In brief
- •SEC Chair Paul Atkins says the “innovation exemption” could be formalized by late 2025 or early 2026 despite delays.
- •The exemption aims to create a clear, pro-innovation framework for crypto and emerging digital technologies.
- •Lawmakers push forward with the GENIUS Act, giving the Treasury authority to draft stablecoin regulations.
- •New stablecoin rules are expected to drive real-world adoption and broader integration in financial systems.
Atkins Reaffirms SEC Commitment to Pro-Innovation Framework
Speaking Tuesday at Katten Muchin Rosenman LLP’s Futures and Derivatives Law Report event in Manhattan, Atkins said developing the exemption remains a top agency priority. He noted that although the shutdown has slowed progress, he expects to move forward by late 2025 or early 2026.
Atkins said years of restrictive oversight have pushed innovation overseas rather than allowing it to thrive in the U.S. He emphasized that crypto regulation is the SEC’s top focus and that the agency is now working to create a more pro-innovation environment.
The planned exemption is intended to bring clarity to developers and entrepreneurs who have long struggled with regulatory uncertainty under the SEC’s enforcement-driven approach.
SEC Eyes Formal Rulemaking as Innovation Exemption Takes Shape
Once achieved, the innovation exemption would mark a significant policy shift. Rather than relying on enforcement or informal guidance, the SEC would establish a formal rule-making process for digital assets—something the industry has long demanded.
Atkins acknowledged that the government shutdown has delayed progress but said he remains confident the agency can move forward once operations resume. He added that establishing a framework for innovation is among his top priorities, with the aim of making innovators feel welcome in building on U.S. soil.
That’s one of the top priorities to try to get that because I want to be welcoming to innovators and have them feel like they can do something here in the United States, so that they don’t have to flee to some foreign jurisdiction.
Paul Atkins
He noted that the ongoing government shutdown has slowed SEC operations. According to the SEC chair, only essential functions are continuing, while rulemaking, including work on crypto regulations, is currently paused.
Lawmakers Press On with Crypto Reforms as Industry Hesitates
Atkins also praised lawmakers’ efforts to advance digital asset regulation, highlighting the stablecoin-focused GENIUS Act as a sign of constructive progress. Although the SEC had a limited role in developing that bill, he said he is optimistic about broader market structure reforms and believes Congress is moving in the right direction.
However, not all speakers at the event shared his optimism. Summer Mersinger, CEO of the Blockchain Association and former commissioner at the Commodity Futures Trading Commission, expressed cautious optimism about the prospects for comprehensive market structure reform.
She estimated that the likelihood of passing such legislation before the end of 2025 remains uncertain, describing the chances as “better than even, but far from guaranteed.”
Greg Xethalis, general counsel at venture firm Multicoin Capital, said lawmakers deserve recognition for the work already done, even if there is still a long way to go. CoinFund President Chris Perkins expressed doubts that the bill would advance in the near term.
Stablecoin Regulation Gains Momentum as GENIUS Act Spurs New Treasury Rules
While broader market rules remain uncertain, the GENIUS Act has already started to show results. The U.S. Treasury Department has begun drafting new regulations for the stablecoin sector, providing much-needed clarity for one of crypto’s fastest-growing sectors.
Xethalis said this stage could trigger a wave of real development, as clearer rules encourage companies to integrate stablecoins into everyday products and services. He pointed to Visa’s integration of USDC into its payment systems as an early sign of how crypto is being used indirectly by consumers.
Now that we have the rules at Treasury being written for the GENIUS Act, we’re going to see a Cambrian explosion of people actually starting to utilize this stuff on a day-to-day basis.
Greg Xethalis
Mersinger added that stablecoins could continue to expand their role in financial markets, especially in areas like fund transfers and collateralized contracts. She said the new regulatory framework could help establish stablecoins as a practical tool for financial institutions and investors.
As the SEC works toward finalizing its innovation exemption and lawmakers continue debating digital asset legislation, 2026 is shaping up to be a key year for U.S. crypto regulation. The coming months could define how digital assets, stablecoins, and blockchain technology evolve within the country’s financial system.