Wyoming Launches Stablecoin, SEC Chair Discusses Tokenization and Congress Eyes Market Structure Legislation

There were significant crypto developments at both the state and federal levels. In Wyoming, the Frontier Stable Token (FRNT) officially launched on mainnet, making the state the first public entity in the United States to issue a blockchain-based stable token. On Capitol Hill, momentum for digital asset market structure legislation continued to build even during the recess. Senator Cynthia Lummis (R-WY) stated that the goal remains to have a market structure bill on the President’s desk before year-end, with Senate Banking aiming to advance the legislation in September and Senate Agriculture following in October.

SEC Chair Paul Atkins discussed the launch of Project Crypto, aimed at bringing U.S. markets on-chain and reshoring crypto offerings. The SEC also announced the appointment of Judge Margaret Ryan as Director of the Division of Enforcement, effective September 2. At the CFTC, Commissioner Kristin Johnson announced her departure effective September 3, leaving the agency with only Acting Chair Caroline Pham until a new chair is confirmed. Meanwhile, the Department of Justice clarified that developers of neutral, decentralized software should not face new criminal charges solely for publishing code that automates peer-to-peer transactions, absent criminal intent.

Together, these developments underscore the evolving policy landscape as lawmakers press forward on market structure legislation and federal agencies recalibrate enforcement approaches.

Congressional Updates

Congressional Momentum Builds for Market Structure Legislation

• On August 20, at the Wyoming Blockchain Symposium, Senator Cynthia Lummis (R-WY) stated that digital asset market structure legislation is expected to reach the President’s desk before the end of the year. The goal is to have a bill reported out of the Senate Banking Committee by the end of September, followed by consideration in the Senate Agriculture Committee in October. Senate Banking Chairman Tim Scott (R-SC) added that he estimates “between 12 and 18 Democrats” are open to supporting a market structure bill, signaling growing bipartisan support.

Defense Bill Includes Ban on Central Bank Digital Currency

• On August 21, the revised version of the 2026 National Defense Authorization Act (H.R. 3838) was released and included language stating: “A Federal reserve bank may not … issue a central bank digital currency, or any digital asset that is substantially similar under any other name or label.” The language, which mirrors that in the Anti-CBDC Surveillance State Act (H.R. 1919), has an increased chance of becoming law now that it has been added to the NDAA, which is must-pass legislation. The House Rules Committee will vote on the NDAA in September, but this does not guarantee that the Anti-CBDC Surveillance State Act language will make the final cut of the bill.

Regulatory Agency Updates

SEC Chair Speaks at the Wyoming Blockchain Symposium

• On August 19, SEC Chair Paul Atkins discussed the launch of Project Crypto, aimed at bringing U.S. markets on-chain and reshoring crypto offerings. He highlighted the SEC’s flexibility as an agency and its use of exemptive authority. Atkins emphasized that tokens themselves are not necessarily securities, with the determination depending on the broader package of rights and how the token is offered and sold.

The Federal Reserve Speaks at the Wyoming Blockchain Symposium

• On August 20, Federal Reserve Board Governor Christopher Waller gave a speech on technological advancements in payments, stating that the Fed is conducting research on innovations like tokenization, smart contracts and AI in payments and is engaging with innovators in the private sector to understand these innovations.
• On August 19, Federal Reserve Vice Chair for Supervision Michelle Bowman gave a speech on embracing innovation, stating their approach should consider allowing Federal Reserve staff to hold de minimus amounts of crypto or other types of digital assets so they can achieve a working understanding of the underlying functionality.

Department of Justice Indicates Refusal to Prosecute DeFi Software Developers

• On August 21, in a speech at the American Innovation Project Summit, Acting Assistant Attorney General Matthew Galeotti stated that, “where the evidence shows that software is truly decentralized and solely automates peer-to-peer transactions, and where a third party does not have custody and control over user assets, new 1960(b)(1)(C) charges against the third-party will not be approved. Though, if criminal intent is present, other charges may be appropriate.”
• Galeotti continued: “Generally, developers of neutral tools, with no criminal intent, should not be held responsible for someone else’s misuse of those tools. If a third-party’s misuse violates criminal law, that third-party should be prosecuted — not the well-intentioned developer.”

SEC Names Judge Margaret Ryan as Director of the Division of Enforcement

• On August 21, the SEC announced that Judge Margaret Ryan has been named Director of the Division of Enforcement, effective September 2. Judge Ryan is a senior judge of the United States Court of Appeals for the Armed Forces. She was nominated to the court in 2006 by President George W. Bush, was confirmed by the United States Senate and served the entirety of her term through July 2020. She reached senior status in August 2020. Judge Ryan currently is a lecturer on military law and justice at Harvard University Law School. She was a visiting professor at Notre Dame Law School and lecturer at The George Washington University Law School.

Commissioner Kristin Johnson Announces Departure From CFTC

• On August 26, CFTC Commissioner Kristin Johnson released a farewell press release as her last day at the agency approaches on September 3. This will leave the CFTC with only Acting Chairman Caroline Pham, who has announced she will leave the agency after President Trump’s nominee assumes the role.

CFPB Delays Compliance Dates for Open-Banking Rule

• On August 21, the CFPB said it intends to extend the compliance dates for banks as they rewrite the Biden-era open-banking rule. In a request for public feedback, the CFPB is seeking comments on how the Personal Financial Data Rights Rule (PFDR Rule) should be revised. The PFDR Rule was scheduled to go into effect on June 30, 2026, until the CFPB announced on July 29 that they would be rewriting the rule.

State Regulatory Updates

Wyoming Launches Pioneering State-Issued Stable Tokens

• On August 19, the Wyoming Stable Token Commission announced the mainnet launch of the Frontier Stable Token (FRNT). This move marks Wyoming as the first public entity in the United States to issue a blockchain-based stable token. The Frontier Stable Token will be fully backed by U.S. dollars and short-duration treasuries, held in trust for the benefit of token holders. FRNT fortifies its stability with a legislatively mandated remit to achieve 2% overcollateralization. FRNT leverages blockchain technology with the goal to offer instant transaction settlement, reduced fees and enhanced accessibility for all users.

Industry Group Updates

Finance Industry Groups Call for Updates to Global Cryptoasset Standard

• On August 19, various financial services trade associations requested that the Basel Committee on Banking Supervision temporarily pause implementation of the Cryptoasset Exposures chapter (SCO60) (the Cryptoasset Standard) of the Basel framework in order to (i) seek updated information concerning the use cases of distributed ledger technology and (ii) consider any appropriate redesign and recalibration of the Cryptoasset Standard to account for recent and ongoing developments in global cryptoasset markets. The letter stated that the Cryptoasset Standard’s restrictive qualification standards, combined with otherwise punitive market and credit risk capital treatments, effectively make it uneconomical for banks to meaningfully participate in the cryptoasset market.

Crypto Industry Groups Oppose Associations’ Letters

• On August 19, the Blockchain Association and the Crypto Council for Innovation sent a letter to the Senate Banking Committee opposing two letters submitted to the Committee by a diverse set of organizations. The crypto industry groups argued that the organizations’ proposed changes to the GENIUS Act would stifle innovation, competition and consumer choice. The organizations’ letters focused on (i) the need to eliminate a perceived loophole in the GENIUS Act created by Section 16(d) for certain state chartered non-depository entities and (ii) the need to further rein in the ability of digital asset service providers to offer interest or yield to incentivize the holding of payment stablecoins. The crypto industry groups oppose both efforts.