The US dollar has long reigned as the world’s primary reserve currency and the default choice for global trade and international transactions. But its dominance is now facing growing scrutiny as shifting geopolitical and economic forces—and concerns over the potential weaponization of the greenback—push more countries to accelerate efforts to loosen their dependence on the dollar.

By almost every measure, the US dollar’s command of the global economy is staggering. Although the country accounts for roughly 25% of global GDP, its currency reigns over nearly  60% of global foreign exchange reserves—far outpacing its nearest rival, the euro. 

But this dominance is increasingly under pressure, with the strategic use of economic sanctions in the past leading some countries to seek alternatives, even as US President Donald Trump regularly threatens 100% tariffs on countries that actively seek to substitute the greenback. 

In Russia, whose access to the SWIFT payment platform is crippled by sanctions, companies have been using cryptocurrencies as a means to skirt restrictions, turning to Bitcoin and other digital assets to conduct cross-border business. While crypto was barred as illegal by the country´s central bank years ago, recent changes to the regulation have paved the way for corporations to embrace cryptocurrencies since late last year.

The country permitted the use of cryptocurrencies in foreign trade and has taken steps to make it legal to mine cryptocurrencies, including Bitcoin.

Bitcoin, sanctions and the push for dedollarization

Since Bitcoin’s inception, crypto advocates have been fixated on “dedollarization,” often described as the push to reduce the US dollar’s dominance as the global reserve currency. The term broadly refers to moving away from the dollar in key financial and trade activities, including oil and commodity transactions (the petrodollar system), foreign exchange reserves, bilateral trade agreements, and investments in dollar-denominated assets.

A 2024 paper by Morgan Stanley’s head of Digital Asset Markets, Andrew Peel, suggested that the rise of digital currencies presents “opportunities to both erode and reinforce” the US dollar’s dominance, with the potential to significantly alter the global currency landscape.

Still, while digital assets—most notably stablecoins— are increasingly gaining traction, the crypto market’s dedollarization expectations look premature.

While Bitcoin is increasingly seen as a strategic reserve asset, experts caution that it’s still too soon to call it a true alternative to the US dollar. Countries like El Salvador have embraced Bitcoin aggressively, with the asset now making up about 15% to 20% of the nation’s total reserves. The US has reportedly considered similar moves, but widespread adoption remains limited, and questions persist about whether such steps would undermine the dollar rather than support it.

According to Bitcoin Depot CEO Brandon Mintz,

“For Bitcoin to become a true alternative to the USD, it would require broader mainstream adoption, clearer regulatory frameworks, and more scalable infrastructure.”

Currently, Bitcoin acts more like a hedge and a store of value than a dollar replacement, but its role could shift as global financial dynamics evolve. Factors like inflation and geopolitical tensions, Mintz said, could drive more interest.

While institutional adoption and cross-border use are on the rise, Mintz said that it remains to be seen “whether Bitcoin can genuinely challenge the dominance of the dollar as this will depend on how these trends develop over time.”

Related: 3 reasons why Bitcoin sells off on Trump tariff news

Despite its growing appeal, Bitcoin’s volatility remains a significant challenge. According to the World Gold Council, Bitcoin exhibits considerably higher volatility than gold and shows a greater correlation with Nasdaq tech stocks than with traditional safe-haven assets.

Gold and major asset 5-year average daily volatility – annualized. Source: World Gold Council.

Eswar Prasad, a trade professor at Cornell University, told Cointelegraph,

“Decentralized cryptocurrencies such as Bitcoin still have highly volatile values, rendering them unsuitable as mediums of exchange or as reserve currencies.”US dollar global foreign reserves decline

Since the end of World War II, the US dollar has reigned as the world’s dominant currency, powering around 88% of global trade transactions in 2024.

The dollar’s status as the leading international currency is well-established. According to the International Monetary Fund, as of the third quarter of 2024, central banks held about 58 percent of their allocated reserves in US dollars—much of it in cash and US bonds. This is significantly higher than the euro, second in the race, which accounts for as much as 20% 

Allocated foreign exchange reserves by central banks. Source: International Monetary Fund  

While the US dollar remains the dominant global currency due to its stability, widespread acceptance in international trade and finance, and status as a key reserve asset for central banks, there are signs that its reign may be waning. The percentage of global foreign reserves held in dollars has diminished from over 70% in the early 2000s to below 60%.

Percentage of global FX reserves held in US dollars. Source: International Monetary Fund

The turning point came after February 2022 when the US froze $300 billion of Russia’s liquid foreign exchange reserves held in the US and NATO countries. While many US allies backed the move, it also sent shockwaves through global markets, highlighting the risk that Washington could weaponize the dollar against not just adversaries but potentially allies whose policies clash with American interests.

