Trends in the Development of Cryptocurrency Assets in the United States and Their Implications for Our Country

Author: Yang Tao, Deputy Director of the National Finance and Development Laboratory

Trends in the Development of Cryptocurrency Assets in the United States and Their Implications for Our Country

Currently, with the Trump administration in the United States promoting adjustments and shifts in policies related to crypto assets, as well as the implementation of the EU's Markets in Crypto-Assets Regulation (MiCA), the global crypto asset market is beginning to face more complex trends and challenges. The regulation of crypto assets in various countries also urgently needs to reassess the balance between their value and security.

The Concept and Boundaries of Cryptographic Assets

Since Satoshi Nakamoto released the "Bitcoin White Paper" in 2008, cryptocurrencies have gradually attracted widespread attention from both academia and industry. Early focus on cryptocurrencies centered around their payment functionality, with "account-based" and "value-based (token-based)" emerging as two distinctly different evolutionary paths. The former is broadly compatible with traditional regulatory mechanisms, emphasizing identity verification, while the latter primarily revolves around value "anti-counterfeiting" and "real transfer," making it difficult to simply cover using traditional payment regulatory methods.

Since then, with the rapid iteration of distributed technology and the increasingly complex ecosystem of participants, the crypto-financial system under the Web3.0 context has become dazzling and is better described using the concept of crypto assets. Among them, a very small number of assets have strong monetary attributes and can be referred to as cryptocurrencies, while more are assets with lower liquidity, whose monetary functions, including payment, are not obvious.

In terms of crypto assets, we believe that it narrowly includes four aspects: First, cryptocurrencies represented by Bitcoin, which are based on public chains, mainly used for asset reserves; Second, stablecoins represented by Tether (USDT), USDC, etc., mainly used for payments; Third, cryptocurrencies represented by Ethereum (ETH) and SOL, which can innovate functions based on Ethereum or Solana's smart contracts, forming various decentralized financial assets and forms (DeFi or PayFi); Fourth, security token offerings (STO) and the tokenization of real assets (RWA), which mainly refers to the tokenization of compliant assets in the real financial market, including equity, debt, notes, etc.

From a broad perspective, it may encompass three aspects: first, various types of non-standardized relevant asset projects in the Web3.0 space, such as non-fungible tokens (NFTs), social finance (SocialFi), decentralized identity and data ownership (DID), decentralized autonomous organizations (DAO), decentralized physical infrastructure networks (DePIN), etc.; second, financial products designed based on crypto assets, such as ETF products issued with Bitcoin, Ethereum, and their pegged assets as the core, which belong to derivative assets of crypto assets; third, CBDCs piloted by various countries' central banks, or blockchain innovation projects by international organizations (such as the BIS's Agora global cross-border payment system plan), although it is uncertain whether they utilize blockchain technology.

In addition, there are two types of controversial digital assets that, strictly speaking, cannot be classified as cryptocurrency, yet are quite popular in certain circumstances: first, meme coins created based on internet culture, jokes, or memes, which usually originate from community entertainment and do not have practical functions or technological innovations; second, scam coins that have no actual application scenarios, technological innovations, or clear value, often associated with fraud and illegal fundraising.

The driving forces behind the evolution of U.S. cryptocurrency asset policy

Firstly, the economic interests of the Trump family have become an important consideration. Until August 2021, Trump stated in a media interview that cryptocurrency could be a "disaster waiting to happen." At the end of 2021, his wife Melania Trump launched the NFT series "Melania's Vision" based on the Solana blockchain for the first time. In December 2022, Trump introduced the NFT series "Trump Digital Trading Card" based on the Polygon blockchain. In September 2023, Trump and his family officially launched World Liberty Financial (WLFI) on the Aave V3 platform on the Ethereum mainnet, which is also a DeFi platform supporting crypto asset lending and investment; on March 25, 2025, WLFI will launch a stablecoin called USD1, which is pegged to the US dollar, and its circulating market value has exceeded $2.1 billion. In addition, in January 2025, Trump launched the TRUMP coin, and his wife subsequently launched the MELANIA coin, both of which are meme coins. Given the increasing interests of their family in crypto assets, in early May 2025, Democratic senators in the U.S. Senate proposed the "Ending Crypto Corruption Act," aimed at prohibiting federal officials and their families from issuing digital assets.

