Updated: November 25, 2024
Last week, I was asked to speak to a reporter about crypto regulation. My research on how different levels of regulatory compliance affect market efficiency in cryptocurrencies was published in HBR, making me a relevant source.
Since this was my first media interaction, I sought advice from a colleague in the communications department. Their key recommendations were:
Stay analytical. Stick to data-driven insights rather than opinions. Reporters may seek bold claims, but credibility matters more in the long run.
Speak within your area of expertise. It’s okay to acknowledge limits. Speculating beyond your research can lead to misinterpretation.
Be mindful of your words. Off-the-record comments can still make their way into a story. Choose your words carefully.
The Academic vs. Media Approach
I approached the interview as if it were a job market talk. 🙂 As an academic, I was prepared to answer questions but cautious about making bold claims without sufficient causal evidence. However, I quickly realized that reporters are looking for a compelling story - one that resonates with their audience. The more engaging and striking the narrative, the better it is for the media.
In academia, we focus on incremental contributions to the broader scientific discussion. For the press, incremental is boring - they want something radical or contrarian. Yet, academic research also values novelty and counterintuitive insights. To balance these approaches, in future interviews, I will highlight one of the most intriguing aspects of my research and structure my response around it.
Writing vs. Speaking About Research
One final takeaway for academics: writing about your research and talking about it are two very different skills.
Writing allows for careful argumentation, detailed explanations, and technical depth. Speaking, especially in media interviews, requires clarity, brevity, and engaging delivery. Jargon-heavy or complex answers can lose the audience, so key insights must be distilled into simple, impactful messages. Unlike writing, where revisions are possible, speaking requires quick, confident responses. Mastering both skills helps bridge the gap between research and public understanding.
Overview of the Legislative Landscape
I reviewed the crypto legislation tracker, which compiles all crypto-related bills and their current status. As of now, there are 73 bills, companion bills, and drafts proposing regulations for the crypto industry. These legislative initiatives can be classified into three main categories:
Enabling (59%, or 43 initiatives): Bills that promote action without imposing prohibitions, typically using terms such as “provides,” “directs,” “establishes,” or “requires.” These bills primarily focus on further studying digital assets or defining the responsibilities of existing or newly established regulatory bodies (e.g., S. 1578, H.R. 8275).
Forbidding (27%, or 20 initiatives): Bills that explicitly prohibit certain activities are often introduced with terms like “prohibits.” The most common initiatives in this category aim to ban the creation of a central bank digital currency (CBDC) (S. 3801, companion to H.R. 5403) or restrict government employees from owning cryptocurrency (H.R. 2678).
Definitive (14%, or 10 initiatives): Bills that provide definitions or clarifications regarding key terms. For example, H.R. 238 states that “proof-of-work mining used for cryptocurrencies such as Bitcoin is important to the United States’ ability to achieve its energy and economic goals.” While these initiatives do not impose direct regulations, they contribute to shaping the legal framework by refining terminology.
Regulatory Gaps and Implications
Despite the growing number of legislative initiatives, the regulatory landscape for cryptocurrencies remains underdeveloped compared to the rapid evolution of the industry. The absence of clear guidelines does not currently hinder industry growth, but prolonged uncertainty may negatively impact market participants, including investors.
Interestingly, this lack of regulatory clarity has not prevented the establishment of crypto-native enterprises in the U.S. The Coinbase IPO in 2021 was a milestone demonstrating the industry’s ability to integrate with existing financial regulations. Additionally, multiple crypto exchanges secured a Money Services Business (MSB) license from the Financial Crimes Enforcement Network (FinCEN) as early as 2021.
However, despite companies successfully navigating regulatory frameworks set by the SEC and FinCEN, legislators have been slow to recognize their unique characteristics - particularly their role in managing decentralized assets. Since at least 2021, no legislation specifically tailored to these firms has been enacted. This delay may stem from both political and technical factors. Compared to jurisdictions like Switzerland, where regulatory decisions have been more expedient, the prolonged deliberation in the U.S. suggests that comprehensive legislation is unlikely to materialize in the next four to five years.
Legislative Sponsorship and Progress
The 73 legislative initiatives consist of 44 House-initiated and 30 Senate-initiated bills. Sponsorship is concentrated in a few states, with Florida (8), North Carolina (7), Texas (5), and Wyoming (5) leading the effort. Lawmakers from 29 states have introduced legislation, while others lag in addressing crypto regulation.
In total, 47 legislators - 31 Representatives (7% of Congress) and 16 Senators (16% of the Senate) - have sponsored crypto-related bills. Of these initiatives, 15 have passed their initiating body (House or Senate), while 46 remain under review.
Conclusion
The current state of U.S. crypto legislation reflects a fragmented and evolving regulatory environment. While companies continue to find ways to comply with existing financial regulations, the absence of targeted legislation creates uncertainty for industry participants. Given the historical pace of decision-making, significant regulatory clarity is unlikely to emerge in the near term, leaving the industry to operate within an ambiguous and shifting legal framework.