Citing the use of sanctions and how sanctioned countries react, an International Monetary Fund blog post in 2024 said,

“We have found that financial sanctions when imposed in the past, induced central banks to shift their reserve portfolios modestly away from currencies, which are at risk of being frozen and redeployed, in favor of gold, which can be warehoused in the country and thus is free of sanctions risk.” Do stablecoins actually reinforce dollarization?

Despite efforts by BRICS+ nations to counteract US dollar dominance, the dollar’s value has remained strong in recent years. The US Dollar Index is up roughly 8% over the past five years.

In the crypto sector, stablecoins have emerged as some of the fastest-growing digital assets, often cited as a potential solution for cross-border transactions. However, most stablecoins are still pegged to the US dollar.

Currently, the stablecoin market cap stands at $233 billion, with US-pegged stablecoins such as Tether’s USDT dominating 97% of the sector, according to CoinGecko data.

This overwhelming reliance on USD-backed stablecoins suggests that rather than undermining dollar dominance, digital assets may actually reinforce it. “With USD-linked stablecoins at the core of this digital ecosystem, we have a unique chance to extend US financial influence globally—if policymakers act now,” Cody Carbone, president of Digital Chamber, a US-based blockchain advocacy association, said on X.

The emergence and widespread adoption of central bank digital currencies (CBDCs) could disrupt some cryptocurrencies, particularly stablecoins, by providing efficient and low-cost digital payment alternatives.

“A widely accessible digital dollar would undercut the case for privately issued stablecoins, though stablecoins issued by major corporations could still have traction,” said Prasad.

Still, Prasad emphasized that no viable alternative is poised to displace the US dollar as the dominant global reserve currency. 

“The dollar’s strengths lie not just in the depth and liquidity of US financial markets but also in the institutional framework that underpins its status as a safe haven.”

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Thomas John Sfraga, also known as “TJ Stone,” received 45 months in prison for wire fraud and was ordered to pay more than $1.3 million in forfeiture as part of a scheme targeting crypto investors.

In a March 14 notice, the US Justice Department said Sfraga was sentenced in the US District Court for the Eastern District of New York (EDNY) for wire fraud following a May 2024 guilty plea. Court filings stated that the influencer and podcaster claimed he was the owner of businesses — including Vandelay Contracting, a name based on a running joke from the television series Seinfeld — and the emcee of many crypto events in New York City.

“[…] Sfraga convinced a victim to invest in a fictitious cryptocurrency ‘virtual wallet,’” said the Justice Department. “He promised the victims returns on their investments as high as 60% in three months. In reality, however, Sfraga used the money entrusted to him by the victims for his own benefit, to pay expenses, and to pay earlier victims and business associates.”

Sfraga’s case was one of many involving crypto-related crimes continuing to be pursued in the jurisdiction following the appointment of John Durham as interim US Attorney by President Donald Trump. Braden John Karony, former CEO of SafeMoon, who also faces EDNY criminal charges, requested in February that his criminal trial for securities fraud conspiracy, wire fraud conspiracy and money laundering conspiracy be pushed based on the administration’s approach to crypto enforcement. 

The “Seinfeldian” scheme, according to Durham, was not the first time the crypto industry was connected to the popular sitcom. Comedian Larry David, co-creator of the show, starred in a Super Bowl ad for defunct cryptocurrency exchange FTX in 2022. He later said he was “an idiot” for endorsing the company and lost a lot of money after the price of specific tokens dropped.

Related: Why comedian TJ Miller wants to be a trustworthy face for Bitcoin

Since Trump took office on Jan. 20, some high-profile defendants in criminal cases involving cryptocurrency have reportedly been looking into appealing to the US president for a pardon. Among those reportedly seeking pardons were former FTX CEO Sam Bankman-Fried, currently serving a 25-year sentence following a 2023 conviction, and former Binance CEO Changpeng Zhao, who served a four-month sentence in 2024 — though he denied reports of a potential pardon.

Magazine: Crypto fans are obsessed with longevity and biohacking: Here’s why

In the first three months of his presidency, Donald Trump has ignited trade tensions by announcing tariffs on Canada, Mexico, and China and the result has been unexpected turmoil in US and global markets.

The fallout from the tariffs has been relatively swift, and the impact has been felt across the crypto market. As of March 8, the US president had backed away from some plans to impose tariffs on certain Mexican and Canadian goods—another twist in the rollercoaster of US trade policy that continues to shake markets.

Singapore crypto trading firm QCP Capital said in a note. “This week’s crypto markets have been nothing short of a roller coaster. With macro conditions in flux, crypto remains tightly linked to equities, with price action reflecting broader economic shifts.”

