SEC Chair Discusses Innovation Exemption for Digital Assets

NEW YORK — The Securities and Exchange Commission (SEC) is working to formalize an “innovation exemption” that would allow companies to develop digital assets and innovative technologies in the U.S. Chair Paul Atkins indicated that this could happen as early as the end of the current quarter.

Atkins acknowledged that the ongoing government shutdown has “hamstrung” the SEC’s rulemaking progress but stressed that finalizing the exemption remains a top priority for the end of this year or the first quarter of 2026. He made these comments at a Futures and Derivatives Law Report event hosted by Katten Muchin Rosenman LLP in Manhattan.

During his remarks, Atkins reiterated his commitment to being a pro-innovation agency. He referred to cryptocurrency as “job one” and noted the detrimental impact of the past four years on the industry, which has caused a shift of innovation overseas rather than fostering it in the U.S.

The SEC aims to begin formal rulemaking for cryptocurrencies by the end of 2025, contingent on the government shutdown’s resolution. “We’ll see where that goes, but I have confidence we’ll be able to do it,” he commented.

This initiative would represent a shift from previous regulation-by-enforcement methods to a more structured approach. After the event, Atkins expressed hope of expediting the exemption to create a welcoming environment for innovators, preventing them from fleeing to foreign jurisdictions.

Atkins also highlighted Congressional efforts toward cryptocurrency legislation, including the stablecoin-focused GENIUS Act, although he noted that the SEC was not heavily involved with this bill. He optimistically spoke of the importance of market structure issues, even as different panels expressed skepticism about the bill’s prospects before the end of 2025.

The GENIUS Act has begun to yield preliminary results, with the Treasury Department publishing proposed rules for the stablecoin sector. Industry experts anticipate a surge in innovation and usage of these technologies, with examples like Visa integrating USDC currently in development. Mersinger noted stablecoin use could expand in various financial applications.