Secondly, Trump has received widespread support and donations from the crypto asset community in the election, using this as an important channel to attract young people. According to data from the Federal Election Commission (FEC), political action committees (PACs) related to the cryptocurrency industry and other organizations supporting the industry have raised over $245 million for the 2024 election, focusing on supporting pro-crypto political forces. At the same time, a significant proportion of young voters, who typically have lower turnout rates, own or are concerned about crypto assets, which may also make them potential supporters of Trump.

Third, there are fundamental differences between the financial regulatory approaches of the Republican Party, where Trump is, and the Democratic Party. Since the Dodd-Frank Act was released in 2010 under Obama's leadership, the Democratic regulatory logic has been based on the principle of protecting financial consumers, imposing "tight constraints" on various financial innovations. In contrast, the Republican Party is completely opposed to the three core aspects of this act: expanding the powers of regulatory agencies, establishing a Consumer Financial Protection Bureau, and adopting the "Volcker Rule." Trump further relaxed regulations on small and medium-sized banks in 2018 through the Economic Growth, Regulatory Relief, and Consumer Protection Act. Clearly, the decentralized architecture model claimed by crypto assets aligns with the Republican Party's philosophy of deregulation and emphasizing market freedom.

Fourth, current stablecoins are primarily dominated by fiat-backed stablecoins, with the US dollar stablecoin becoming the core accounting unit. According to data from Artemis Terminal, as of May 7, 2025, the total supply of stablecoins reached $234.9 billion. Among them, the typical US dollar stablecoin USDT accounts for $150.8 billion and USDC for $59.4 billion. Additionally, a report from Bitwise indicates that the total transaction volume of global stablecoins will reach $14 trillion in 2024. As the US dollar stablecoin is pegged to the US dollar at a 1:1 ratio and corresponds to a 100% US dollar asset reserve, this may actually assist in solidifying the position of the US dollar, rather than challenging its image as was once the case with digital currencies.

The cryptocurrency asset industry has become an important source of revenue for the U.S. government. According to statistics, the fines imposed by the U.S. SEC for cryptocurrency enforcement reached $4.7 billion in 2024, compared to only $150.3 million in the fiscal year 2023, a year-on-year increase of over 30 times. In December 2024, the IRS released the final version of new tax reporting regulations for cryptocurrency brokers, requiring them to report users' tax information in detail. Although entering 2025, Trump began to promote tax relief policies for the cryptocurrency asset industry, leading the Senate to veto IRS-related regulations, based on his vision of a "global cryptocurrency capital," it is still hoped to attract capital from the cryptocurrency world to the U.S. by creating relatively free market conditions, indirectly increasing related economic vitality and revenue, and achieving goals such as alleviating government debt and strengthening the status of the dollar.

Key Points and Substance of U.S. Cryptocurrency Asset Policy

Cryptocurrency Reserves

On March 6, 2025, U.S. President Trump signed an executive order titled "Establishing a Strategic Bitcoin Reserve and U.S. Digital Asset Reserve," emphasizing: First, the "Strategic Bitcoin Reserve" will be managed by the Treasury Department, responsible for incorporating Bitcoin involved in criminal or civil asset forfeiture proceedings, and Bitcoin deposited in the reserve will not be sold again; second, the "U.S. Digital Asset Reserve" will also be managed by the Treasury Department, primarily incorporating digital assets involved in criminal or civil asset forfeiture; third, a strategy for acquiring additional Bitcoin will be developed, but it must be budget-neutral and not impose incremental costs on taxpayers, and the U.S. government may not acquire additional reserve assets unless related to criminal or civil asset forfeiture proceedings. Following the release of this executive order, various cryptocurrency prices temporarily fell due to the related details not meeting industry expectations.

We believe that the motivation behind the Trump administration's establishment of a cryptocurrency asset reserve is, on the one hand, to fulfill its campaign promises and demonstrate a cryptocurrency-friendly policy stance, solidifying Bitcoin's status as the most important cryptocurrency as legal tender. On the other hand, it is also to prepare for "saving" the federal balance sheet. According to statistics, the net interest expenditure on U.S. debt for the fiscal year 2024 is projected to be $882 billion, accounting for 3.06% of GDP, and it is expected to approach $1 trillion in fiscal year 2025, reaching an unsustainable level. Unlike in the past, to tackle the challenges of the debt crisis, the Trump administration has begun to focus more on the federal "asset side." In addition to fixed assets (property, plant, and equipment, PP&E), government-sponsored enterprise (GSE) investments (Fannie Mae/Freddie Mac), and gold and silver reserves, the previously scattered cryptocurrency assets held by various government departments have naturally become a focal point. By the end of fiscal year 2024, the federal government’s net assets are approximately $5.7 trillion; simultaneously, the federal government currently holds about 200,000 Bitcoins. Although their status on the balance sheet is limited, they can still be used to enhance market confidence, similar to the functions of the federal government's Strategic Petroleum Reserve and gold reserves. Overall, while many observers believe that the cryptocurrency asset reserve strategy is related to maintaining the dollar's status, we believe that it is more based on Trump's recognition of Bitcoin as "digital gold" and the strategic fiscal layout derived from that.