The wild swings underscore the volatility ahead for cryptocurrencies—often seen as high-risk assets—as the Trump administration tests the limits of economic and foreign policy and serves as a cautionary tale as uncertainty pervades markets. 

In a post on X, former US Treasury Secretary Lawrence Summers said that […] tariff policy has already taken $2 trillion off the value of the US stock market,” and Summers suggested that these measures were “ill-conceived” and that they would undermine US competitiveness.

“No wonder Wall Street’s fear gauge is up by one-third.”

Volatility index (VIX) price action. Source: Yahoo! Finance.

While tariffs and Trump’s market-moving policy announcements may create a sense of impending doom, their impact on the future of the crypto sector remains in question. If a trade war weakens the US dollar through inflation, Bitcoin could actually benefit, says Eugene Epstein, head of trading and structured products at Moneycorp. Investors fleeing depreciating fiat currencies may turn to crypto, and if tariff-hit nations devalue their currencies in response, Bitcoin could serve as a vehicle for capital flight.

Unlike traditional markets, Bitcoin trades 24/7 and reacts instantly to macroeconomic shifts, making it highly vulnerable to risk-off sentiment. “Sentiment-wise, the primary drivers of crypto will continue to be the status of a federal crypto reserve as well as overall risk sentiment. If US equities continue falling it is hard to envision a strong crypto market, at least in the near term,” Epstein said.

Many in the crypto community expected Trump’s return to the White House to send Bitcoin soaring, and initially, it did—rising from $69,374 on Election Day to a record $108,786 by Inauguration Day. But since then, BTC has tumbled, dropping below $80,000 by late February and again in March. The price weakness comes despite the administration’s pro-crypto stance, including plans for a strategic crypto reserve and market-structure reforms.

Cumulative flows into Bitcoin Spot ETFs reached record highs following Trump’s victory, with investors pouring over $10 billion into these instruments in the aftermath of the election, according to data by Farside Investors. However, growing concerns over a potential tariff war seem to have taken a toll on market sentiment and, by extension, on cryptocurrencies.

Since early February, Bitcoin ETFs have seen significant outflows as uncertainty looms over the broader economic landscape. At the same time, safe haven assets like gold, have actually responded positively amid the tariff war.

Spot Bitcoin ETF flows. Source: Farside Investors.

This isn’t the first time President Trump has wielded tariff threats as a bargaining chip and some traders believe the market will adjust to focus on fundamentals over the blunt use of tariffs as a way to force policy changes among US allies.

That’s why some traders in the industry choose to not base their strategies solely on tariffs. For Bob Wallden, head of Trading at Abra, tariffs are “just a headline” that influences short-term investor sentiment but doesn’t alter the market’s fundamental conditions.  

“To me, tariffs are a red herring. It is something Trump uses as a bargaining chip, and I do not think they mean anything to crypto. They initially caused a drawdown—tariffs caught a market that was long at the top and over-leveraged looking for an exciting move—but that was a correlation, not the causation.” 

Related: 3 reasons why Bitcoin sells off on Trump tariff news

Wallden points to Trump’s fiscal austerity program as the real driver of crypto markets.

“That is what everyone’s looking at in the TradFi space. Tariffs are just another piece in the fiscal austerity trade that’s happening across global markets—that is actually what’s influencing crypto a lot more, as fiscal austerity means less cash out there to deploy.”

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bolivia’s state-owned energy firm YPFB is planning to use cryptocurrency to pay for energy imports, according to a March 13 report from Reuters. The move comes as the South American nation faces a shortage of foreign currency reserves and a dwindling supply of domestic gas production.

A spokesperson for YPFB said that a system had been put in place to use cryptocurrency to purchase energy imports after the government approved the use of digital assets to meet the country’s demand. While YPFB has not used the system yet, it plans to do so.

The report does not reveal what cryptocurrency will be used for the payments. Stablecoins, which are digital assets pegged to fiat currency, are often used to make cross-border transactions, though it is unclear if that will be the case in Bolivia.

The fuel shortage in Bolivia has led to protests and the threat of strikes among some of the nation’s workers, including farmers, who say the lack of fuel threatens their summer harvest. Only 35%–50% of the country’s public transport system is functional. Alejandro Gallardo, the energy and hydrocarbons minister, said there are challenges due to foreign currency shortages.

The spokesperson for YPFB noted that the new purchasing system was designed to support national fuel subsidies in the country amid the shortage of foreign currency. “From now on, these (cryptocurrency) transactions will be carried out,” they said.

