regulations

In the span of weeks, Congress floated a sweeping crypto tax overhaul, industry players launched a counterpunch against stablecoin restrictions buried in a major market structure bill.

Key Takeaways
The PARITY Act proposes stablecoin tax exemptions and closes crypto loopholes like wash-sales.Coinbase and allies are pushing back against the CLARITY Act's stablecoin yield restrictions.California's Newsom signed an executive order banning state officials from using insider knowledge to bet on prediction markets.
None of these stories are isolated. Together, they sketch the outlines of what a regulated crypto future in the United States might actually look like - and who stands to lose ground getting there.
The PARITY Act: Rewriting the Crypto Tax Rulebook
Released as a bipartisan discussion draft in late 2025, the Digital Asset PARITY Act takes aim at one of the industry's most persistent complaints: that digital assets are taxed inconsistently and often punitively compared to traditional financial instruments.
The bill's most practical change involves stablecoins. Under the draft, regulated payment stablecoins priced between $0.99 and $1.01 would not trigger capital gains tax. Transactions under $200 would be exempt from both tax and reporting requirements. The logic: if it behaves like a dollar, tax it like one.
The bill also extends wash-sale rules to digital assets for the first time, closing a loophole that stock investors haven't had access to in decades. Miners and stakers facing "phantom income" on unrealized rewards would gain an elective deferral framework, postponing taxation up to five years or until the asset is sold.
Industry groups like the Digital Chamber have backed the bill as a step toward keeping digital asset activity within U.S. borders. Critics, including the Bitcoin Policy Institute, argue the de minimis exemption should extend to Bitcoin, not just stablecoins. More structurally, the bill's tax benefits are contingent on stablecoins being issued under the GENIUS Act - separate legislation that hasn't passed. The PARITY Act's full effect is, in part, hostage to legislative progress it cannot control.
If it passes close to its current form, this would be the most significant structural change to crypto taxation since the asset class emerged. If stablecoin legislation stalls, key provisions may remain in legal limbo regardless.
The CLARITY Act: Industry Draws a Line on Stablecoin Yields
The more immediate battleground is the CLARITY Act, a wide-ranging market structure bill moving through the Senate. The friction centers on stablecoin yield - features that allow users to earn returns on stablecoin holdings, functioning similarly to interest-bearing accounts. Proposed Senate language would restrict these arrangements in ways the industry argues would kill the product for retail users.
Coinbase's Global Head of Investment Research, David Duong, stated publicly that the parameters would leave everyday crypto users worse off. The company, alongside other stakeholders, is coordinating a formal counterproposal targeting the specific language rather than opposing the bill outright.
The timeline is tight. Legislative text is expected by late March or early April 2026. Duong indicated roughly three weeks to resolve the dispute - and warned that if no compromise lands within about six weeks, the bill risks slipping to 2027.
That would mean another year of regulatory ambiguity for institutional players who have been waiting on defined rules before committing capital at scale. This is not a theoretical risk. Duong has described 2026 as the year crypto transitions from niche to global financial infrastructure - but that depends on policy frameworks arriving on schedule.
The industry's willingness to publicly flag problems while pursuing compromise rather than outright opposition reflects a more sophisticated lobbying posture than was common even two years ago. Whether it actually delivers results, or gets outrun by the political calendar, remains to be seen.
Crackdown on Prediction Markets
According to a report from Politico, California Governor Gavin Newsom signed an executive order prohibiting state officials and their close associates from using non-public government information to bet on platforms like Polymarket and Kalshi. It took effect immediately.
The triggers were specific. In January 2026, an anonymous trader reportedly earned over $400,000 on Polymarket by betting on Venezuelan leader Nicolás Maduro's ouster just hours before it happened. Newsom's office also cited six suspected insiders who allegedly profited from markets tied to U.S. military strikes on Iran.
The broader context explains the urgency. Monthly trading volumes across Polymarket and Kalshi exceeded $20 billion combined in March 2026 for the first time. Total prediction market spending in 2025 reportedly reached nearly $64 billion. That kind of volume turns privileged government access into a serious financial weapon.
Federal action is accelerating alongside California's move. The BETS OFF Act would ban markets on topics like war and death. The PREDICT Act would bar the President and members of Congress from betting on prediction markets entirely. A bipartisan Senate bill introduced March 26 would require all government employees to disclose prediction market activity. The CFTC separately asserted its authority to police insider trading on regulated platforms in February.
The prediction market industry isn't being targeted because it lost political favor. It's being targeted because it grew fast enough that the absence of specific rules became a visible, documented problem.
#regulations

