Lowenstein Crypto advises main digital asset and cryptocurrency tasks, exchanges, and buying and selling companies. Our apply covers regulatory recommendation, transactions and structuring recommendation, investigations, and adversarial issues together with business disputes, chapter, and associated litigation. As these markets proceed their speedy progress and market members proceed to evolve and mature their companies, we’re offering this weekly digest as a useful resource that highlights and summarizes a choice of key latest authorized regulatory developments.
Trump Orders Federal Reserve To Assessment Crypto and Fintech Entry to Cost Rails
On May 19, President Donald Trump signed an government order titled “Integrating Monetary Expertise Innovation into Regulatory Frameworks,” directing federal monetary regulators to determine inside three months any guidelines or supervisory practices that “unduly impede fintech companies from coming into into partnerships with federally regulated establishments” and inside six months to take steps encouraging innovation because of the overview. The order particularly asks the Federal Reserve Board of Governors to overview the way it permits uninsured depository establishments and nonbank monetary companies to entry fee accounts and companies, and it asks the 12 Federal Reserve Banks whether or not they can act independently of the board to grant such accounts. If the regional Federal Reserve Banks are confirmed to have unbiased authority, equally located particular function depository establishments and the Workplace of the Comptroller of the Foreign money (OCC)-chartered crypto belief banks might successfully store for a sympathetic regional Fed department slightly than wait on the board. The manager order is offered here.
U.S. Lawmakers Reintroduce Digital Asset PARITY Act
On May 20, Reps. Max Miller (R-Ohio) and Steven Horsford (D-Nev.) reintroduced the Digital Asset PARITY Act, the most recent bipartisan try to replace how the Inside Income Code treats digital belongings. Drawing on the December 20, 2025 dialogue draft, the invoice (i) establishes a tax framework for regulated fee stablecoins in order that on a regular basis stablecoin fee transactions don’t set off acquire-recognition or third-celebration tax reporting; (ii) clarifies supply-of-revenue guidelines for digital asset buying and selling to offer certainty for U.S. and overseas market members; (iii) extends present securities-lending tax guidelines to digital belongings in order that bona fide crypto lending transactions are usually not handled as taxable gross sales; (iv) expands the wash-sale rule beneath Part 1091 to digital belongings and to notional principal contracts and derivatives referencing digital belongings, disallowing losses on gross sales the place considerably an identical belongings are acquired inside 30 days earlier than or after—with the PARITY model making use of prospectively to tax years starting after enactment; (v) reserves a bit for software of the constructive-sale guidelines beneath Part 1259 to digital belongings; (vi) permits mark-to-market elections for digital asset merchants and sellers; (vii) creates an elective framework for staking and mining rewards, treating rewards as revenue however allowing deferral of taxation to deal with liquidity and “phantom revenue” issues on the level of receipt; and (viii) modernizes charitable contribution guidelines by distinguishing extremely liquid digital belongings from speculative or illiquid tokens to stop abuse whereas supporting reputable giving. The invoice additionally delegates focused regulatory authority to the Treasury to stop abuse whereas decreasing administrative burdens. The December 2025 dialogue draft is offered here, and Miller’s press launch on the underlying framework is offered here.
South Carolina Enacts Digital Asset and Anti-CBDC Statute
On May 19, Gov. Henry McMaster signed S. 163, a complete cryptocurrency invoice including a brand new Chapter 47 to Title 34 of the South Carolina Code. The statute (i) prohibits any governing authority within the state from accepting or requiring fee utilizing central financial institution digital foreign money (CBDC) or collaborating in a CBDC check or pilot; (ii) affirms the correct of people and companies to make use of digital foreign money for transactions; (iii) bars disparate tax therapy of digital belongings, requiring that digital-foreign money transactions be taxed solely on the identical foundation as transactions denominated in U.S. authorized tender; (iv) imposes zoning, electrical-grid, and Public Service Fee data-reporting necessities on digital asset mining companies; and (v) supplies protections for digital asset mining operations and “mining as a service” suppliers. The invoice textual content is offered here.