Related: Vibe killers: Here are the countries that moved to outlaw crypto in the past year

Crypto adoption in Bolivia increases

In June 2024, Bolivia’s central bank, Banco Central de Bolivia, lifted its ban on Bitcoin (BTC) and crypto payments, allowing financial institutions to transact with digital assets. The ban had been in place since 2014.

In September 2024, Bolivia reported a 100% rise in virtual asset trading, with roughly $15.6 million worth of assets traded on a monthly basis between July and September. The $48.6 million traded was largely made up of stablecoins. Stablecoins are often used in developing countries whose local currency has experienced a high degree of devaluation or where there’s a shortage of foreign currency.

Related: Stablecoins will see explosive growth in 2025 as world embraces asset class

Stablecoin use gained further momentum in Bolivia in October 2024 when local bank Banco Bisa introduced a stablecoin custody service. That service, which was supported by the country’s financial regulator, allows the nation’s residents to buy, sell and trade Tether’s USDt (USDT), a US dollar-pegged stablecoin.

Cointelegraph wrote in September 2016 that Bolivia had much to gain from adopting cryptocurrencies. At that time, much of that country’s citizens were unbanked, with just 11% of residents using a debit card to make payments and only 5% using credit cards. However, the country continued upholding its ban until 2024, calling crypto a pyramid scheme in May 2017 and arresting crypto advocates.Magazine: Bitcoin payments are being undermined by centralized stablecoins

Bitcoin (BTC) circled $83,000 at the March 14 Wall Street open as traders set out requirements to flip bullish.

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

BTC price RSI teases key “bullish divergence”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining up to 5% on the day before consolidating.

A characteristic lack of momentum at the start of the US trading session persisted, with risk assets still wary of macroeconomic and geopolitical surprises, notably in the form of US trade tariffs.

Assessing the current status quo on the daily BTC/USD chart, popular trader and analyst Rekt Capital reported increasing odds of a bullish divergence playing out on the relative strength index (RSI) metric.

Here, RSI should make higher lows as the price forms lower lows to indicate waning seller dominance.

“Promising early-stage signs of a Bullish Divergence developing,” he wrote in one of the day’s posts on X.

“Reclaiming the previous lows of $84k could set price up to further build out this Bull Div.”

BTC/USD 1-day chart with RSI data. Source: Rekt Capital/X

Another post flagged a key horizontal resistance line currently under attack from bulls.

“Bitcoin continues to Daily Close below the blue resistance. However, each rejection from this resistance appears to be weakening in terms of follow-through to the downside,” Rekt Capital commented.

“If this weakening in the resistance persists… This should open up the opportunity for BTC to finally Daily Close above this $84k resistance, reclaim it as support, and finally trend continue to the upside.”

BTC/USD 1-day chart with RSI data. Source: Rekt Capital/X

Keith Alan, co-founder of trading resource Material Indicators, meanwhile focused on the 21-day and 200-day simple moving averages (SMAs). At the time of writing, these stood at $83,740 and $86,800, respectively.

“BTC is poised to make another run at reclaiming the 200-Day MA, but it will only count if we get a sustained close above it, AND it is closely followed by an R/S Flip at the 21-Day MA,” an X post on the topic read.

BTC/USD 1-day chart with 21, 200SMA. Source: Cointelegraph/TradingView

Alan referenced one of Material Indicators’ proprietary trading tools, calling for an increase in “bullish momentum.”

“Notice how Trend Precognition’s A1 Slope line is showing a developing momentum shift,” he commented alongside a corresponding chart. 

“Reverting from downward momentum is step 1. We need to see an increase in bullish momentum from here, with bids moving higher to stage a sustainable rally.”

BTC/USD 1-day chart. Source: Keith Alan/X

Gold leaves Bitcoin in the dust

Elsewhere, the S&P 500 saw some welcome relief at the open after dropping 10% from its latest all-time highs to officially begin a technical correction.

Related: Bitcoin panic selling costs new investors $100M in 6 weeks — Research

Meanwhile, gold set new record highs of over $3,000 per ounce as investors sought shelter from turbulent macro conditions.

As Cointelegraph reported, Bitcoin broke a key long-term trendline against gold as its relative underperformance in 2025 became all the more visible.

XAU/USD 1-day chart. Source: Cointelegraph/TradingView

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

REX Shares, an exchange-traded fund (ETF) provider with over $6 billion in assets under management (AUM), launched its Bitcoin (BTC) Corporate Treasury Convertible Bond (BMAX) ETF that invests in the convertible bonds of companies with a BTC corporate reserve strategy.

According to the March 14 announcement, the ETF will purchase the convertible notes of companies such as Strategy. Convertible notes are commercial paper that can be converted into equity at a predetermined rate if an investor chooses.

