**As the US midterm elections approach, the digital assets industry finds itself at a critical regulatory inflection point. **
Gone are the days of speculative wild-west debates; today, blockchain technology, stablecoins and tokenization are rapidly integrating into the core plumbing of global financial systems.
Despite notable progress, regulatory uncertainty persists. To understand the stakes and specific legislative needs, the Investing News Network gathered commentary from several prominent founders, investors and industry leaders, who shared their perspectives on what the next Congress must prioritize.
For venture capitalists and asset managers, regulatory flip-flops across different administrations create an inhospitable environment for long-term planning.
Utkarsh Ahuja, founder and managing partner at Moon Pursuit Capital, highlights that the debate in Washington has matured, but durability remains the missing ingredient.
“I think we’re past the point where the industry is simply asking Washington to give it rules. There has been real progress, particularly around stablecoins, and the broader conversation in Washington is much more sophisticated than it was a few years ago,” he wrote in comments sent to INN.
“What matters now is making that progress durable. The Clarity Act and the broader push around market structure are important steps in that direction. We need to resolve some of the fundamental questions that have been hanging over the industry for years, particularly around asset classification, the respective roles of the SEC and CFTC, and what regulatory requirements apply as projects and markets mature.
“Founders are building companies on five- and ten-year timelines, and investors are deploying capital on similar horizons. From an investor’s perspective, it is very difficult to make those decisions confidently if fundamental questions around market structure, asset classification or jurisdiction can shift significantly from one administration to the next. Regulatory uncertainty ultimately gets factored into where capital gets deployed.
“I’d like to see the next Congress finish that work and give the market clearer boundaries. That doesn’t mean weakening consumer protection or giving crypto a special set of rules. It means creating a framework where serious companies understand what is expected of them and can build, raise capital and scale accordingly.
“For the US, there’s also a much bigger competitiveness question here. Digital assets are increasingly becoming part of the broader financial infrastructure through stablecoins, tokenization, payments and programmable finance. Capital and talent can move very quickly in this industry, and so can the companies being built around these technologies. The US doesn’t need to be the easiest jurisdiction for crypto, but it should aim to be the most credible and predictable. If Congress gets that balance right and provides durable market structure, I think we’ll see more institutional capital enter the space and a lot of the next generation of digital asset companies choose to build here.”
While macro-level predictability is essential, early-stage startups face immediate operational hurdles. Without clear rules on custody and direct access to payment rails, young fintechs are forced to spend unsustainable portions of their early capital on compliance and legal overhead.
Ryan Kirkley, co-founder and CEO of Global Settlement Network, outlined three highly specific demands that Congress must address to allow builders the space to innovate.
“My ask for the next Congress is specific. First, pass market structure legislation: clear jurisdictional lines between the SEC and CFTC, and durable rules for issuance, custody and settlement of tokenised assets. Ambiguity is a tax on every founder building here.
“Second, create federal regulatory sandboxes so startups can test new settlement infrastructure and tokenised products under supervision — without needing a megabank’s compliance budget on day one.
“Third, keep stablecoin rules workable for new entrants, not just incumbents, and modernise charters and payment-rail access so fintechs can plug into core financial infrastructure directly. Financial infrastructure is being rebuilt globally. The US has the capital, talent and institutions to lead and Congress just has to give builders certainty and room to build."
When crafting legislation, Congress must avoid broad strokes that accidentally crush highly technical and beneficial use cases. In fields like decentralized physical infrastructure networks (DePIN) and energy web applications, treating digital receipts or micro-payments as securities or taxable events under legacy frameworks is practically and economically impossible.
Parth Kapadia, CEO of OpenVPP, discussed the granular, technical fixes required to prevent compliance costs from eclipsing the value of the technology itself.
“First, finish market structure. The Clarity Act has a cloture vote scheduled for September 15, and the House passed its version over a year ago. What we need out of the final text is confirmation that tokenized attributes tied to measured physical performance, things like renewable energy certificates and flexibility credits, sit on the commodity side of the line. These are receipts for verified megawatt-hours. Treating them as securities would put more compliance cost on a settlement than the settlement is worth.
