TLDR
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SEC eyes “innovation exemption” to reignite U.S. crypto leadership
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New SEC exemption could make America the next crypto innovation hub
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SEC plans crypto sandbox to boost U.S. blockchain development
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Paul Atkins pushes SEC’s innovation rule to bring crypto back home
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U.S. aims to reclaim crypto dominance with SEC innovation exemption
The U.S. Securities and Exchange Commission (SEC) is preparing to introduce an “innovation exemption” to support the crypto sector. Chair Paul Atkins confirmed that, despite the ongoing government shutdown, finalizing the innovation exemption remains a top priority. This move aligns with the agency’s broader push to position the U.S. as a global crypto hub.
Innovation Exemption Targets Domestic Crypto Growth
The innovation exemption will offer crypto firms a structured regulatory space to test and launch blockchain-based services in the U.S. This development aims to eliminate the need for developers to relocate abroad due to regulatory uncertainty. By encouraging domestic innovation, the SEC wants to restore confidence in the U.S. crypto market.
Chair Atkins emphasized that the crypto industry had endured several years of restrictive oversight under prior leadership. He pointed out that unclear enforcement discouraged development and drove many startups overseas. With the new exemption, the SEC plans to reverse this trend and bring blockchain development back onshore.
The innovation exemption forms part of the SEC’s pivot toward being a pro-innovation regulatory body. This structured approach is intended to provide clarity and stability while broader digital asset regulations are being developed. Atkins said the agency aims to complete the process by late 2025 or early 2026, depending on shutdown delays.
Stablecoin Regulation Advances Under GENIUS Act
The stablecoin-focused GENIUS Act is the first significant cryptocurrency legislation to become U.S. law, establishing a foundation for sector-specific regulations. Treasury regulators have started writing proposed rules, signaling a shift toward formal oversight. These rules are expected to accelerate development and adoption of stablecoins in everyday financial applications.
Visa’s integration of USDC in its systems is one early sign of mainstream uptake following the Act. Experts expect more financial services to incorporate stablecoins for transactional and collateral purposes. This signals a broader acceptance of digital assets under formal regulatory frameworks.
Though the SEC did not play a major role in crafting the GENIUS Act, Atkins praised the legislative direction. He highlighted the importance of the market structure components included in the bill. However, some panelists expressed doubts about whether the full market structure framework will pass Congress before the end of 2025.
U.S. Aims to Reclaim Crypto Leadership
Atkins reiterated that crypto is now the SEC’s top priority, with the innovation exemption central to that vision. He views this exemption as a way to attract developers, prevent capital flight, and boost U.S. leadership. The initiative supports former President Donald Trump’s broader goal of making the U.S. a global cryptocurrency capital.
Atkins said the agency wants to move beyond informal guidance and enforcement-only regulation. The exemption will serve as a sandbox for startups while the agency formalizes broader crypto rules. He stated that although the shutdown slows progress, essential work on this exemption will continue.
Panel discussions reflected optimism regarding this regulatory shift, although concerns remain about timelines and potential congressional delays. The SEC continues to prioritize this work and seeks to finalize the innovation exemption as early as possible. Atkins confirmed that the agency remains committed to enabling innovation within clear regulatory boundaries.