Typically, these convertible bonds are purchased by institutional investors, including pension funds, some of which specialize in convertible note investing. Greg King, CEO of REX Financial, said:

“Until now, these bonds have been difficult for individual investors to reach. BMAX removes those barriers, making it easier to invest in the strategy pioneered by Michael Saylor — leveraging corporate debt to acquire Bitcoin as a treasury asset.”

Investing in convertible bonds, ETFs and the equity of companies such as Strategy, MARA and Metaplanet provides investors with indirect exposure to Bitcoin that removes the technical barrier to entry and self-custodial risks of holding BTC directly.

Strategy co-founder Michael Saylor, who popularized corporate Bitcoin treasuries, speaks about the merits of BTC. Source: Cointelegraph

Related: Michael Saylor’s Strategy to raise up to $21B to purchase more Bitcoin

Strategy a proxy Bitcoin bet for institutional investors

Institutional investors may lack the technical sophistication to hold BTC directly or have legal or fiduciary constraints preventing them from investing in digital assets.

At least 12 US states currently hold Strategy stock as part of their state pension funds and treasuries. Collectively, these states hold over $271 million in Strategy stock using current market prices.

The list comprises Arizona, California, Colorado, Florida, Illinois, Louisiana, Maryland, North Carolina, New Jersey, Texas, Utah and Wisconsin.

California’s State Teachers’ Retirement Fund and its Public Employees Retirement System hold $67.2 million and $62.8 million in Strategy stock, respectively.

Strategy’s Bitcoin purchases in 2025. Source: SaylorTracker

According to SaylorTracker, Strategy currently holds 499,096 BTC, valued at over $41.4 billion, making the company one of the largest corporate BTC holders in the world — eclipsing the US government’s estimated 198,000 BTC.

Strategy’s most recent Bitcoin purchase occurred on Feb. 24, when the company acquired 20,356 BTC for nearly $2 billion.

Magazine: ‘China’s MicroStrategy’ Meitu sells all its Bitcoin and Ethereum: Asia Express

Opinion by: Kadan Stadelmann, chief technology officer, Komodo Platform

The Crypto Task Force held a press conference in early February 2025. It struck the wrong tone. While the task force gave lip service to regulatory clarity, the goal seemed to placate the crypto industry, not bring about change that empowers individuals. 

On Jan. 23, the president established a working group for digital assets to propose a federal regulatory framework around issuing and operating digital assets, including stablecoins and a Bitcoin reserve. These goals must be expanded upon, and it seems they are, as the development of a strategic reserve is now underway.

Instead of perpetuating the same discussion on “regulatory clarity” that the industry has been having with officials for years, the task force should take a similar approach to crypto matters as the Department of Government Efficiency (DOGE), which has been working in feverish haste to cut federal agencies and programs that it has deemed wasteful.

What the force should do

Instead, the Crypto Task Force should expose the perils of central bank inflationary money that puts humanity on a neverending treadmill toward desperation. It should cultivate a spirit of competition and adopting decentralized, permissionless currencies. 

The Task Force should persuade lawmakers to adopt a laissez-faire crypto structure while effectively stamping out the rampant fraud by the truly bad actors who exploit people’s false hopes of quick riches. The Crypto Task Force should put out press releases warning people about obvious scams. It should also teach people the virtues of proof-of-work and the follies of many proof-of-stake coins. 

The goal of Trump’s crypto task force should be simple: Establish a freedom-focused growth trajectory for the crypto industry in the US without delay. 

The freedom age 

Trump has clarified that he wants to promote the responsible growth and use of crypto. Such recommendations only hold as much merit as they grant entrepreneurs the freedom to take risks and curtail massive corporations from rolling out a digital panopticon with centralized cryptocurrencies. 

Recent: SEC task force continues meeting with firms over crypto regulations

If the US is to be competitive with countries like the United Arab Emirates, the US must create a regulatory sandbox that enables founders to develop technology — including controversial technologies like decentralized coin mixers — in legal gray areas without the fear of prison or jail time so long as they are not blatantly breaking pre-existing law. 

It’s time to let the market decide

Before Trump was elected, US crypto founders contended with seemingly arbitrary Securities and Exchange Commission witch hunts, which have ensnared even the most respected crypto institutions, such as Coinbase and Kraken. The SEC went after Ripple for issuing an alleged unregistered security, but Ripple enjoyed significant wins in that case, especially when selling tokens to institutions. Countless founders have been de-banked in the US for having founded even crypto-adjacent companies. That suggests there has been an all-out war by Washington and big banks against the industry. That has to end, and the damage that has been done must be repaired. The Crypto Task Force cannot protect big banks against crypto. It must let the market decide.

