The future of cryptocurrency in the United States remains a subject of intense debate. Finance professor Marco Di Maggio, who teaches at Imperial College London and was previously the Ogunlesi Family associate professor of business administration and the director of Harvard Business School’s Fintech, Crypto, and Web3 Lab, believes that the crypto industry is at a crossroads. The regulatory decisions made in the coming months and years will shape the extent to which cryptocurrencies influence the U.S. economy.
“In the next couple of years, we are going to see more and more of an integration between traditional financial markets and the underlying technology of blockchain—including more than just cryptocurrencies,” Di Maggio says. (“Blockchains,” or digital ledger technologies [DLT], are used to record and verify transactions, including anonymous transactions, across a network of computers. Blockchain ledgers are highly secure public ledgers, and the data on a blockchain are permanent and theoretically unalterable. In practice, each transaction associated with a particular DLT is entered into a network, validated, and then added to a “block.” This block is sent to all computers in the network, validated again, and finalized as a link within the larger “blockchain.” These blockchains are then the ledgers used for cryptocurrency exchanges).
Blockchain’s applications go beyond digital currencies like crypto that store value and can be exchanged, however. Ethereum (ETH), a programmable blockchain and “altcoin” (any cryptocurrency separate from Bitcoin, or BTC) enables innovations like smart contracts, decentralized finance (DeFi), and non-fungible tokens (NFTs). “Even traditional financial markets, which have been conservative in the past,” Di Maggio says, “are embracing blockchain technology.” Major institutions like Blackrock are already incorporating blockchain into their operations, including by tokenizing real-world assets such as cash and treasury bills on blockchain platforms, and by creating and managing exchange-traded funds (ETFs) that invest in cryptocurrencies such as Bitcoin, allowing institutional investors to access the crypto market in funds.
This rapid growth has created challenges, however, including security concerns and market manipulation. The crypto industry has experienced major crises, such as Sam Bankman-Fried’s FTX scam in 2022, in which billions of dollars were defrauded from customers. Large crypto holders, known as “whales,” have the power to significantly influence prices, potentially harming newer, smaller investors. The lack of regulation and potential for anonymity create continuing opportunities for fraud and insider trading.
The Push-Pull of Government Intervention
Di Maggio calls the current system in the United States “enforcement-based regulation”—in other words, regulators impose fines without offering a workable compliance path. This also allows certain players to benefit while others fall through the cracks, and leads to a tremendous amount of uncertainty. “One day, the chairman of the S.E.C.,” says Di Maggio, “could wake up and say, ‘What I thought was legal until yesterday, today is not anymore.’” This is exactly what has begun to happen has of February 2025.
The administration under former President Joe Biden had previously acted under Di Maggio's “enforcement-based regulation” model, led largely by former Securities and Exchange Commission (S.E.C.) Chair Gary Gensler. In May 2024, Biden also notably vetoed a bipartisan attempt to roll back the S.E.C.'s requirement that companies holding cryptocurrency for customers list those assets as liabilities—essentially marking them as potential risks—on their financial statements. Biden argued that this was a necessary precaution because crypto markets are highly volatile, with prices often driven by anything from macroeconomic trends to social-media hype. Although “volatility is part of the DNA of this industry because it’s so early on,” says Di Maggio, regulatory clarity should reduce some of that volatility. However, just days into his second term, President Donald J. Trump’s administration swiftly reversed the rule, opening the door for a dramatic shift in the regulation of digital assets.
Indeed, President Trump, who once called Bitcoin a “Scam against the dollar,” ran on a pro-crypto stance for the 2024 election and called the U.S. the future “crypto capital of the world.” In January 2025, Trump signed an executive order entitled “Strengthening American Leadership in Digital Financial Technology,” emphasizing the “importance of digital assets in U.S. innovation and economic development.” This order was also promised to “provide regulatory clarity and certainty built on technology-neutral regulations, frameworks that account for emerging technologies, transparent decision making, and well-defined jurisdictional regulatory boundaries.”
“On day one, I will fire Gary Gensler,” said Trump in a fiery address at the Bitcoin 2024 conference in Nashville, Tennessee last summer. Gensler was Public Enemy No. 1 according to many in the crypto industry. Beginning in 2023, he'd initiated a series of legal battles against major crypto exchange platforms including Coinbase, the largest exchange in the United States. These suits were based on the classification of cryptocurrencies as tradeable securities in financial markets.
