US Cryptocurrency Regulations Need More Clarity on Stablecoins and Banking Relationships Before Lawmakers Prioritize Tax Reform

United States cryptocurrency regulations need more clarity on stablecoins and banking relationships before lawmakers prioritize tax reform, according to industry leaders and legal experts.

Industry leaders and legal experts are saying that United States cryptocurrency regulations need more clarity on stablecoins and banking relationships before lawmakers prioritize tax reform.

“In my view, tax isn’t necessarily the priority for upgrading US crypto regulation,” Orbs general counsel Mattan Erder told Cointelegraph.

A “tailored regulatory approach” for areas including securities laws and removing “obstacles in banking” is a priority for US lawmakers with “more upside” for the industry, Erder added.

“The new Trump administration is clearly all in on crypto and is taking steps that we could have only dreamed about a few years ago (including during his first term). So it seems likely that crypto regulation will be able to have it all and get much more clear and rational regulation in all areas, including tax.”

However, Erder noted there are limits to what President Donald Trump can accomplish through executive orders and regulatory agency action. “At some point, the laws themselves will need to change, and for that, he will need Congress.”

Trump’s March 7 executive order, which directed the government to establish a national Bitcoin reserve using crypto assets seized in criminal cases, was seen as a signal of growing federal support for digital assets.

Despite the administration’s recent pro-crypto moves, industry experts say crypto firms may continue to face difficulties with banking access until at least January 2026.

“I think it’s premature to say that de-banking is over,” as “Trump won’t have the ability to appoint a new Fed governor until January 2026,” Custdia Bank founder and CEO Caitlin Long said during Cointelegraph’s Chainreaction daily X show.

The crypto de-banking crisis: #CHAINREACTION

Industry outrage over alleged de-banking practices reached a crescendo when a June 2024 lawsuit spearheaded by Coinbase resulted in the release of letters showing US banking regulators asked certain financial institutions to “pause” crypto banking activities.

Coinbase had reportedly sued the U.S. Securities and Exchange Commission (SEC) in December 2023 over the agency’s alleged foot-dragging in approving new exchange-traded funds.

Coinbase CEO Brian Armstrong previously expressed concerns over the SEC’s stance on crypto derivatives trading. Despite the agency’s role in policing the markets, it had yet to approve any new products throughout 2024.

Earlier in March, the Trump administration unveiled plans to impose a 50% tax on capital gains realized by hedge funds and private equity firms.

The move was seen as an attempt to broaden the tax base and generate additional revenue at a time when the government is facing increasing budgetary constraints.

The administration is also considering rolling back the Tax Cuts and Jobs Act of 2017, which reduced taxes for corporations and individuals.

The potential rollback of the 2017 tax law has sparked debate among lawmakers and economists. Some argue that the tax cuts have benefited the wealthy at the expense of the poor and middle class.

Others contend that the tax cuts have stimulated economic growth and job creation. Ultimately, the decision of whether or not to roll back the 2017 tax law will rest with Congress.