Navigating Crypto Regulatory Framework In 2025

Introduction

In today's rapidly evolving digital landscape, financial institutions offering virtual currency products and services must navigate a complex and dynamic regulatory framework. The recent passage of the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 ("GENIUS Act" or "Act") marks a significant milestone in the regulation of stablecoins, offering clarity and a structured regulatory framework for the burgeoning field of digital assets.¹By defining and regulating stablecoins — digital currencies pegged to fiat values — the Act provides financial institutions with guidelines that distinguish these assets from traditional securities and commodities. This legislative move not only legitimizes stablecoins but also positions U.S. financial institutions to take a leading role in global digital commerce. Understanding and adapting to this framework is crucial for institutions seeking to innovate while maintaining stringent compliance standards.

Federal Regulatory Framework

Until the recent passage of the GENIUS Act, which specifically regulates stablecoins, there was no comprehensive federal regulatory framework for virtual currency or digital service providers. Cryptocurrency regulation in the U.S. was primarily overseen by the Financial Crimes Enforcement Network (FinCEN) at the federal level and by a patchwork of state regulators, with the New York Department of Financial Services and the California Department of Financial Protection and Innovation taking leading roles.

State Regulatory Framework

At the state level, virtual currencies are generally regulated by state banking, money transmitter, or securities regulatory bodies. While most states have existing laws related to banking and money transmission, they often lack comprehensive legislation specifically addressing safety, soundness, and consumer compliance requirements for virtual currency activities.

Many states treat virtual currency activities as money transmission under their current laws, requiring companies to obtain money transmitter licenses and comply with applicable regulations. However, as of 2025, some states have determined that virtual currency activities do not fall under their existing money transmission acts or have enacted legislation to explicitly exempt these activities. Consequently, in states like Hawaii, Indiana, Massachusetts, Montana, Utah, and Virginia, virtual currency operations remain largely unregulated.

Conversely, states like New York, California, Wyoming, Louisiana, and Nebraska have enacted comprehensive laws and regulations for virtual currency activities, supplementing their existing frameworks.

• New York New York has been at the forefront of virtual currency regulation in the U.S. with its BitLicense framework, established in 2015 by the New York State Department of Financial Services (NYDFS).² The BitLicense sets stringent regulatory requirements for companies engaged in virtual currency activities within the state. It mandates licensing, comprehensive compliance programs including anti-money laundering (AML) and cybersecurity measures, consumer protection protocols, and capital requirements. The BitLicense also requires periodic reporting and audits, ensuring a robust oversight of virtual currency businesses. This regulatory environment aims to protect consumers while fostering innovation and trust in the digital financial sector.
• California
  Alongside New York's BitLicense regime, California's Digital Financial Assets Law (DFAL), signed into law on Oct. 13, 2023, establishes a comprehensive regulatory framework for businesses handling digital financial assets.³ This legislation mandates requirements for licensing, consumer protection and disclosures, and stablecoin reserve requirements, among other requirements.
• Wyoming
  Wyoming has established itself as a leader in cryptocurrency and blockchain regulation, focusing on innovation. Wyoming Statutes Title 13, Chapter 12 establishes Special Purpose Depository Institutions (SPDIs) specifically for blockchain and cryptocurrency businesses.⁴ These institutions must comply with regulations including, but not limited to reserve, capital, liquidity, and consumer disclosure requirements.
• Louisiana
  Louisiana enacted the Virtual Currency Businesses Act, effective August 1, 2020, requiring licensing for individuals engaging in virtual currency business activities. This act includes requirements for surety bonds, net worth stipulations, reserve requirements, quarterly financial reporting, and compliance programs for BSA/AML and cybersecurity and is implemented in the Louisiana Administrative Code in Title 10, Chapter 19, Virtual Currency.⁵
• Nebraska
  Nebraska is one of only two states, alongside Wyoming, that has created a separate bank charter to encourage digital asset companies. The Nebraska Financial Innovation Act, adopted in May 2021, authorizes a charter for digital asset depositories, subject to liquidity, capital, compliance program, and surety bond requirements, and is implemented in Nebraska Revised Statutes 8-3001.⁶

Conclusion

The regulatory landscape for virtual currencies and digital assets in the U.S. continues to evolve with significant developments such as the GENIUS Act and various state-level initiatives. Financial institutions must remain vigilant and adaptable, ensuring compliance with both federal and state regulations while embracing opportunities for innovation. The diverse approaches taken by states — from comprehensive frameworks like New York's BitLicense and California's DFAL to the unique bank-like charters offered by Nebraska and Wyoming — highlight the dynamic nature of this field. As demand for digital financial products grows, institutions must leverage their understanding of these regulations to strengthen their market position and drive growth, all while safeguarding consumer interests and maintaining robust security standards. This ongoing evolution presents both challenges and opportunities, urging institutions to be proactive in their strategic planning and execution to thrive in this rapidly changing environment. Ankura, with its experience in cryptocurrency and digital assets, can guide institutions through the rapidly changing regulatory landscape.

Footnotes

1. Guiding and Establishing National Innovation for U.S. Stablecoins Act, S.1582 — 119th Congress (2025-2026), https://www.congress.gov/bill/119th-congress/senate-bill/1582/text