“Second, fix the tax treatment of machine-scale payments. Every de minimis proposal currently moving, including Lummis’s US$300 threshold, carves out property held for income production. A homeowner’s enrolled battery is exactly that. So the one household actually earning crypto-denominated income from physical infrastructure is the one household the exemption does not reach. We need an aggregation rule that treats a year of micro-settlements as a single basis event.
“Third, give non-custodial settlement platforms a federal path. Orchestrating a payment we never hold should not require money transmitter licenses in fifty states. The Genius Act was the hard part, and it is done. The next Congress should build on it rather than reopen it.”
*During an August interview with INN, **Raj Kamal, co-founder of Transfi, said the payments landscape remains highly fragmented, with emerging markets across Asia and Africa facing higher transaction costs and less predictable settlement times than more integrated regions such as Europe. **Listen to the full interview above. *
As the legislative clock ticks, the threat of electoral gridlock looms large. The impending midterms mean that major legislation like the Clarity Act is running out of floor time, creating a holding pattern where massive amounts of institutional capital remain frozen.
Bernardo Brites, co-founder and CEO of Trace Finance, detailed how regulatory delays keep vital capital out of the US economy.
“With midterms coming up, it’s important to note that not every corner of crypto carries the same political risk. Bitcoin’s thesis holds regardless of who’s in Washington; scarcity doesn’t care which party controls Congress. But market structure, stablecoin oversight and the rules governing how issuers and platforms actually operate are a different story entirely, and that’s the part that’s on the line right now.
“At this point, most people tracking the Clarity Act aren’t betting on passage this year; they’re bracing for it to slip. The bill has a procedural vote coming up that’s basically its last realistic shot before the floor time gets consumed by midterm politics, and the honest read is that the odds aren’t good. That’s not a reason to stop pushing, but to recalibrate the strategy.
“What founders want from the next Congress is a market structure framework that connects to what GENIUS already did for stablecoins, as well as access to FedNow and FedWire for compliant payment providers. There is a tremendous amount of capital on the sidelines waiting for regulatory clarity to enter the markets. Every month this stays unresolved is another month that capital sits on the sidelines waiting for a rulebook that was supposedly close to done. The US can only truly cement itself as a leader in digital assets when we have bipartisan support for a clear regulatory framework.”
The reality of the modern digital landscape is that capital and talent are highly mobile. While Congress delays, other major economies are stepping in. Europe’s Markets in Crypto-Assets (MiCA) regulation is already live, while financial hubs like Singapore and Dubai are offering clear, predictable legal environments. Meanwhile, the actual underlying growth of blockchain is being driven by the largest financial institutions.
Alex Witt, a founding general partner at Verda Ventures, cautions that a failure to act quickly could relegate the US to a bystander, holding the plumbing while other nations build the actual products.
“The one thing I’d ask of the next Congress is to finish the Clarity Act - it’s cleared the House with (over 70) Democrats and cleared Senate Banking, and every month it sits on the Senate calendar is another month capital and talent drift to Dubai, Singapore and Europe. The bigger point is that the debate has moved on: stablecoin volume overtook (Automated Clearing House) this year, DTCC is launching tokenized settlement in October with NYSE Composite (INDEXNYSEGIS:NYA), BlackRock (NYSE:BLK) and JPMorgan (NYSE:JPM) in the pilot, and 21 banks just announced their own stablecoin, so Congress is still legislating “crypto” while the growth is now in the banks and payment networks adopting blockchain rails. That means settling the SEC/CFTC line once and for all, writing rules for tokenized securities and 24/7 settlement, and resisting the temptation to make those rules something only a licensed bank can satisfy — otherwise the US ends up with the plumbing and none of the products. Founders aren’t asking for a pro-crypto Congress; they’re asking for a boring, predictable one.”
The consensus among digital asset leaders is clear: the industry is not looking for a “crypto-friendly” Congress that offers special regulatory exemptions or shortcuts. Instead, the mandate is for a professional, “boring” Congress that can resolve jurisdiction, streamline tax treatments for modern technologies, and establish a level playing field.
The upcoming midterms will determine who sits in the legislative seats, but they should not alter the strategic focus. The groundwork has been laid with bills like the Genius Act and the Clarity Act. The next Congress must carry this legislation across the finish line.
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**Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article. **
