This week in digital assets federal policy, the House Financial Services Committee passed several bills, including the STABLE Act, Anti-CBDC Surveillance State Act, and Financial Technology Protection Act; several Democrats raised concerns about potential conflicts of interest by President Trump or those close to the White House. Legislation was introduced targeting money laundering, foreign interference in cryptocurrency markets, and expanding retirement investment options to include crypto. House Financial Services Republicans called on banking agencies to rescind Biden-era guidance perceived as stifling innovation. Hearings on market structure kick off next week.

The SEC issued statements clarifying its stance on stablecoins and announcing the review of multiple digital assets-related staff statements issued in recent years. In addition, the SEC Crypto Task Force announced upcoming roundtables.

On emerging tech federal policy, check out my latest op-ed in the Diplomatic Courier: Build Momentum from the Middle to Find Common Ground on AI

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Congress

Hearings

• Last week
  • On April 1, the House Financial Services Committee held a hearing on Following the Money: Tools and Techniques to Combat Fraud.
  • On April 2, the House Financial Services Committee held a markup on the STABLE Act.
• This week
  • On April 9, the Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee will hold a hearing on American Innovation and the Future of Digital Assets: Aligning the U.S. Securities Laws for the Digital Age.
  • On April 9, the House Agriculture Commodity Markets, Digital Assets, and Rural Development Subcommittee will hold a hearing on American Innovation and the Future of Digital Assets: On-Chain Tools for an Off-Chain World.
• Upcoming
  • On April 29, the House Financial Services Financial Institutions Subcommittee will hold a hearing on Regulatory Overreach: The Price Tag on American Prosperity.

Legislation

• The House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, Anti-CBDC Surveillance State Act, and the Financial Technology Protection Act.

• Senate Judiciary Committee Chair Chuck Grassley (R-IA) and Sen. Catherine Cortez Masto (D-NV) introduced the Combatting Money Laundering in Cyber Crime Act to enhance the Secret Service’s investigative authority over criminal digital asset transactions. (Text)(Press release)

• Sens. Tommy Tuberville (R-AL), Cindy Hyde-Smith (R-MS), and James Justice (R-WV) introduced the Prohibiting Foreign Adversary Interference in Cryptocurrency Markets Act to prohibit the Commodity Futures Trading Commission from registering a digital commodity platform that is owned in whole or in part by an entity organized or established in the People’s Republic of China, including Hong Kong and Macao, Cuba, Iran, North Korea, Russia, and Venezuela. (Text)(Press release)

• Sens. Tommy Tuberville (R-AL) and Cynthia Lummis (R-WY) introduced the Financial Freedom Actto reverse a Biden-era memo from the U.S. Department of Labor (DOL) that limits options for where Americans can invest their retirement, including in crypto. (Text)(Press release)

• Sen. Ted Cruz (R-TX) introduced the Facilitate Lower Atmospheric Released Emissions (FLARE) Act to The Facilitate Lower Atmospheric Released Emissions (FLARE) Act to make permanent the 100% bonus depreciation for equipment used to intake natural gas and transforms it into electricity, and other productive uses, prohibit entities owned by China, Iran, North Korea, or Russia from utilizing this cost recovery option, and reduce emissions by incentivizing the conversion of otherwise stranded natural gas into usable energy. (Text)(Press release)

Correspondence

• House Financial Services Chair French Hill (R-AR) sent letters to multiple agencies requesting specific actions implemented under the Biden-Harris Administration be rescinded, modified, or reproposed, including letters to the Federal banking agencies and the Consumer Financial Protection Bureau urging them to withdraw regulatory actions that have “stifled innovation, restricting financial institutions’ engagement in digital assets and hindering the growth of financial technology (fintech) companies.” (Banking letter)(CFPB letter)(Press release)

• House Financial Services Ranking Member Maxine Waters (D-CA), Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee Ranking Member Stephen Lynch (D-MA), and Subcommittee on Housing and Insurance Ranking Member Emanuel Cleaver (D-MO) sent a letter to Department of Housing and Urban Development (HUD) Secretary Scott Turner expressing concern about Administration plans to implement blockchain and cryptocurrency and warning of cryptocurrency risk to destabilize the housing market. (Letter)(Press release)

