Stacks (STX) Is Uniquely Positioned to Leverage Regulatory Compliance as the First SEC-Regulated Token

The US Securities and Exchange Commission (SEC) recently revoked guidelines requiring firms holding cryptocurrency on behalf of customers to account for it as a liability.

President Donald Trump signed a much-awaited executive order on January 23 establishing a digital asset working group. The group will create regulations and evaluate a federal cryptocurrency reserve in an effort to legitimize the asset class in the US. At the same time, the order responds to long-standing calls for softer and clearer regulations from both traditional financial and crypto platforms.

The order follows through on the President's promise to create a strategic national Bitcoin reserve, as his family's connections and personal financial interests in the crypto industry deepen. He made the promise at the 2024 Bitcoin conference in Nashville. At the time, he doubled down on his stance that the US should become the world's crypto capital and superpower, reiterating that China would beat the US to it in the absence of swift measures.

A more supportive regulator

The US Securities and Exchange Commission (SEC) recently rolled back guidelines that required firms holding cryptocurrency on behalf of customers to account for it as a liability. These guidelines, like many before them, served to harm the interest of the firms by making it more expensive for them to hold digital assets.

Before rolling back those guidelines, the SEC launched a so-called crypto task force. According to a press release, it has been tasked with developing a sound regulatory path that respects legal boundaries. Commissioner Hester Peirce, who was highly critical of former SEC chairman Gary Gensler's aggressive approach to cryptocurrency regulation, will lead the task force. She is also a contender for Gensler's position.

Stacks, a Layer-2 scaling solution for Bitcoin and a decentralized computer network running on cryptographic protocols, is uniquely positioned to capitalize on regulatory compliance as the first SEC-regulated token. Its token STX is the 67th largest cryptocurrency by market cap. Notably, Stacks thrived during Gensler's tenure, which not all cryptocurrencies can say (Ripple was hit hard by the long-running lawsuit).

Hailing from NY, the leading Bitcoin L2 team thanked CoinGecko on X for making a list of the top US-made coins and putting Stacks on it. The coin is 22nd on that list. US-made coins have been getting a lot of attention lately. Donald Trump wants to enact helpful legislation for them to grow. He also wants to eliminate capital gains taxes for investors in these assets. According to a statement from the White House, his executive order is aimed at providing regulatory certainty and clarity based on frameworks that account for emerging technologies, technology-neutral regulations, well-defined jurisdictional regulatory boundaries, and transparent decision-making.

Cryptocurrency exchanges and other organizations have long anticipated clearer and more favorable regulations, so the process is expected to help mainstream Bitcoin and altcoins. As a compliant coin, no fines or extended legal battles can hold Stacks back from becoming an even more successful American cryptocurrency.

Stacks inherits Bitcoin's security and trustless nature

Stacks inherits the flagship crypto's superior security as an L2 with a two-way peg, enabling holders to peg in or out of the Bitcoin blockchain. It uses Bitcoin for final settlement. Its wrapped sBTC is among the most secure wrapped Bitcoin products available for trading. Wrapped Rootstock Smart Bitcoin (RBTC) is the only other wrapped product verified and settled on the Bitcoin blockchain.

Stacks inherits Bitcoin's robustness and immutability. It enhances the latter's utility by bringing smart contracts and decentralized applications. Clarity, Stacks' secure, deterministic smart contract language, allows developers to write transparent and predictable applications without risk.

Stacks employs a Proof-of-Transfer (PoX) mechanism, where users lock STX tokens and earn Bitcoin as rewards, creating a direct economic link between Stacks and Bitcoin. The PoX mechanism requires significantly less energy than traditional mining, mitigating concerns about the environmental impact of blockchain technologies.

By enhancing Bitcoin's utility, Stacks broadens its appeal and use cases, making it easier for mainstream users to engage with Bitcoin indirectly. Features like decentralized finance (DeFi), tokenized assets, and Web3 functionalities help position Bitcoin as more than a store of value, attracting a broader audience.

Notable milestones for Stacks

The Stacks ecosystem achieved over 350 million monthly API requests and 40,000 Hiro wallet downloads and deployed 2,500 Clarity smart contracts, establishing itself as a leading Web3 project on Bitcoin in its very first year. It has facilitated the creation of DeFi platforms, such as DEXs and lending protocols, enabling financial services that leverage Bitcoin's security. Approximately 140,000 NFTs have been minted on the platform, showcasing its capability to support diverse assets.

The launch of Grayscale Stacks Trust enabled institutions to purchase the coin easily. It's among the first vehicles allowing investors to gain exposure to the STX token in the form of a security without directly having to deal with buying and storing it. Trust shares are based on STX per share. The product tracks the market value minus fees and other costs.

Facilitating mainstream exposure to