Although many suits have been dropped, lawmakers have their work cut out for them. So much has changed since the 20th century, when the US was a world leader in the development of the internet. It has fallen far behind in crypto. 

What the US needs now is innovation, not crypto red tape. The world has Anti-Money Laundering (AML) and Know Your Customer (KYC) laws. The Crypto Task Force mustn’t waste time developing a separate set of AML and KYC laws. Instead of studying the feasibility of a Bitcoin reserve, just put the Bitcoin confiscated from Ross Ulbricht, founder of the Silk Road, under the management of the Treasury and call it a day instead of selling it. 

The Crypto Task Force must work now to build a renewed spirit of technological innovation in the United States. Countries in Asia have demonstrated a higher level of participation at the retail level. The US needs a strategy to educate and empower the retail investing public to partake in exciting and new markets like blockchain and AI. The US must switch from a conservative approach to crypto toward a progressive approach akin to what we’ve seen in the UAE.

The US has already suffered a brain drain, as entrepreneurs have left to pursue opportunities in friendlier jurisdictions. If the US had developed a welcoming Bitcoin approach, El Salvador could have never attracted talent from the US.

Too much freedom has already been lost in the US. The Trump administration must unleash the crypto-anarchists with the enthusiasm of DOGE in the spirit of some of the US’s greatest freedom thinkers, like Henry David Thoreau and others.

Long ago, the US fell behind in the crypto arm’s race. It will take work to catch up, and the more radical the approach taken by the Crypto Task Force, the quicker the gap can be closed.

If it doesn’t, you can bet we crypto-anarchists will be storming the gates. 

Opinion by: Kadan Stadelmann, chief technology officer, Komodo Platform.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Opinion by: Kadan Stadelmann, chief technology officer, Komodo Platform

The Crypto Task Force held a press conference in early February 2025. It struck the wrong tone. While the task force gave lip service to regulatory clarity, the goal seemed to placate the crypto industry, not bring about change that empowers individuals. 

On Jan. 23, the president established a working group for digital assets to propose a federal regulatory framework around issuing and operating digital assets, including stablecoins and a Bitcoin reserve. These goals must be expanded upon, and it seems they are, as the development of a strategic reserve is now underway.

Instead of perpetuating the same discussion on “regulatory clarity” that the industry has been having with officials for years, the task force should take a similar approach to crypto matters as the Department of Government Efficiency (DOGE), which has been working in feverish haste to cut federal agencies and programs that it has deemed wasteful.

What the force should do

Instead, the Crypto Task Force should expose the perils of central bank inflationary money that puts humanity on a neverending treadmill toward desperation. It should cultivate a spirit of competition and adopting decentralized, permissionless currencies. 

The Task Force should persuade lawmakers to adopt a laissez-faire crypto structure while effectively stamping out the rampant fraud by the truly bad actors who exploit people’s false hopes of quick riches. The Crypto Task Force should put out press releases warning people about obvious scams. It should also teach people the virtues of proof-of-work and the follies of many proof-of-stake coins. 

The goal of Trump’s crypto task force should be simple: Establish a freedom-focused growth trajectory for the crypto industry in the US without delay. 

The freedom age 

Trump has clarified that he wants to promote the responsible growth and use of crypto. Such recommendations only hold as much merit as they grant entrepreneurs the freedom to take risks and curtail massive corporations from rolling out a digital panopticon with centralized cryptocurrencies. 

Recent: SEC task force continues meeting with firms over crypto regulations

If the US is to be competitive with countries like the United Arab Emirates, the US must create a regulatory sandbox that enables founders to develop technology — including controversial technologies like decentralized coin mixers — in legal gray areas without the fear of prison or jail time so long as they are not blatantly breaking pre-existing law. 

It’s time to let the market decide

Before Trump was elected, US crypto founders contended with seemingly arbitrary Securities and Exchange Commission witch hunts, which have ensnared even the most respected crypto institutions, such as Coinbase and Kraken. The SEC went after Ripple for issuing an alleged unregistered security, but Ripple enjoyed significant wins in that case, especially when selling tokens to institutions. Countless founders have been de-banked in the US for having founded even crypto-adjacent companies. That suggests there has been an all-out war by Washington and big banks against the industry. That has to end, and the damage that has been done must be repaired. The Crypto Task Force cannot protect big banks against crypto. It must let the market decide.

Although many suits have been dropped, lawmakers have their work cut out for them. So much has changed since the 20th century, when the US was a world leader in the development of the internet. It has fallen far behind in crypto. 