• Senate Banking Ranking Member Elizabeth Warren (D-MA) and House Financial Services Ranking Member Maxine Waters (D-CA) sent a letter to Securities and Exchange Commission Acting Chair Mark Uyeda requesting information on safeguards to prevent the Trump family’s financial interests from influencing SEC crypto policy decisions. (Letter)(Press release)  

• Senate Banking Ranking Member Elizabeth Warren (D-MA) sent a separate letter to the SEC Office of Inspector General Deborah Jeffrey requesting an investigation into whether Trump Administration officials and those with direct ties to the President’s family and business partners may have improperly influenced SEC enforcement and regulatory decisions on cryptocurrency. (Letter)(Press release)

• Warren also released responses from SEC Chair Nominee Paul Atkins, OCC Comptroller Nominee Jonathan Gould, and nominee for Assistant Secretary for Financial Institutions Luke Pettit, to the Questions for the Record (QFRs) she submitted ahead of their confirmation hearings on March 27, including multiple questions related to digital assets. (Press release)

Publications

• House Financial Services Chair French Hill (R-AR) and House Agriculture Committee Chair GT Thompson (R-PA) published in Coindesk A Blueprint for Digital Assets in America outlining six principles to guide digital assets legislation. (Op-ed)

• House Financial Services Subcommittee on Digital Assets Chair Bryan Steil (R-WI) published an op-ed in the Washington Times on The Golden Age for Stablecoins. (Op-ed)(Press release)

Trump Administration

Securities and Exchange Commission (SEC)

• The SEC issued a Statement on Stablecoins detailing views and analysis of stablecoins, including, “It is the Division’s view that the offer and sale of Covered Stablecoins, in the manner and under the circumstances described in this statement, do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the ‘Securities Act’) or Section 3(a)(10) of the Securities Exchange Act of 1934 (the “Exchange Act”). Accordingly, persons involved in the process of “minting” (or creating) and redeeming Covered Stablecoins do not need to register those transactions with the Commission under the Securities Act or fall within one of the Securities Act’s exemptions from registration.” (Statement)

• SEC Acting Chair Mark Uyeda issued a statement announcing the SEC will review select staff statements for the purpose of identifying those that should be “modified or rescinded consistent with current agency priorities.” The statements selected include:
  • Division of Examinations’ Continued Focus on Digital Assets Securities
  • Staff Statement on WY Division of Banking’s “NAL on Custody of Digital Assets and Qualified Custodian Status”
  • Staff Statement on Funds Registered Under the Investment Company Act

• SEC Crypto Task Force will continue its series of roundtables (Press release):
  • April 11, Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading
  • April 25, Know Your Custodian: Key Considerations for Crypto Custody.
  • May 12, Tokenization – Moving Assets Onchain: Where TradFi (Traditional Finance) and DeFi (Decentralized Finance) Meet
  • June 6, DeFi (Decentralized Finance) and the American Spirit

Noteworthy Quotes and Events

ADMINISTRATION

Securities and Exchange Commission (SEC)

• SEC Commissioner Caroline Crenshaw issued a dissenting statement to the SEC Statement on Stablecoins, entitled “Stable” Coins or Risky Business? and concluding, “These legal and factual flaws in the staff’s statement do a real disservice to USD-stablecoin holders, and, given the central role of stablecoins in the crypto markets, to crypto investors more generally.  They feed a dangerous industry narrative about the supposed stability and safety of these products.  This is perhaps best highlighted by the staff’s choice to parrot a highly misleading marketing term, ‘digital dollar,’ to describe USD-stablecoins.  Make no mistake:  there is nothing equivalent about the U.S. dollar and unregulated, privately-issued crypto assets that are opaque (clearly even to the staff), uncollateralized, uninsured, and laden with risk at every step of their multi-layer distribution chain.  They are risky business.” (Statement)

