Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.
Delaware Introduces Bipartisan Bills to Regulate Stablecoins
On March 24, Delaware Sen. Spiros Mantzavinos and Rep. Bill Bush introduced two bipartisan bills–Senate Bill 19, the Delaware Payment Stablecoin Act, and Senate Bill 16, the Delaware Banking Modernization Act. The Delaware Payment Stablecoin Act would establish a licensing and oversight regime for payment stablecoin issuers and digital asset service providers serving Delaware residents, creating three license types: payment issuer, digital asset service provider, and a combination license. The bill draws heavily from federal definitions in the GENIUS Act and guidance from the Office of the Comptroller of the Currency and requires new entrants to hold at least $5 million in capital. Consistent with the GENIUS Act, the proposal prohibits stablecoin issuers from paying interest or yield on payment stablecoins to holders. The Delaware Banking Modernization Act, among other things, adds definitions for “digital asset” and “virtual currency” to the Delaware Code. The bills now advance to the Senate Banking Committee for review. The Delaware Payment Stablecoin Act is available here. The Delaware Banking Modernization Act is available here.
White House and Key Senators Reach Tentative Agreement on CLARITY Act Stablecoin Yield Language
On March 20, Sen. Thom Tillis, R-N.C., and Sen. Angela Alsobrooks, D-Md., announced that they had reached an “agreement in principle” with the White House on the treatment of stablecoin yield in the Digital Asset Market Clarity (CLARITY) Act. The stablecoin yield dispute has been the single largest obstacle blocking the bill’s advancement; banks–led by the American Bankers Association–argued that allowing crypto platforms to pay yield on stablecoin balances would trigger deposit flight from traditional savings accounts and threaten lending capacity, while the crypto industry contended that restricting yield would render the United States uncompetitive. Patrick Witt, executive director, President’s Council of Advisors for Digital Assets, confirming such agreement on X is available here.
Bipartisan Senate Bill Introduced to Ban Sports Prediction Market Contracts
On March 23, Sen. Adam Schiff, D-Calif., and Sen. John Curtis, R-Utah, introduced the Prediction Markets Are Gambling Act, bipartisan legislation that would prohibit any Commodity Futures Trading Commission (CFTC)-registered entity from listing prediction contracts that resemble a sports bet or casino-style game. Schiff stated that “sports prediction contracts are sports bets–just with a different name” and argued that these contracts “have been offered in all 50 states in clear violation of state and federal law.” Curtis cited concerns about youth exposure to addictive sports betting, stating that “the Prediction Markets Are Gambling Act is about respecting states’ authority, protecting families, and keeping speculative financial products out of spaces where they don’t belong.” Schiff’s press release and the full text of the bill are available here.
House Financial Services Committee Holds Hearing on Tokenization and the Future of Securities
On March 25, the House Financial Services Committee convened a full committee hearing titled “Tokenization and the Future of Securities: Modernizing Our Capital Markets,” examining the application of blockchain technology to securities issuance, trading, and settlement and whether existing securities laws and regulations adequately govern these activities. The hearing considered two bills: (1) the Modernizing Markets Through Tokenization Act, which would require the Securities and Exchange Commission (SEC) and CFTC to conduct a joint study on whether additional guidance or rules are necessary to facilitate the development of tokenized securities and derivatives products; and (2) the Capital Markets Technology Modernization Act, which would clarify that intermediaries such as broker-dealers, transfer agents, and financial advisors may use blockchain-based recordkeeping consistent with SEC rules. Committee Chairman French Hill stated, “We stand at the threshold of a significant transformation in our financial landscape,” while emphasizing that “we obviously are going to maintain market integrity, no matter what technology we select.” The House Financial Services Committee’s hearing page is available here. The Modernizing Markets Through Tokenization Act is available here. The Capital Markets Technology Modernization Act is available here.
NYSE and Securitize Announce Memorandum of Understanding to Support Tokenized Securities
On March 24, the New York Stock Exchange (NYSE), part of Intercontinental Exchange Inc. (ICE), and digital asset infrastructure firm Securitize Markets LLC announced a collaboration to support the development of tokenized securities markets. Under a memorandum of understanding, the NYSE named Securitize as the first digital transfer agent eligible to mint blockchain-native securities for corporate or exchange-traded fund (ETF) issuers on the NYSE’s forthcoming Digital Trading Platform, a blockchain-based venue designed to enable 24/7 trading of U.S.-listed equities and ETFs with on-chain settlement, fractional share purchases, and stablecoin-based funding. The NYSE/ICE press release is available here. Securitize’s announcement is available here.
North Carolina Lawmakers Introduce Legislation to Establish a State Bitcoin Reserve
On March 19, North Carolina Sens. Todd Johnson and Brad Overcash introduced Senate Bill 327, the North Carolina Bitcoin Reserve and Investment Act, which would authorize the Office of the State Treasurer to allocate up to 10 percent of public funds to bitcoin as part of the state’s long-term financial strategy. The bill passed its first Senate reading the same day and was referred to the Rules and Operations Committee. Key provisions include (1) the establishment of a Strategic Bitcoin Reserve managed by the state treasurer using cold storage wallets with multi-signature authentication, and (2) a requirement that any liquidation of bitcoin from the reserve receive approval from at least two-thirds of both chambers of the General Assembly. The full text of Senate Bill 327 is available here.
SEC Chairman Atkins Addresses Digital Asset Summit
On March 24, SEC Chairman Paul S. Atkins delivered opening remarks at the Blockworks Digital Asset Summit in New York, describing the prior week’s activities as “a historic week for America’s digital asset markets.” Atkins also characterized the SEC’s recent interpretive actions as “the end of the beginning,” cautioning that agency guidance alone cannot serve as a complete solution and that only Congress can deliver a durable framework through comprehensive market structure legislation. Atkins’ remarks followed his March 19 prepared remarks before SEC Speaks, where he criticized the prior administration’s regulation-by-enforcement approach and acknowledged that the SEC’s previous treatment of crypto assets “precipitated the migration of an entire asset class toward offshore jurisdictions.” Atkins’ Digital Asset Summit remarks are available here. His prepared remarks before SEC Speaks are available here.
CFTC Announces Formation of Innovation Task Force
On March 24, CFTC Chairman Michael S. Selig announced the formation of a new Innovation Task Force dedicated to developing clear regulatory frameworks for emerging technologies in U.S. derivatives markets. The task force will focus on three primary areas: (1) crypto assets and blockchain technologies, (2) artificial intelligence and autonomous systems, and (3) prediction markets and event contracts. The CFTC’s press release is available here.
UK Bans Cryptocurrency Donations to Political Parties
On March 25, Prime Minister Sir Keir Starmer announced that the United Kingdom will ban donations in cryptocurrency to political parties, effective immediately pending legislative amendments. Housing Secretary Steve Reed stated that the moratorium on crypto donations would “remain in place until the Electoral Commission and this Parliament are satisfied there is sufficient regulation in place.” The measures are expected to apply retroactively to crypto donations of any amount from March 25. A video of the announcement is available here.