Unlike traditional markets for stocks and bonds on Wall Street, where exchanges, brokers, and custodians have distinct roles, crypto exchanges combine the roles of buying, selling, and safekeeping. However, existing U.S. laws prohibit exchanges from performing all three functions; this means that there is no clear way for cryptocurrencies to be classified as securities and traded legally as exchanges currently operate. Because the digital currencies sold on Coinbase and several other platforms were deemed unregistered securities, they were ruled illegal, exposing investors to a high risk of financial harm. Gensler used the 1946 Supreme Court case of SEC v. Howey Co., which gave birth to the Howey Test, to argue these cases. “If you want [crypto] to be a security,” Di Maggio says, “you should have a framework that allows the operator to formally request [an asset] be deemed a security” and then allow those securities to be traded on approved platforms.
In a complete reversal of this precedent, on February 21, the S.E.C. determined it would to drop its lawsuit against Coinbase, and top executives at the crypto firms Gemini, OpenSea and Uniswap Labs announced halts in the investigations at their companies. This was led by new S.E.C. Chair, Mark T. Uyeda, who took his position in January and launched a “crypto task force” shortly after his appointment, designed to create a “comprehensive and clear regulatory framework for crypto assets,” including assessing the status of cryptocurrencies under securities laws. (Trump received millions in campaign financing from platforms including Coinbase.)
With a second potentially landmark move for the coming future of crypto regulation, the S.E.C. declared on February 27 that meme coins—which it defined as “inspired by internet memes, characters, current events, or trends for which the promoter seeks to attract an enthusiastic online community to purchase the meme coin and engage in its trading”—are not securities. It did so using the same 1946 Supreme Court case that Gensler used for the opposite interpretation. Trump’s family now operates a crypto company that sells meme coins: $TRUMP, which began circulating pre-inauguration, and reportedly led to losses of $2 billion combined for 810,000 retail investors as $TRUMP prices swung extremely unpredictably in value throughout the election cycle.
A U.S. Strategic Reserve for Cryptocurrency
Trump's campaign platform included discussions of a “$20 billion bitcoin reserve,” separate from the potential inclusion of digital assets in the newly planned Sovereign Wealth Fund. On March 2, Trump announced on his social media platform Truth Social that the U.S. Strategic Crypto Reserve would include XRP, Solana (SOL), Cardano (ADA), and Ethereum (ETH)—all altcoins—alongside Bitcoin (BTC). Critics argue that including altcoins, which are more volatile than Bitcoin, may mislead investors and shift attention away from Bitcoin’s established role as a store of value, which has positioned the cryptocurrency as a potential successor to gold. Coinbase CEO Brian Armstrong notes that Bitcoin’s lower volatility makes it the most secure choice for a national reserve. On the other hand, supporters, including Ripple CEO Brad Garlinghouse, argue that “crypto maximalism”—the belief that Bitcoin should dominate all other altcoins—could limit industry progress, and that diversifying assets would better align with the reserve’s goals.
The initiative for a U.S. Strategic Crypto Reserve marks a turning point in American policy toward cryptocurrency, potentially serving as a hedge against inflation and instability while strengthening U.S. dominance in digital assets. It could also drive industry growth and innovation, though investors and firms will need clearer regulations on trading, as Di Maggio argues. Unlike Trump's broader deregulatory approach to crypto-as-securities suits, this push for government-backed digital asset integration signals a shift toward structured regulation, particularly for U.S. financial security. The upcoming White House Crypto Summit on March 7 will likely lay out more details for the next chapter of blockchain in the United States.
Crypto-Specific Financial Regulations
Existing federal financial regulations, such as the Securities Act of 1933 and Securities Exchange Act of 1934, were crafted for a vastly different financial landscape—as is seen by their variable application and interpretation by S.E.C. chairs Gensler and Uyeda in determining crypto assets as securities. They not only fail to address the challenges posed by emerging industries like crypto, but they evidently can be applied with differing outcomes for differing political aims. “We need a new set of rules for an industry that didn’t exist 100 years ago,” says Di Maggio, who argues that a clear, predictable regulatory framework for cryptocurrencies would be a “pro-business stance,” not anti-business: it would ensure that there's less variability in case-by-case determinations of legality across assets, and protect investors at all levels.
