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The crypto industry just had its biggest regulatory shift in history, and 2025 changed everything.

Tedd Huff and Robert Musiala break down how the SEC completely reversed course, the Genius Act passed at lightning speed, and stablecoins exploded from $205 billion to $308 billion in market cap.

You'll learn why the SEC declared most crypto assets are not securities, how banks got the green light to offer crypto custody services, and what the $9 trillion daily transaction volume really means for the future of payments.

The Genius Act created the first federal stablecoin framework, but it also banned yield payments and imposed strict reserve requirements. DeFi got legitimized, NFTs got legal clarity, and crypto-native firms started filing for bank charters.

If you're building in crypto, investing in blockchain, or trying to understand where regulation is headed in 2026, this breaks down the exact moves that matter and what comes next.

Tedd Huff, CEO of fintech advisory firm Voalyre and host of Fintech Confidential, sits down with Fintech Confidential CI (Confidential Informant) Robert Musiala, Partner and co-leader of Baker Hostetler's Web3 and Digital Assets team, to unpack what happened in 2025 that changed everything about how the United States regulates cryptocurrency.

The conversation cuts through surface-level news coverage to examine why these shifts occurred, what they mean for different market participants, and how businesses should respond. For years, companies operating in crypto faced enforcement-first regulation that made it nearly impossible to plan ahead or invest with confidence.

The SEC used lawsuits and enforcement actions as their primary regulatory tool, leaving businesses to guess whether their products would be classified as securities months or years after launch. Banks that wanted to offer crypto custody services received no clear guidance about what was permitted.

Stablecoin issuers operated in a gray area, unsure whether federal frameworks would eventually classify their products as securities, commodities, or something else entirely. This uncertainty kept institutional capital on the sidelines, forced companies to spend millions on legal analysis, and prevented mainstream adoption of digital asset infrastructure.

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The stablecoin market alone tells the story of what happens when regulatory clarity arrives. Market capitalization exploded from $205 billion in January 2025 to $308 billion by December, a 50% increase in a single year.

Transaction volumes hit $9 trillion daily by year's end, dwarfing traditional payment processors and proving that demand existed all along. These aren't projections or speculation; they're measured outcomes that occurred once businesses understood the rules they needed to follow. Circle's IPO in June validated what many suspected: stablecoins had moved from experimental technology to core financial infrastructure, and the market responded accordingly.

Robert shares evidence that the changes are structural, not superficial. The SEC made a groundbreaking declaration that most crypto assets are not securities, dismantling years of legal ambiguity with a single statement. The OCC issued explicit guidance allowing national banks to provide cryptocurrency custody and exchange services.

The Genius Act became law in July, creating the first comprehensive federal framework for stablecoin issuers. These weren't minor policy adjustments; they were foundational decisions that defined how entire asset classes would be treated under securities law. Others experienced what Rob describes as a lightbulb moment when they realized the barriers that kept them from entering crypto markets had been removed. Banks that spent years avoiding digital assets filed applications for custody services within weeks of the OCC guidance.

Crypto-native firms began filing for OCC national trust bank charters, seeking the credibility and regulatory certainty that comes with being a chartered institution. The convergence works both ways: traditional banks launched their own dollar-backed tokens, with France's largest bank introducing a US dollar stablecoin and SoFi launching an institutional stablecoin in December.

The Genius Act provides the regulatory framework that many enterprises needed before committing to stablecoin operations. Robert breaks down the key provisions in detail on Baker Hostetler's Blockchain Monitor, including reserve requirements, attestation standards, and revenue model implications.

The legislation accomplished something more valuable than flexibility: it gave businesses a clear playbook for operating legally.

Companies can now build revenue models around transaction fees and bundled products with confidence that their approach aligns with federal requirements. [Read the full analysis of the Genius Act provisions here: [https://www.bakerlaw.com/insights/a-new-era-for-the-stablecoin-industry-the-genius-act/]

Tedd and Robert discuss practical steps for businesses interested in exploring crypto opportunities without overhauling their entire operations. The advice centers on experimentation at a manageable scale. Major regulatory changes happened every single month in 2025, from January's executive order through December's CFTC updates. Companies operating in this space discovered that annual planning cycles were insufficient; quarterly reviews couldn't keep pace. The speed of regulatory development forced businesses to shift to monthly reviews and rapid response frameworks just to stay current. This reality means businesses need to test, learn, and adapt rather than waiting for perfect clarity that may never arrive.

