Fresh momentum in US crypto regulation

For a long time, the US was seen as a brake on the crypto industry. A lack of regulations, a sense of uncertainty as regards regulatory developments and demanding enforcement measures by the US Securities and Exchange Commission (SEC) created a difficult environment. But now a change is underway: the US has ambitious plans to position itself as a global pioneer in digital finance technology. With the approval of Bitcoin spot ETFs and the repeal of the controversial SAB-121 rule, the US is sending a strong signal to the financial world: crypto is here to stay. At the same time, a new SEC crypto task force is to provide clarity and regulate the sector without stifling it in the process. But what does this new course mean for the Swiss financial centre?

US on crypto course: the new regulatory roadmap

The decisive step was the introduction of a new crypto task force by the SEC. Instead of solely relying on retrospective sanctions, this body is to establish clear rules and ensure transparency. What is particularly worthy of note is that the unit is being headed up by Hester Peirce, known in the community as “Crypto Mom”. She has long advocated more crypto-friendly regulations and is calling for companies and developers to be able to rely on transparent and fair framework conditions.

The approval of Bitcoin spot ETFs represented a further milestone. These investment products now stand alongside some of the most successful launches in the history of Wall Street. Institutional investors and banks in the US can now invest in Bitcoin through regulated channels – a major step towards broader acceptance of cryptocurrencies. Just a few weeks after approval, billions of dollars flowed into these ETFs, underscoring the interest of financial institutions in digital assets.

Wall Street discovers Bitcoin

With the repeal of the SAB-121 rule, US banks can now hold digital assets in custody for clients without having to recognise them as liabilities on their balance sheets This regulation had previously imposed high capital requirements, discouraging many banks from entering the crypto market.

Now, the stage is set: banks can offer custody services, enable Bitcoin-backed loans and integrate digital assets into their treasury strategies. Bank of America has already hinted at wanting to explore blockchain-based payment solutions. There is also growing interest in tokenised securities, which could bring traditional financial products onto the blockchain.

These developments could boost the entire crypto market, driving ever more institutional investors towards investing in digital assets. The competition for innovative financial products underpinned by blockchain technology is gathering pace.

Tough competition for crypto hubs worldwide

The US, home to the world’s largest financial market, is making an aggressive push into the crypto industry. This is having far-reaching consequences: numerous crypto start-ups that until now have had a comfortable home in Europe, Asia or Latin America are now considering moving back to the US.

For Switzerland, which has established itself as a crypto hub, this means increased competition. Should the US create regulatory clarity and attract massive capital inflows, Switzerland could see the edge it currently enjoys blunted. The Swiss Blockchain Federation has already raised concerns: the advantage that Switzerland has gained through the DLT Act is shrinking!

Nevertheless, Switzerland remains an attractive location. FINMA is considered one of the most progressive regulators worldwide, and the country offers a well-established infrastructure for blockchain firms. However, to remain competitive in the long run, Switzerland needs to remain innovative and adapt its regulatory framework accordingly.

Stablecoins: the next big opportunity?

Stablecoins are considered as the bridge between the traditional financial world and digital assets. In the US, several legislative bills are currently being debated that would regulate this segment. Switzerland should act proactively here in order to score points as a stable location for stablecoin issuers.

One example of a missed opportunity: El Salvador has managed to attract Tether, the largest stablecoin issuer. If Switzerland had succeeded here, it could have generated billions in tax revenue. However, Switzerland still has the opportunity to establish itself as a leading centre for regulated stablecoins. This could be achieved through clear regulations and close cooperation with international companies.

Conclusion: Switzerland must stay on the ball

The developments in the US are a wake-up call. The Swiss financial centre was ahead of the curve in adopting blockchain technology and scored points by establishing smart regulations. In order to remain competitive at an international level, it must continue to establish innovative regulatory frameworks that promote collaboration between politicians, businesses and regulators and actively support new use cases such as stablecoins.

Switzerland could also benefit from aligning its existing financial infrastructure even more closely with blockchain technology. Platforms such as SIX Digital Exchange (SDX) and BX Swiss with BX Digital already offer innovative solutions. Looking at developments in the US, one thing is clear: those who act now can play an active role in shaping the future of crypto.

Author: Pascal Hügli

Pascal Hügli, Crypto Investment Manager at Maerki Baumann and founder of Insight DeFi, produces high-quality content on Bitcoin and crypto and contributes to Maerki Baumann's development in the area of blockchain and cryptocurrencies. As a lecturer in digital finance and crypto assets at the HWZ University of Applied Sciences in Business Administration Zurich, he has in-depth expertise in this field, which he is now also applying to the establishment of our new brand "ARCHIP by Maerki Baumann".

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Editorial deadline: 5 February 2025

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Crypto boom in the US: what does it mean for Switzerland?