A review from the UK has just been released urging a temporary halt (moratorium) on political donations in the form of digital assets. The reason? Closing loopholes for dark money under £500. 🇬🇧🛡️
This is a strong signal that cryptocurrency adoption at the national level will become stricter regarding transparency. As investors, we must be aware of regulations like this!
I have just reviewed the technical details and their impact on the market in the InfoCepat87 blog. 🔍
What is being discussed:
✅ Reasons for the donation moratorium.
✅ Impact on local exchanges.

The cryptocurrency industry, once a symbol of progress and innovation, now finds itself in a precarious situation. The American judicial environment, supposed to be a pillar of justice and innovation, paradoxically becomes a hindrance for a sector thriving on the verge of financial and technological innovations.
Innovation in Conflict with Regulations
The cryptosphere, celebrated as the future of the internet, faces serious challenges in the form of regulatory hurdles. The SEC and other regulators seek to apply outdated regulations to the rapidly evolving crypto ecosystem, hindering innovation and complicating the existence of the entire industry.
Regulatory Uniformity and Challenges for the Cryptocurrency Industry
The SEC and similar bodies attempt to impose uniform regulatory frameworks on diverse aspects of the crypto ecosystem, leading to the suppression of innovation and ignoring the need for adaptive regulatory approaches. As a result, the cryptocurrency industry must grapple with unclear regulatory guidance and constant legal disputes.
Battle for Fundamental Rights and Privacy
Legal disputes with cryptocurrency giants like Binance, Coinbase, and Kraken, as well as initiatives like the Crypto Freedom Alliance, highlight important questions regarding constitutional rights and principles of privacy in the world of cryptocurrencies.
Legislative Hurdles and Future Challenges
Legislative proposals that would extend the obligations arising from banking secrecy laws to digital wallets and miners could significantly impact the future of the cryptocurrency industry by burdening innovation with compliance.
A World Bound by Regulatory Shackles
The parallel between a potentially regulation-bound internet and the current state of the cryptocurrency industry serves as a warning of the negative consequences of excessive legislative activity. A diverse spectrum of actors in the crypto ecosystem, from developers to artists, faces the risk of loss in an environment where innovation encounters more rejection than support.
Irony in Regulatory Efforts
It seems that institutions meant to support innovation and protect individuals are on the verge of becoming a hindrance to progress. Proposed legislation under the guise of national security protection harbors potential risks for the development of the cryptocurrency industry, whose technology brings opportunities for economic and technological advancement.
#crypto #regulations

Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“

#regulations
By eliminating “reputational risk” from its supervisory framework, the Federal Reserve is dismantling a long-criticized barrier that has quietly shaped, and often stifled, crypto-bank relationships in the U.S.
The United States Federal Reserve has removed “reputational risk” from its supervisory framework for banks, a decision that could reshape how financial institutions engage with the crypto sector.
In a policy update released Monday, the Fed said it will now focus on more specific financial risk discussions instead of the vague and often criticized reputational risk metric.
For years, crypto firms have argued that reputational risk has been used as a vague and unfair justification to block or sever banking relationships with crypto firms, contributing to what many referred to as “debanking."

With the change, banks may now find it easier to do business with digital asset companies without fear of supervisory pushback.
Fed Clarifies Banks Risk Ratings, Dropping Barrier Long Blamed for Crypto Exclusion
The policy shift may ease access to financial services for companies operating in the digital asset space, many of which have faced challenges in maintaining banking ties over the past several years.
“This is a win, but there is still more work to be done,” said U.S. Senator Cynthia Lummis in response to the announcement.
Lummis, a pro-crypto lawmaker from Wyoming, has been vocal about the need for regulatory clarity in the crypto space and has criticized what she called the “assassination” of digital asset businesses in the U.S. through aggressive regulatory practices.