The involvement of major financial institutions signals that crypto has moved from experimental technology to standard infrastructure. When banks that avoided digital assets for years suddenly filed applications for bank charters and Custody services, it demonstrated that the risk calculation had changed. When crypto-native firms started seeking traditional banking charters, it showed that both sides recognized the value of convergence. The NFT market got its breakthrough moment when a federal court ruled that Bored Ape NFTs were not securities, providing legal clarity the entire sector had been waiting for. The Ripple case concluded with XRP cleared of being classified as a security, sending the token up 11% to $3.27 and removing years of uncertainty.

Regulatory concerns haven't disappeared entirely, but the conversation has shifted from whether crypto can exist within legal frameworks to how different products fit into those frameworks. The SEC stopped using enforcement actions as their primary regulatory tool and started issuing guidance documents and no-action letters instead. They addressed liquid staking products in August, confirming that properly structured staking services wouldn't automatically trigger securities laws. In September, they provided clarity on how businesses could operate stablecoin platforms without running afoul of existing regulations. This methodological shift represents a complete reversal from the adversarial approach that had defined the previous administration.

Robert and Tedd examine where regulation might be headed over the next few years. Tax clarity arrived in November when the IRS and Treasury issued comprehensive guidance that resolved years of uncertainty around crypto taxation. This wasn't minor technical clarification; it was the foundational guidance that accountants and tax professionals had been requesting since 2017. The impact will show up in 2026 tax filings when businesses and individuals can finally report crypto activities with confidence that their treatment aligns with IRS expectations. Traditional financial services companies and crypto firms will forge more partnerships because neither side can ignore the other anymore. Banks bring regulatory expertise and customer trust; crypto companies bring technical capability and speed to market.

Robert shares advice for companies building in this space: understand the specific problem you're solving and make sure your solution delivers measurable value within the new regulatory framework. The market doesn't need more complexity or speculative products; it needs tools that work within clear legal boundaries and provide genuine efficiency improvements. Companies that focus on solving real pain points rather than chasing trends will find more success as the regulatory environment stabilizes and mainstream adoption accelerates.

Three main takeaways emerge from this discussion. The Genius Act legitimized decentralized finance by creating clear rules for stablecoin operations, giving companies that waited for regulatory clarity the green light to move forward. The SEC's shift from enforcement-first regulation to guidance documents and no-action letters means businesses can seek clarity proactively rather than waiting for lawsuits to define the rules. Regulatory changes happened every month in 2025, requiring companies to shift from annual or quarterly planning cycles to monthly reviews and rapid response frameworks.

The practical focus of this conversation makes it valuable for anyone involved in treasury management, compliance, financial operations, or strategic planning at companies considering crypto opportunities. Rather than theoretical discussions about what blockchain might enable someday, Tedd and Robert examine what changed in 2025, why those changes matter, and how businesses can respond to a regulatory environment that finally provides the clarity the industry has needed for years. The message is direct: the framework exists, the rules are defined, and early movers are already capturing benefits that make their operations faster, more efficient, and better positioned for a market where digital assets are standard infrastructure rather than experimental technology.

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The Genius Act passed both houses of Congress and became law in July, creating the first comprehensive federal framework for stablecoin issuers and digital asset operations in the United States. The legislation established clear guidelines for reserve requirements, attestation standards, and operational rules that legitimized the entire stablecoin industry. This watershed moment gave businesses the regulatory clarity they had been waiting years to receive, unlocking institutional capital and triggering a wave of new market entrants.

The Ripple case concluded with XRP cleared of being classified as a security, sending the token up 11 percent to $3.27. Years of uncertainty ended in a single decision that validated what the company had argued from the beginning.

The SEC Chair made the most consequential statement of 2025 when declaring that most crypto assets are not securities. This single announcement dismantled years of legal uncertainty and cleared the path for institutional money to flood into cryptocurrency markets with confidence.

The OCC issued interpretive letter 1184 in May, explicitly allowing national banks to provide cryptocurrency custody and exchange services. This removed the final barrier preventing traditional financial institutions from entering the crypto space at full scale.

Stablecoin market capitalization surged from $205 billion in January to $308 billion by December 2025. This wasn't gradual growth; it was a massive expansion that proved stablecoins had become essential financial infrastructure rather than experimental technology.