At the same time, over 20 states in the United States have proposed cryptocurrency reserve bill drafts, but opinions have clearly not been unified, and several states' bills have already been rejected. Shortly after Arizona passed the bill, it was vetoed by the governor; subsequently, New Hampshire passed it and was approved by the governor, becoming the first state to establish a cryptocurrency asset reserve.

Development and Regulation of Stablecoins

Stablecoins typically come in several types: first, fiat-collateralized (centralized issuance): issued by centralized institutions, backed by fiat currency or equivalent cash assets as reserves. Second, crypto-collateralized (decentralized issuance): issued by smart contracts based on algorithms and collateral rules, using other crypto assets as over-collateral. Third, algorithmic stablecoins (algorithmically controlled issuance): these do not have sufficient centralized collateral assets, but instead adjust the supply and demand relationship between stablecoins and other crypto assets through algorithms and market dynamics to maintain price stability.

Regarding stablecoins, Trump has requested that relevant departments complete the legislative work on stablecoins before the congressional recess in August 2025. On April 4, 2025, the U.S. House Financial Services Committee passed the Stablecoin Transparency and Accountability Act (STABLE Act); at the same time, the U.S. Senate's proposed Guiding and Establishing the National Innovation of U.S. Dollar Stablecoins Act (GENIUS Act) passed in its third vote on June 17. The consensus between the two chambers lies in bringing the issuance and operation of stablecoins under regulation, emphasizing reserve transparency, and compliance upgrades, while the differences remain in specific compliance standards, the issuance of stablecoins by overseas institutions, the distribution of regulatory powers, and constraints on illegal currency-backed stablecoins.

We believe that behind the U.S. stablecoin-related policies, there are several efforts: first, to reinforce the status of the U.S. dollar in both the Web 3.0 space and the real world through dollar-backed stablecoins. As U.S. Treasury Secretary Janet Yellen emphasized, "We will seriously and prudently develop a regulatory framework for stablecoins" and "ensure that the dollar continues to serve as the world's dominant reserve currency and use stablecoins to strengthen that position." Second, it aims to compete for the discourse power in global financial governance in the digital age; for example, the EU's MiCA will officially take effect on December 30, 2024, bringing new competitive pressure to the U.S. Third, it is a continuous response to Silicon Valley and young voters' support for crypto technology, while also strategizing and preparing for the midterm elections in November 2025. Fourth, faced with a huge "incremental cake" in the digital world, both parties, as well as federal and local authorities, are vying for regulatory dividends.

Other Cryptocurrency Asset Regulation

In May 2024, the U.S. House of Representatives passed a bill aimed at creating a new legal framework for digital currencies – the "Financial Innovation and Technology Act of the 21st Century" (FIT21). The bill outlines a determination framework for classifying crypto assets as securities, commodities, etc., and specifies the relevant regulatory agencies. It states that "if the blockchain or digital ledger on which a digital asset operates is functional and decentralized," it is classified as a digital commodity and regulated by the CFTC as a commodity. This will encourage more DeFi projects to evolve towards a more decentralized direction, while making it easier to launch spot ETFs and related financial products for crypto assets explicitly classified as "digital commodities," provided they meet relevant prerequisites. In addition, the RWA track will also see more promising prospects due to its integration with DeFi, accelerating bidirectional expansion between on-chain and off-chain.

By 2025, the regulatory framework for crypto assets has been further improved. For example, the SEC has begun preparing to repeal the controversial SAB 121 accounting rule, which requires banks and companies to list customer-held crypto assets as liabilities in their financial statements, even if the banks do not control these crypto assets. On June 10, the U.S. House Financial Services Committee preliminarily passed the "2025 Digital Asset Market Structure Act," further amending the unified regulatory framework based on FIT21, emphasizing consumer protection, promoting innovation, and filling regulatory gaps, with the aim of consolidating the United States' leadership in the global crypto asset market. We believe that U.S. crypto asset regulation attempts to find a balance between risk and efficiency; on one hand, it aims to maintain trading activity and the global crypto asset "high ground" role, thus enhancing regulatory flexibility, while on the other hand, it seeks to curb the "barbaric growth" of crypto assets through the implementation of specific regulatory rules, which also helps to squeeze out the "bad money" in the market.