CONGRESS

House Foreign Affairs Hearing on Iran

• Members asked follow-up questions regarding digital assets issues raised in the testimony of Claire Jungman, chief of staff for United Against Nuclear Iran in the House Foreign Affairs Committee hearing on A Return to Maximum Pressure: Comprehensively Countering the Iranian Regime’s Malign Activities. (Jungman testimony)
  • Rep. Brad Sherman (D-CA): “I would also call Ms. Jungman, you brought the importance of cryptocurrency. I point out that our sanctions that got us in 2015, were pretty much based on our power to control international currency, because it was all dollars. The Crypto enthusiasts and the leaders in that industry have said they want to take that away from the United States because they think it’s illegitimate for America to have that power. Do you think that we should give up the power that we get from having the dollar being the world’s reserve currency?”
    • Claire Jungman: “No, I don’t think we should give up that power. But I do think that there needs to be stronger regulations and monitoring of waste.”
  • Rep. Young Kim (R-CA): “You talked about the IRGC is efforts to diversify its revenue streams, including through cryptocurrency, and how it offers Iran a way to bypass financial oversight and quietly move funds across the borders. So in your perspective, how extensively is the IRGC using cryptocurrency to evade sanctions?”
    • Claire Jungman: “We saw around I think it $8 billion of transactions from Iran using cryptocurrency. And I think that this is an area they’re obviously tapping into as sanctions, you know, are coming out. So they’re, they’re moving their money there because it’s harder to track. And I think that it’s an area that sanctions could be enforced stronger.”
  • Rep. Young Kim (R-CA): “So could you talk about some of the policy changes that you think is necessary to improve that effectiveness of sanctions? And also what risks do Iran’s cryptocurrency and front company activities pose to global financial integrity?”
    • Claire Jungman: “I will, this is not my area of expertise. But I’m happy to follow up with a written response there.”Rep. Young Kim (R-CA): “Well, thank you so much. You know, I, I asked that because, you know, I want to see if these tactics could set a precedent for other rogue actors or states. And I think we’ve been pretty clear on the reason why we need a digital assets framework to coordinate with our allies to address those crypto crime.”
  • Rep. Warren Davidson (R-OH): “…you bemoaned the existence of cryptocurrency to some extent, saying that the pseudonymous nature of blockchain transactions makes enforcement challenging. However, you admit that it only makes up about $8 billion in transaction in reality. I’m the Chairman of national security, illicit finance. We just had a hearing earlier today where people will try to trace the money actually like cryptocurrency because it’s on a public blockchain so it’s easier to find Follow the money. It still presents challenges for on and off ramps. But when it’s on a blockchain, it’s easier to detect. So you know, what proportion of Iran’s illicit finance is really crypto versus conventional finance.”
    • Claire Jungman: “In the grand scheme, the $8 billion is not that significant when you look at, you know, $50 billion that was made in oil revenues last year, or $135 billion in oil revenue that was made between 2021 and 2024. So I think that there needs to be stricter enforcement and want oversight on the blockchain and the crypto transactions, but it doesn’t necessarily need to be.”

• On the timing of stablecoin and market structure legislation in the House, House Financial Services Chair French Hill (R-AR) said he plans “to make sure that we move a market structure bill in conjunction with” stablecoin legislation and that “moving both allows us to contemplate this issue in its full manner.” (Politico)

• Meanwhile, regarding consideration of stablecoin legislation in the Senate, Sen. Bill Hagerty (R-TN) said “We’re working through it right now. I’m very optimistic that we’ll get this teed up. I think it will be — certainly, we’re talking weeks.” On market structure timing, he said the “Senate clearly is not prepared for market structure at this point in time. That’s the next step, after we get this one across the finish line.” (Politico)

• Rep. Suhas Subramanyam (D-VA) said, “I appreciate some of the discussion today, and I think I understand that data storage is more important than ever, as we have AI and blockchain becoming more prevalent and accessible. But, I want to tell you a cautionary tale about my community. My district is home to more data centers than any other district in the country; in fact, if my district were a country, it would have more data centers than almost every other country in the world. If you look at this, ten data centers usually use more power than all of D.C., and we have more than 200, with another 100 planned. Many years ago, when these data centers were approved, they seemed like a great idea at the time, talk about lower property taxes and revenue for the counties, but our community is paying the price now. We are a cautionary tale for the rest of the country. The power needed for these data centers is creating a huge problem for our community… So, what I’m asking today is let’s be smart about how we’re deploying data storage as AI and blockchain become the norm. I’m calling for a national strategic plan on how we deploy more data storage that takes into account the impact on communities. It needs to be thoughtful—we need to be thoughtful about how we handle the unintended consequences on communities like how it will affect costs, and people’s utility bills? How will it impact our environment? How do we ensure that the security of these data centers is sufficient? We need to be thoughtful about data centers and data storage and their long-term impacts. One can support innovation, but it doesn’t have to come at the cost of our communities.” (Press release)