What the US needs now is innovation, not crypto red tape. The world has Anti-Money Laundering (AML) and Know Your Customer (KYC) laws. The Crypto Task Force mustn’t waste time developing a separate set of AML and KYC laws. Instead of studying the feasibility of a Bitcoin reserve, just put the Bitcoin confiscated from Ross Ulbricht, founder of the Silk Road, under the management of the Treasury and call it a day instead of selling it. 

The Crypto Task Force must work now to build a renewed spirit of technological innovation in the United States. Countries in Asia have demonstrated a higher level of participation at the retail level. The US needs a strategy to educate and empower the retail investing public to partake in exciting and new markets like blockchain and AI. The US must switch from a conservative approach to crypto toward a progressive approach akin to what we’ve seen in the UAE.

The US has already suffered a brain drain, as entrepreneurs have left to pursue opportunities in friendlier jurisdictions. If the US had developed a welcoming Bitcoin approach, El Salvador could have never attracted talent from the US.

Too much freedom has already been lost in the US. The Trump administration must unleash the crypto-anarchists with the enthusiasm of DOGE in the spirit of some of the US’s greatest freedom thinkers, like Henry David Thoreau and others.

Long ago, the US fell behind in the crypto arm’s race. It will take work to catch up, and the more radical the approach taken by the Crypto Task Force, the quicker the gap can be closed.

If it doesn’t, you can bet we crypto-anarchists will be storming the gates. 

Opinion by: Kadan Stadelmann, chief technology officer, Komodo Platform.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

The decentralized finance (DeFi) industry is breathing a sigh of relief as Congress relaxes reporting obligations, but questions remain about how lawmakers will regulate DeFi.

On March 12, the House of Representatives voted to nullify a rule that required DeFi protocols to report gross proceeds from crypto sales, as well as info on taxpayers involved, to the Internal Revenue Service (IRS). 

The rule, which the IRS issued in December 2024 and wasn’t set to take effect until 2027, was regarded by major industry lobby groups as burdensome and beyond the agency’s authority. 

The White House has already signaled its support for the bill. President Donald Trump is ready to sign when it reaches his desk. But DeFi observers note that the industry has yet to strike a balance between privacy and regulation. 

Bipartisan vote on repealing the rule. Source: DeFi Education Fund

Privacy concerns over IRS DeFi rule

The crypto industry was quick to laud the vote in the House. Marta Belcher, president of the Filecoin Foundation, said that blocking the rule was particularly important for user privacy. 

She told Cointelegraph it is “critical to protect people’s ability to transact directly with each other via open-source code (like smart contracts and decentralized exchanges) while remaining anonymous, in the same way that people can transact directly with each other using cash.”

Privacy concerns were central to the crypto industry’s objections to the rule, with industry observers claiming that it was not fit for purpose and infringed on user privacy. 

Bill Hughes, senior counsel and director of global regulatory matters for Consensys Software wrote in December 2024, “Trading front ends would have to track and report on user activity — both US persons and non-US persons […] And it applies to the sale of every single digital asset — including NFTs and even stablecoins.”

The Blockchain Association, a major crypto industry lobby group, stated that the rule was “an infringement on the privacy rights of individuals using decentralized technology” that would push DeFi offshore.

While the rule has been stopped for now, there still aren’t fixed privacy guidelines in place — something Etherealize CEO Vivek Raman said the industry needs to move forward. 

“There needs to be clear frameworks for blockchain-based privacy while maintaining [Know Your Customer/Anti-Money Laundering] requirements,” he told Cointelegraph.

Raman stated that some transactions and customer data will need to remain private, “and we need guidance on what privacy can look like.”

How do you regulate DeFi?

The crypto space has long juggled user privacy demands and regulators’ Anti-Money Laundering and Know Your Customer concerns. 

One problem lies in the technology itself — if a network is created by many and controlled by no single entity, who can the government contact? 

Per Raman, “It’s hard for a decentralized protocol that is controlled by nobody to issue 1099s or fulfill broker-dealer responsibilities! Companies can certainly be [broker-dealers], but software has not been designed for [broker-dealer] rules.”

DeFi developers can and have been proactive in working with regulators, Chainalysis suggested, as was the case with certain protocols freezing funds after the disastrous $285 million KuCoin hack. 

Related: Timeline: How Bybit’s lost Ethereum went through North Korea’s washing machine

Cinneamhain Ventures partner and consultant Adam Cochran claimed that every protocol has certain pressure points regulators could press on if a protocol were used to commit a crime:

Source: Adam Cochran

However, these specific instances do not make a comprehensive regulatory framework that both the industry and investor protection agencies can point to. 

In that regard, crypto analytics firm Chainalysis stated in 2020 that regulators may need to craft regulations for the DeFi space with decentralized reporting limitations in mind. 

