American innovation cannot wait on bureaucratic inertia, and President Trump is making sure it does not have to.” (Press release)
Lummis posted “Wyoming didn’t wait for Washington to figure out digital assets. We built the framework ourselves. I didn’t come to the U.S. Senate to slow that down, I came here to scale it—and that’s exactly what my bill, the Clarity Act, does.
Lummis also posted “I’ve sat through years of hearings, negotiations, and rewrites to get the Clarity Act to this point, and the reason is simple: American consumers and industry deserve a real framework, not regulatory limbo.
Lummis also posted “Credit Unions are embracing digital assets and know that they can now offer a wider array of services and opportunities to their members. It’s the future!”Sen. Jon Husted (R-OH) posted “Ohioans deserve a government that works smarter and costs less. Giving people the option to pay for state services with digital assets is common sense — it puts more choices in the hands of taxpayers, cuts unnecessary costs, and positions Ohio as a leader in the 21st-century economy. I applaud OhioTreasurer for his leadership on this. Ohio has always led the way, and initiatives like this that are forward-thinking are exactly why.”
Rep. Pat Harrigan (R-NC) posted “Proud to be one of those cosponsors. Just as gold reserves anchored American financial security for generations, a Strategic Bitcoin Reserve positions the United States at the forefront of 21st century finance and out of reach of our adversaries.”
Rep. Sylvia Garcia (D-TX) posted “During today’s hearing before the Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, I pushed for financial innovation that helps working families get ahead, not leave underserved and underbanked communities behind. Innovation should expand opportunity, not deepen inequality.”
Sen. Dave McCormick (R-PA) posted “The CLARITY Act is on a path to the president’s desk this summer. Kevin Warsh is about to bring a new day to the federalreserve. Republicans are laying the groundwork for America’s financial future.”
House Committee on Agriculture posted “ONE WEEK OUT: Last Thursday, BankingGOP advanced the CLARITY Act out of committee, following in the footsteps of the House Committee on Agriculture, FinancialCmte, and SenateAgGOP. The digital asset landscape needs certainty and clear rules of the road. It’s time to get this landmark bill to President Trump’s desk.”
Sen. Elizabeth Warren (D-MA) said, “I’m not often on the same side as the big banks, but when crypto billionaires want all the privileges of being a bank without any of the rules, that’s a threat everyone should be worried about.” (Politico)
In floor remarks, Rep. Ryan Mackenzie (R-PA) said, “Mr. Speaker, I rise today to recognize officer Hunter Stromme of Bethlehem Police Department for his commitment to protecting members of our community while off duty at a local gas station. Officer Stromme noticed an elderly woman who appeared distressed while speaking on the phone near a bitcoin machine. Trusting his instincts and recognizing signs of a potential cryptocurrency scam, he stepped in to check on her well-being. Because of his quick thinking, Officer Stromme was able to stop the victim from sending additional money to scammers and help prevent further financial loss. He then ensured that the incident was properly documented and that the individual received assistance. Officer Stromme’s actions serve as a reminder that protecting and serving is more than a profession. It is a commitment that extends far beyond the badge and beyond the call of duty. As a member of the bipartisan stop scams caucus, I know how important it is to raise awareness and protect our communities from increasingly sophisticated scams that target vulnerable individuals. I commend Officer Stromme for his dedication to keeping the people of the Lehigh Valley and Poconos safe.”
What I’m Reading This Week
What Happens When the Wash Sale Rule Meets Crypto?, Marie Sapirie, Tax Notes.
How Prediction Markets and Crypto Firms Steamrolled a Watchdog Agency, Sharon LaFraniere and David Yaffe-Bellany, 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.
Contact us at Stacey@ZeroOneStrategies.com
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