A federal court ruled in October that Bored Ape NFTs were not securities, providing legal clarity the entire NFT industry had been waiting for. Trading volumes jumped immediately as platforms gained certainty about how to operate without regulatory risk.

Transaction volumes hit $9 trillion per day by the end of 2025, completely dwarfing traditional payment processors. The scale of movement through stablecoin networks reached levels that made even the largest credit card companies look small by comparison.

Crypto-native companies began filing for OCC national trust bank charters in November, seeking the credibility and regulatory certainty that comes with being a chartered institution. The move showed how far the industry had come from its anti-establishment roots.

SoFi launched a national stablecoin in December, joining France's largest bank and dozens of other traditional financial institutions racing to capture market share. The competition intensified as everyone realized stablecoins were no longer optional but essential to future revenue.

Traditional financial services companies and crypto firms will forge more partnerships in 2026 as neither side can afford to ignore the other. Banks need the technical capability and speed crypto companies offer while crypto firms want the regulatory expertise and customer trust banks bring.

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The Genius Act became law in July 2025, creating the first federal framework for stablecoin issuers with strict reserve requirements and no yield payments allowed. If your business involves payments, treasury management, or financial services, evaluate how stablecoins fit your strategy now that clear operating rules exist. Regulatory uncertainty is gone; operational clarity arrived.

OCC interpretive letter 1184 issued in May explicitly allows national banks to provide cryptocurrency custody and exchange services. If you've been waiting for regulatory permission to explore crypto custody for corporate treasury or client services, schedule conversations with your banking partners about their new capabilities, insurance coverage, and compliance frameworks.

Stop using annual or quarterly planning for crypto initiatives. Assign someone to monitor SEC, OCC, CFTC, and IRS updates monthly and brief leadership on implications. Regulatory changes happened every single month in 2025, from January's executive order through December's CFTC updates, and will continue accelerating in 2026.

Federal courts ruled in October that Bored Ape NFTs are not securities, and the SEC Chair declared in August that most crypto assets aren't securities either. If your business involves digital collectibles, loyalty programs, tokenized assets, or blockchain-based products, consult legal counsel to understand how these groundbreaking rulings apply to your specific use case.

France's largest bank, SoFi, and dozens of institutions launched stablecoins in 2025 while crypto-native firms filed for OCC bank charters in November. This convergence means both traditional financial institutions and crypto companies are competing in the same markets. Track which competitors or potential partners in your sector are making moves to avoid being caught off guard by rapid market shifts.

LinkedIn: https://www.linkedin.com/in/robert-musiala/ 

Baker Hostetler: https://www.bakerlaw.com/people/robert-musiala 

Blockchain Monitor: https://www.blockchainmonitor.com/

Website: https://www.bakerlaw.com/

Web3 & Digital Assets Team: https://www.bakerlaw.com/practices/web3-digital-assets

Legal Resources: https://www.bakerlaw.com/insights

GENUIS ACT Write up: https://www.bakerlaw.com/insights/a-new-era-for-the-stablecoin-industry-the-genius-act/ 

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Robert Musiala is a Partner and co-leader of Baker Hostetler's Web3 and Digital Assets team, one of the most comprehensive legal practices serving the blockchain and cryptocurrency industry. As lead author of the Blockchain Monitor blog, Robert provides weekly analysis of the latest trends, regulatory developments, and legal implications in the crypto space. His expertise spans digital asset compliance, regulatory strategy, and emerging technology law, making him a trusted advisor to fintech companies, blockchain startups, and traditional financial institutions navigating Web3 integration.

Baker Hostetler is a leading U.S. law firm with over 900 attorneys providing comprehensive legal services across multiple practice areas. Their Web3 and Digital Assets team represents one of the largest and most experienced blockchain legal practices in the country, serving clients from early-stage startups to Fortune 500 companies entering the digital asset space.

Tedd Huff is the Founder of Voalyre and Diamond D3, professional services consulting firms focused on global payments and marketing. He is also a video podcast host and executive producer on the Fintech Confidential network.

Over the past 25+ years, he has contributed to FinTech startups as an Advisory Board Member, Co-Founder, and Chief Experience Officer, providing strategic and tactical direction for global companies, focusing on growth while delivering innovation, process improvements, and user experience-driven value to simplify the complexity of payments.

A media creation, management, and production company delivering engaging content globally, specializing in fintech and Web3 storytelling that makes complex topics accessible to business leaders and industry professionals.