• In the House Financial Services markup of the STABLE Act, Ranking Member Maxine Waters (D-CA) said, “With this stablecoin bill, this Committee is setting an unacceptable and dangerous precedent validating the President and his insiders’ efforts to write rules of the road that will enrich themselves at the expense of everyone else. And I understand that you were heard, at some point, saying that Trump’s entanglements make this work ‘more difficult,’ but Mr. Chairman, that is hands down the understatement of the year. Trump likely wants the entire government to use stablecoins, from payments made by the Department of Housing and Urban Development to social security payments to paying taxes. And which coin do you think Trump would replace the dollar with – his own, of course. Despite the fact that this absolutely harms this bill, there’s some other things that I don’t really agree with, and I was hoping that we may be able to work out some of these things with amendments. But, if we go forward with this bill knowing the President of the United States of America and his wife have already created their memecoin, and now in the middle of the work that we’re trying to do – where you and Mr. McHenry and I – have put forth such an effort. If he’s not blocked from owning a stablecoin, I cannot go any further with any amendments to try and agree on some of the other things that I have some problems with. But, because of the work that we have done for so long I’m trying, and I’ve tried very hard to come to some agreements. And I thought maybe with some amendments, for those things I still worry about, we could come to some agreements. But, if there is no effort to block the President of the United States of America from owning his stablecoin business just as he owns crypto, which is his largest asset now, I will never be able to agree on supporting this bill. And I would ask other members not to be enablers allowing the President of the United States to get with this.” (Press release)

• Rep. Zach Nunn (R-IA) tweeted, “Title: Safeguarding Digital Assets Digital assets are transforming how we spend money and we must ensure they are secure for every American. My bipartisan Financial Technology Protection Act, which would do just that, passed the FinancialCmte unanimously this week. Next stop: the House Floor!”

• Financial Services GOP tweeted, “WATCH: Chairman RepFrenchHill delivers opening remarks at today’s Full Committee markup: ‘Committee Republicans have been clear: digital asset policies must promote private sector innovation and foster competition to ensure the United States maintains the world’s leader in global payments.’”

• Financial Services GOP also tweeted, “WATCH: GOPMajorityWhip in support of H.R. 1919: “The Anti-CBDC Surveillance State Act ensures that the United States digital currency policy is in the hands of the American people, not the administrative state. It reflects our American values of privacy, individual sovereignty, and free market competitiveness.”

• Financial Services GOP also tweeted, “WATCH: ZachNunn in support of H.R. 2384: “Passing this bill is vital to enhancing America’s national security, protecting digital assets, and ensuring that the next generation of financial technologies is developed here domestically in the United States and with our common allies.”

• Financial Services GOP also tweeted, “WATCH: RepBryanSteil in support of the STABLE Act: ‘We’re living in the golden age of digital assets. The rise of blockchain technology and cryptocurrencies has revolutionized our approach to financial systems, payments, investments, and the internet.’”

• Rep. Young Kim (R-CA) tweeted, “GOOD NEWS: the STABLE Act passed out of FinancialCmte! This bipartisan, commonsense bill would create a policy framework that allows the United States to take advantage of stablecoins, create jobs, & lead in digital ledgers. Let’s get this done for the American people.”

• House Committee on Agriculture tweeted, “America must lead on digital assets. CongressmanGT and FinancialCmte Chairman RepFrenchHill lay out six principles Congress should follow to give innovators clarity and consumers confidence.”

• Sen. Chuck Grassley (R-IA) tweeted, “Sen Cortez Masto & I introd bipart legis 2 enhance Secret Service’s investigative authority ovr criminal digital assets As money laundering schemes cont to evolve we must ensure Secret Service is able 2 effectively anticipate+ identify+prevent them”

• Grassley also tweeted, “Had mtg w Brian Quintenz nominee for Commodity Futures Trading Commission Chair Talked abt the CFTC Whistleblower Protection Program spot crypto markets + the future of CFTC”

• Rep. Marlin Stutzman (R-IN) tweeted, “The STABLE Act will make America a leader in the digital payment ecosystem and STRENGTHEN the US dollar!”