Raman suggested that one possible solution could be zero-knowledge proofs, which allow users to confirm certain data without revealing it. 

He is optimistic about regulators’ ability to find a way to regulate the space while still maintaining user privacy: “I think we’ll see a positive sum environment where DeFi and compliance will coexist.”

The long-awaited crypto regulatory framework 

Trump has already made a number of pro-crypto measures through executive orders and appointing pro-crypto individuals to head parts of his administration — the most recent being the establishment of a strategic Bitcoin reserve. 

Related: US Rep. Byron Donalds to introduce bill codifying Trump’s Bitcoin reserve

The pro-crypto tenure of important financial regulators like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) has dropped a number of high-profile enforcement cases against crypto firms.

While notable, the big fish that the crypto industry is waiting for is the crypto regulatory framework and stablecoin bills circulating in Congress, which would give the industry the guardrails it claims it needs to thrive. 

On March 13, the Senate Banking Committee approved the GENIUS Act, the stablecoin bill, putting it one step closer to a vote on the Senate floor. 

The crypto framework bill, FIT 21, was first introduced in the 2024 legislative session, ultimately failing in the Senate. However, in February, House Financial Services Committee Chair French Hill said that he anticipated the bill could pass in this session with “modest changes.”

But even if FIT 21 were passed soon, regulations for DeFi could be far off. The bill would exclude DeFi from SEC and CFTC oversight, but it would also establish a working group to research 12 key areas related to DeFi.

This study will seek to understand the risks and benefits of DeFi and will ultimately make regulatory recommendations. 

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The cryptocurrency market has faced a significant downturn since the start of 2025, with some investors calling it the most painful cycle in history.

Some were disappointed about industry policy changes and the memecoin craze in the United States, while others even speculated about talent leaving the sector for other industries.

However, while the current crypto market state might look grim to some, the current cycle is far from being the most brutal on record, and many community members remain bullish.

“For those who have been through multiple cycles, this is just part of the process,” Trezor analyst Lucien Bourdon told Cointelegraph.

The post-Trump inauguration sale

The current decline in crypto markets came after Bitcoin (BTC) reached an all-time high above $106,000 in December 2024, with the spike largely attributed to optimism around Donald Trump’s victory in the US presidential election.

While many were optimistic, some investors, such as BitMEX co-founder Arthur Hayes, accurately predicted a crypto sell-off following Trump’s inauguration on Jan. 20.

Bitcoin price chart since October 2024. Source: CoinGecko

Since then, Bitcoin has tumbled more than 18%, with the total crypto market capitalization erasing almost all gains that came from Trump’s election win, dropping 25%.

In the post-Trump inauguration sale, investors offloaded about $4.6 billion from crypto exchange-traded products by March 7, while the spot market saw even more outflows, with at least $1 billion in liquidations in a single day on March 3.

What was the most brutal crypto sell-off in history?

But the most recent sell-off is not the worst on record. “If we’re talking about the worst Bitcoin cycle, 2014–2015 was possibly the most brutal,” Trezor’s Bourdon told Cointelegraph.

Referring to the collapse of the Mt. Gox crypto exchange, which suffered an 850,000 BTC loss in a security breach in 2024, the analyst highlighted the event as the worst Bitcoin sell-off on record. 

Bitcoin price chart in the period from July 2013 to July 2016. Source: CoinGecko

“The Mt. Gox collapse wiped out 70% of Bitcoin’s trading volume, leading to an 85% drawdown in a market with no institutional support and far less liquidity,” Bourdon said.

More than just falling prices

According to Brett Reeves, head of BitGo’s European sales, there is a “great deal more to just falling pieces” in the current market.

In addition to bigger price downturns in the past, Reeves highlighted notable advancements in global crypto products and regulation, which point to crypto assets increasingly becoming integral to the international financial system. He said:

“While prices may be crashing for now, we must remember how far we’ve come in a short space in time and just how much potential this space has in the years ahead.”

Contrary to crypto doubters and pessimists, some industry executives even see the current market cycle as a bull market.

Related: EU retaliatory tariffs threaten Bitcoin correction to $75K — Analysts

“I actually think it’s the best,” Quantum Economics founder Mati Greenspan told Cointelegraph, adding:

“What sets this bull market apart from previous crypto bull runs is that it’s the first time we’ve seen prices rising over time that is not accompanied by copious money printing. This pullback is a short-term pain that will enable long-term gain.”

According to crypto analyst Miles Deutscher, terms like “bull market,” “bear market,” “cycle,” or “altseason” are not even suitable for the current market situation.

Source: Miles Deutscher

“This is a different market now,” he said in an X post on March 13.

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