Legal Bulletins

For much of the past decade, digital assets existed in a state of legal and regulatory limbo. Many businesses interested in the space were mostly risk averse, choosing to wait for clarity. At the same time, regulatory clarity was eschewed in favor of enforcement rather than rulemaking. And institutions largely stayed on the sidelines, uncertain whether digital assets would ultimately integrate into the financial system or remain a speculative detour.

That posture is no longer viable.

In 2025, that uncertainty began to give way to clearer policy, unlocking meaningful institutional engagement. A series of policy, legislative, and institutional developments converged that collectively changed how digital assets are evaluated, structured, and deployed. What emerged is not a free-for-all, but something more durable. Call it a pathway from experimentation to operational reality.

What Actually Changed in 2025?

Policy Moved From Containment to Market Design  

A pivotal moment in 2025 was a definitive shift in U.S. digital asset policy from defensive “regulation by enforcement” toward a focus on market design and regulatory framework building. Early in the year, the White House issued Executive Order 14178, Strengthening American Leadership in Digital Financial Technology, directing federal agencies to propose a coordinated regulatory framework for digital assets, including payment stablecoins and related networks. 

At the same time, Congress advanced bills such as the Digital Asset Market Clarity Act and the Responsible Financial Innovation Act, both aiming to define regulatory roles for digital asset products and intermediaries. 

This shift marks an explicit transition from “Can we do this?” to “What do we need to do it right?”,  a distinction with real operational impact. For many business models, that distinction will determine whether they scale or stall.

What this means for 2026:

Businesses should expect regulators to focus less on threshold questions of legitimacy and more on how products are designed and operated in practice. The inquiry has shifted from whether an activity should exist to whether it is structured in a way that aligns with regulatory expectations. Custody models, disclosure practices, operational controls, and governance frameworks will increasingly determine not only which activities are permissible, but the conditions under which they may be pursue.

Stablecoins Became Core to Payments and Settlement

One of 2025’s most consequential developments was the advancement of stablecoin regulation from a niche issue. Regulators began asking whether these tools are becoming part of the financial system’s core machinery, and if so, what rules must govern their operation? Accordingly, legislation such as the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) was signed into law on July 18, 2025, creating the first comprehensive federal framework for payment stablecoins. 

This federal framework establishes baseline requirements for reserve backing and monthly disclosures, thereby reducing uncertainty about the compliance obligations for issuers and intermediaries. These changes have tangibly shifted market behavior: Visa announced a stablecoin settlement pilot enabling US banks to settle transactions via USDC, with broader deployment anticipated in 2026. 

Clearly, framing stablecoins as payments and settlement infrastructure  rather than speculative instruments  has direct implications for legal and operational risk, including reserve requirements, consumer protections, and partnering with regulated banks.

What this means for 2026:

Stablecoins are increasingly being treated like financial plumbing rather than exotic crypto products, which means success in this space depends on meeting payments-system expectations around controls, disclosures, settlement, and risk management. Consequently, as stablecoins become more a part of the payments conversation, success will depend less on token design and more on whether products meet the legal and operational standards of traditional payment systems.

Tokenization Shifted From Theory to Structuring

Tokenization has been discussed for years. However, in 2025, it began transitioning from academic promise to market-ready application. Regulators and market participants are now focused on how tokenized instruments fit within existing securities, custody, and transfer frameworks, rather than debating their fundamental legitimacy. This alignment is reflected in regulatory interest in financial market infrastructure improvements and tokenized products. 

And institutional behavior now confirms this shift: major financial institutions like JPMorgan have launched tokenized money-market funds, and others, including BlackRock and Goldman Sachs, are exploring tokenized instruments. 

What this means for 2026:

For tokenized offerings, success will increasingly depend on meeting familiar capital markets expectations like investor protections, disclosure practices, transfer restrictions, and viable secondary market mechanics. Sponsors and issuers who approach tokenization with these considerations in mind will be better positioned to attract institutional capital; those who do not should expect greater resistance.

Market Structure Signals Began to Converge

Although comprehensive digital asset market-structure legislation remains unfinished, 2025 delivered notable signals of regulatory convergence around core functions like custody, exchange, brokerage, and settlement. For example, joint SEC–CFTC guidance has addressed how registered venues can facilitate certain crypto products and clarified aspects of trading and custody risk management. 

Simultaneously, bank regulators like the Office of the Comptroller of the Currency clarified that national banks can engage in crypto-asset custody and other digital asset activities without prior approval, signaling broader acceptance of integration between traditional and digital finance. 

What this means for 2026:

If a business functions like a custodian, exchange, broker, or transfer agent, regulators will assess it accordingly regardless of labels. And companies that plan for that reality early will face fewer obstacles than those forced to adjust later under regulatory pressure.

The Real Shift: Policy Is Now a Strategic Variable

Taken together, these developments point to a larger truth:

Digital asset policy is no longer abstract. It is now a core determinant of financing terms, counterparty access, and institutional participation.

What regulators are signaling, through rules, interpretive guidance, and active regulatory frameworks, can already be put into practice. We are seeing that businesses that understand this are not waiting for clarity; they are designing around it.

In this environment, executing with informed legal strategy before regulators demand it is where competitive advantage lies. The real differentiator will be a company’s ability to translate policy engagement into frameworks that support capital formation, and compliance, and invite institutional participation.

What 2026 Will Reward — and Punish

Looking ahead, 2026 will reward companies that:

• Treat compliance as a core business requirement, not an afterthought;
• Align product design with emerging legal and regulatory expectations around custody, control, and disclosure;
• Recognize that institutional participation depends on regulatory and legal clarity, not just novelty.

Conversely, companies that adopt an “ask for forgiveness rather than permission” approach, treating regulation as something to address later, should expect higher costs, delayed launches, forced restructures, and lost partners once scrutiny begins.

A Practical Starting Point

In 2026, any leadership team operating in or around digital assets should be able to answer the following questions today: 

• Which regulatory regimes are most likely implicated by our product or activities?
• How do custody, governance, and control actually operate in practice?
• Would our disclosures withstand institutional diligence today?
• How would a bank, fund, or regulator likely classify what we are doing?
• What assumptions are we making about the timing and scope of future regulatory clarity?

If those answers are unclear, you may already be exposed to real operational, financing, and execution risk.

Our Invitation — and What’s Next

We advise founders, investors, and institutions on structuring digital asset initiatives that align legal requirements with commercial objectives. If you are evaluating a digital asset product, tokenization strategy, or payments application, we can help you identify applicable regulatory pathways and design frameworks institutions are willing to engage with.

For serious market participants, the risk in 2026 will not be regulatory overreach, it will be regulatory misalignment. The rules of the road are taking shape. Companies that understand how the changes of 2025 affect structure, governance, and execution will move forward with options. Those that don’t will spend 2026 catching up likely  under regulatory pressure and with fewer strategic options.
 

Julian A. Haffner
410-576-4021 • jhaffner@gfrlaw.com