• Stutzman also tweeted, “China isn’t waiting for us to approve crypto legislation- if we do not move quickly they WILL pass us!”

• Rep. Josh Gottheimer (D-NJ) tweeted, “Stablecoins are a critical part of the growing digital asset ecosystem. We need rules to protect Jersey families as they invest in digital assets in America — instead of overseas. I’m helping introduce the STABLE Act to keep innovation in the US and protect American’s digital pocketbooks.”

• Rep. Mike Lawler (R-NY) tweeted, “This morning, I joined FoxBusiness Mornings with Maria to break down today’s FinancialCmte markup. We’re taking key steps to protect financial privacy and ensure stability in digital assets. The United States is the largest economy in the world and enacting legislation to regulate stablecoins is key to American innovation and will ensure we remain a leader in the digital economy.”

• Lawler also tweeted, “After hours of nonsense debating Democrat amendments to the STABLE Act, its apparent some of my colleagues are too blinded by political games to seek solutions that would strengthen the United States’ standing in the digital economy when it breaks party lines.”

• Rep. Sam Liccardo (D-CA) tweeted, “I co-sponsored the STABLE Act to establish long-overdue rules of the road for stablecoin digital assets—but the rulemakers must not be compromised by their own financial interests. I’m pushing to prevent elected officials like realDonaldTrump from exploiting public office for financial gain. Let’s make corruption illegal again— here’s my take from today’s USHouseFSC hearing.”

• Sen. Cynthia Lummis (R-WY) tweeted, “I loved meeting with RepBryanSteil today! My team and I are working hard to make America the bitcoin and digital asset capital of the world, and it starts by passing stablecoin and market structure legislation in the coming months.”

• Rep. Bryan Steil (R-WI) tweeted, “The future of digital assets is here and the STABLE Act is ready to lead the way.”

• Sen. Cindy Hyde-Smith (R-MS) tweeted, “We cannot let the growing influence of crypto be compromised by allowing our enemies to meddle within the growing markets. The risk is too great. That’s why I’m supporting SenTuberville’s legislation to restrict the ability of adversarial countries from participating in our U.S. digital commodity platforms.”

• Sen. Elizabeth Warren (D-MA) tweeted, “While Republicans rush to pass a bill that’ll allow Donald Trump and Elon Musk to take control of your money, RepMaxineWaters and I are calling on the SEC to investigate Trump’s crypto business for conflicts of interest. Americans deserve better.”

• Rep. Sylvia Garcia (D-TX) tweeted, “Republicans are fast-tracking a stablecoin bill that allows Donald Trump, his family, and Elon Musk to continue to corruptly cash in on shady crypto schemes—all while Trump sits in the Oval Office. No rules. No accountability. Just profit off the backs of everyday investors and taxpayers. If the stablecoin industry wants legitimacy, there must be real oversight to ensure we protect consumers.”

• Sen. Ted Cruz (R-TX) tweeted, “My legislation, the FLARE Act, incentivizes entrepreneurs and crypto miners to utilize natural gas that would otherwise be stranded.”

• Cruz also tweeted, “As the Biden administration was winding down, it adopted a midnight rule requiring the IRS to label DeFi developers as ‘brokers.’ My resolution reversed the anti-crypto rule with overwhelming bipartisan support. It now makes its way to President Trump’s desk to be signed into law.”

• Sen. Tommy Tuberville (R-AL) tweeted, “America is the country of FREEDOM, but under Joe Biden, the federal government tried to control how Americans invest their money. President Trump is the Crypto President. That’s why I am re-introducing the Financial Freedom Act to give AMERICANS the freedom to invest their retirement in crypto.”

Highlights of the Week

• I published Build Momentum from the Middle to Find Common Ground on AI in the Diplomatic Courier, which concludes, “Polarization may be a challenge, but it is not insurmountable. The future of AI policy depends on our ability and willingness to work together—to create momentum through points of consensus. By centering on shared goals, we can ensure that AI policies and standards do not fall further behind the pace of innovation.”

About Zero One Strategies

Zero One Strategies is a boutique 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, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.

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