Minnesota Authorizes State-Chartered Banks and Credit score Unions To Present Crypto Custody
On May 15, Gov. Tim Walz (DFL) signed HF 3709, making Minnesota the primary Midwestern state to enact a unified legislative framework allowing state-chartered banks and credit score unions to offer regulated digital asset custody companies starting August 1, 2026. The legislation authorizes state-chartered banks to offer digital asset custody in both a fiduciary or a non-fiduciary capability and permits credit score unions to function in a custodial non-fiduciary capability, expressly defining custody companies to incorporate the safekeeping, controlling, or managing of digital belongings and their cryptographic personal keys. Establishments should present 60 days’ advance written discover to the Minnesota commissioner of commerce detailing inner danger-administration and cybersecurity frameworks earlier than launching companies. The identical day, Walz signed SF 3868, a bipartisan invoice imposing a statewide ban on digital foreign money automated teller machines and kiosks efficient August 1. HF 3709 is offered here, and SF 3868 is offered here.
Sen. Warren Presses OCC on Nationwide Belief Charters for Crypto Corporations
On May 19, Senate Banking Committee Rating Member Elizabeth Warren (D-Mass.) despatched a letter to Comptroller of the Foreign money Jonathan Gould demanding a proof for the OCC’s grant of nationwide belief financial institution charters to no less than 9 crypto companies since December 2025. Warren argued that the chartered companies “are successfully crypto banks that wish to evade the elemental safeguards and obligations that include being a financial institution,” pointing to enterprise plans that, in her view, ponder non-fiduciary custodial actions, funds and lending facilitation, and stablecoin operations “carefully associated to deposit-taking” slightly than the fiduciary belief actions a nationwide belief constitution is designed to authorize. She framed the OCC’s strategy as “regulatory arbitrage” that conflicts with the Nationwide Financial institution Act and creates dangers to customers, banking-system security and soundness, and the separation of banking and commerce. Warren requested the OCC to provide by June 1, 2026, full constitution purposes for all 9 authorized companies; the authorized analyses supporting every approval; and any communications between OCC officers and President Trump or members of his household regarding the constitution approvals, a reference she has beforehand tied to the pending constitution observe for World Liberty Monetary. Warren’s press launch saying the letter is offered here, and the complete letter to Gould is offered here.
Financial institution of England and FCA Set Out UK Tokenization and Stablecoin Imaginative and prescient
On May 18, the Financial institution of England and the Monetary Conduct Authority (FCA) issued a joint name for enter setting out a shared imaginative and prescient for tokenization in UK wholesale monetary markets and searching for public suggestions on the place present guidelines and infrastructure help or constrain the secure use of distributed ledger expertise. Along with the decision for enter, the financial institution’s Prudential Regulation Authority issued a letter confirming that tokenized conventional belongings ought to typically obtain the identical prudential therapy as their non-tokenized equivalents—no matter whether or not they’re issued on permissionless blockchains—supplied the authorized rights conferred are an identical and the underlying dangers are comparable. The financial institution additionally revealed a parallel session on extending the settlement hours of its Actual-Time Gross Settlement and Clearing Home Automated Cost System applications towards steady operation. The financial institution signaled it should take into account eligibility of tokenized belongings (together with the deliberate Digital Gilt Instrument) as central financial institution collateral and can set out its coverage issues in Q3 or This fall 2026.
The subsequent day, on May 19, Financial institution of England Deputy Governor for Monetary Stability Sarah Breeden elaborated on this imaginative and prescient, describing a “multi-cash system” combining conventional financial institution deposits, tokenized financial institution deposits, regulated stablecoins, and doubtlessly a retail central financial institution digital foreign money. Breeden introduced that the financial institution plans to publish draft guidelines for systemic stablecoins subsequent month and to finalize them by yr-finish, and she or he signaled that the financial institution might impose short-term limits on the entire quantity of stablecoins that may be issued to mitigate early adoption dangers. The FCA and the Financial institution of England joint press launch is offered here, the complete textual content of Breeden’s speech is offered here, and the FCA’s Progressing Fund Tokenisation Coverage Assertion is offered here.
European Fee Opens MiCA Assessment Session
On May 20, the European Fee opened a public and focused session on whether or not Regulation (EU) 2023/1114 on markets in crypto-belongings (MiCA), which grew to become totally relevant on December 30, 2024, “stays match for function” in mild of the continued evolution in digital asset markets and a considerably modified international regulatory panorama. The session, open by means of August 31, runs on two parallel tracks—a public session for people and a focused session for companies, monetary establishments, regulators, and business our bodies—and covers MiCA’s core constructing blocks, together with the foundations for crypto-asset issuers, asset-referenced tokens, e-cash tokens, and crypto-asset service suppliers. The session lands forward of the July 1, 2026 expiration of nationwide transitional regimes beneath Article 143(3). The focused session doc is offered here, and the fee’s announcement is offered here.