Additionally, it is worth noting that CBDCs are encountering significant obstacles in the United States. In May 2024, the U.S. House of Representatives passed the "Central Bank Digital Currency Anti-Surveillance Nation Act"; in January 2025, Trump signed an executive order prohibiting any agency from issuing or using CBDCs within or outside the United States. At the same time, the recent enthusiasm of the Federal Reserve for developing a digital dollar has also declined significantly.

Thoughts and Insights

Reserve Level

Although there are existing disputes regarding the data, all parties still believe that the amount of Bitcoin held by various levels of government departments in our country ranks second only to the United States, and is mainly derived from seized assets during various law enforcement processes. Considering the special status of Bitcoin in the Web 3.0 world, it may indeed be necessary to integrate the Bitcoin held by various levels of government into a certain national strategic resource (commodity) reserve from a medium to long-term perspective, in order to achieve effective asset management and respond to future global competition in the cryptocurrency market. As for other types of cryptocurrency assets, there is no need to design a reserve plan in the short term. Of course, relevant policies and regulations need to be adjusted, as well as discussions on mechanisms for central departments to replace the Bitcoin held by local governments.

Stablecoin Level

Currently, the regulatory framework for stablecoins is gradually being established in Europe and the United States, and the application of stablecoins in cross-border payments is developing rapidly. We should face challenges head-on and promote relevant innovative explorations. On one hand, with the promotion of the Hong Kong "Stablecoin Regulation Draft", some viewpoints suggest that using offshore renminbi (or renminbi assets) as collateral could explore the issuance of renminbi stablecoins in Hong Kong, but this model still faces challenges in terms of compliance with cross-border capital flow and cross-border payment. On the other hand, we can refer to the changes in global regulatory trends to study the introduction of stablecoin regulatory regulations, and explore compliant onshore renminbi stablecoins based on relevant reform and innovation rules in specific free trade zones, allowing certain banks or non-bank payment institutions to conduct pilot programs. A reference point is the electronic money token (EMT mentioned in the EU's MiCA, which is essentially a fiat currency stablecoin, and it stipulates its issuance access and technical preparation, as well as capital, reserves, governance, and risk management requirements. MiCA only allows euro stablecoins for payment activities to protect the monetary sovereignty of the EU; at the same time, EMT issuers can only be credit institutions (banks) or electronic money institutions (non-bank payment institutions).

Other Cryptocurrency Assets

For financial markets with stronger attributes such as DeFi and RWA, as well as various financial products like ETFs linked to different types of crypto assets, it is not advisable to loosen regulations in the short term, but research and attention can be strengthened. First, regarding the supply of quasi-financial services in the Web 3.0 world, how to establish standards and "thresholds" and whether there is the capacity to do so, as well as how to solidify the credit "consensus" foundation of crypto assets; second, how to educate and protect financial consumers and investors, especially whether it is possible to determine and regulate the participation of "qualified" individual investors; third, how decentralized finance and traditional finance can collaborate, whether two completely different financial standardization systems can coexist, and how to control risks in the asset interoperability between Web 3.0 and the real world; fourth, whether and how crypto assets can truly promote economic growth, corporate innovation, and resident employment, rather than just being a "small circle game." Fifth, for various illegal financial activities disguised under the banner of crypto assets, comprehensive risk prevention and continuous crackdown remain the focus.

In addition, in response to the changing global development environment, the positioning of the digital renminbi may need to moderate expectations, focusing on long-term scene and ecosystem layout, especially gradually strengthening value and capabilities in cross-border wholesale payment services.

In summary, crypto assets will become an increasingly unavoidable theme in the policies and regulations of various countries. Of course, the challenges posed by different types of crypto assets vary; the focus of crypto asset regulation differs across various aspects such as technology, data, business, and market. However, it can be anticipated that in the future, crypto assets will become an unavoidable focal point in global competition, China-U.S. exchanges, and cross-border capital flows. Therefore, our country also needs to more actively promote the formulation of rules and proactive regulation of crypto assets to enhance regulatory coordination with overseas, prevent potential risks, standardize market development, and explore industry value.