According to the Federal Reserve, the removal of reputational risk is meant to clarify how examiners evaluate a bank’s risk management practices.
The updated guidance emphasizes that the formal rating will now reflect both quantitative and qualitative elements tied directly to financial performance and safety.
“This change does not alter the Board’s expectation that banks maintain strong risk management,” the Fed said, adding that the adjustment is not meant to prevent banks from using the concept of reputational risk in their own internal assessments.
Historically, reputational risk was defined by the Fed as the possibility that negative publicity, true or not, could lead to customer losses, litigation, or a drop in revenue.
Critics in the crypto industry have long argued that the term was too broad and too subjective, allowing regulators to apply inconsistent standards, especially when it came to digital assets.
Fed Ends ‘Operation Chokepoint 2.0’ Tactics with Reputational Risk Reform
The decision comes after years of what some have described as “Operation Chokepoint 2.0,” a period during which more than 30 crypto and fintech firms reported being cut off from banking services.
Rob Nichols, president of the American Bankers Association, welcomed the change. “The supervisory process will now be more transparent and consistent,” he said.
“We have long believed banks should be able to make business decisions based on prudent risk management and the free market, not the individual perspectives of regulators,” he added.
The Fed has already begun reviewing and removing references to reputational risk from its guidance materials. It is also planning to train examiners on the new framework and coordinate with other federal banking regulators to ensure consistent application.
The removal of reputational risk references will be done gradually as existing guidance is updated.
Although banks are still required to manage risks in line with existing regulations, the shift could provide relief for crypto firms seeking stable banking relationships in the U.S.
It also follows a broader trend of regulatory recalibration, as several federal agencies appear to be easing crypto-related restrictions introduced in previous years.
The crypto industry scored several wins in recent months as federal regulators eased long-standing banking barriers.
The FDIC removed “reputational risk” from its bank oversight criteria, following the Senate Banking Committee’s approval of the FIRM Act. In May, the OCC confirmed banks can handle crypto trading and delegate services.
The FDIC also greenlit crypto activities without prior approval. On June 17, the Senate passed the GENIUS Act, focused on stablecoin regulation, with strong bipartisan support.
The bill now heads to the House, potentially cementing the first comprehensive US crypto framework.
Still, some observers warn the change could reduce oversight and open the door to riskier bank behavior if not properly monitored. But for the digital asset industry, the removal of reputational risk marks a moment of progress after years of regulatory uncertainty.

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#regulations
There has been a sharp increase in discussion among cryptocurrency enthusiasts following the passage of President Donald Trump’s “One Big Beautiful Bill” in the Senate.

Analytics platform Santiment has reported a significant increase in the volume of discussions containing the words “big,” “beautiful,” and “bill.” This indicates that traders are actively linking the crypto market outlook to potential policy changes brought about by the law.
While the legislation does not contain any direct provisions on cryptocurrencies , Santiment notes that many traders are positioning for indirect effects . These include widespread tax cuts and consumer stimulus that could fuel a “risk-on” sentiment favorable to Bitcoin and altcoins.
Devaluation incentives attract miners
One of the lesser-discussed, but potentially bullish aspects of Bitcoin mining is the return of 100% accelerated depreciation , which allows companies to immediately deduct mining equipment purchases, thus incentivizing rapid ASIC adoption and potentially increasing Bitcoin’s hash rate.
Historically, higher hash rates are associated with bull cycles , particularly during periods of monetary expansion. The report notes that if a looser fiscal policy intersects with an increase in M2 money supply, crypto assets could benefit from an upward push.
Despite the general optimism, Santiment also notes some disappointment over the failure to include Senator Cynthia Lummis’s proposed amendment, which aimed to clarify tax issues around staking, mining, and microtransactions, an issue the industry had been pushing for over the weekend.

“Sell on the rumor, buy on the news”
Analysis of social metrics suggests that while the Senate passage of the bill has not yet translated into strong price gains for Bitcoin or major altcoins, the overall mood has shifted to cautious optimism , consistent with the “sell on rumor, buy on news” behavior often observed in crypto markets.
The ongoing legislative process should continue to influence cryptocurrency market sentiment, depending on the evolution of political negotiations, particularly regarding the potential impact on fiscal spending, Treasury markets, and the Federal Reserve’s liquidity actions.
While there are no direct wins for the crypto sector in the Senate-approved bill, the broader implications of consumer liquidity , policy volatility , and the interplay between fiscal and monetary policy will remain key elements to monitor for traders looking to position themselves around the “Big Beautiful Bill” narrative in the weeks ahead.

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