Regulatory Clarity and Institutional Adoption: The Changing Face of Digital Assets
The convergence of meaningful policy progress and growing institutional interest is creating unprecedented momentum in the digital-asset space. That theme dominated a recent fireside chat at Avalanche Summit London, where @BaylorMyers of @BitGo and John Darcy of SkyBridge Capital unpacked how new rules in Washington are reshaping the road map for blockchain adoption.
From Washington Gridlock to Rule-Making Mode
Just a few years ago, crypto lobbyists struggled to find receptive ears on Capitol Hill. “We have seen a seismic shift in sentiment among policymakers in Washington since my time there from 2017 to 2021,” said Meyers, who previously served at the U.S. Treasury.
Evidence of that shift is everywhere:
- SEC pivots to formal rule-making: New chair Paul Atkins has instructed the agency to draft crypto rules through notice-and-comment procedures rather than high-profile enforcement sweeps—a signal that predictable guardrails may finally replace regulation by lawsuit.
- The Digital Asset Market Clarity Act gains traction: The bipartisan bill would split oversight between the SEC and CFTC and, crucially, define when a token can “morph” from a security into a commodity.
- Banking regulators soften their stance: In April, the Federal Reserve, FDIC, and OCC withdrew previous guidance that had effectively discouraged banks from touching digital assets, opening a clearer path for custody and stablecoin services.
- Mortgage giants green-light crypto collateral: The FHFA has directed Fannie Mae and Freddie Mac to recognize verified crypto holdings in mortgage underwriting—an unprecedented nod to the asset class inside a cornerstone of U.S. finance.
Meyers believes this wave of clarity is only the beginning. “By mid-2026 we’re going to have such a solid foundation in the U.S.—ideally no one is talking about regulation anymore. We all understand the rules of the road.”
Institutional Capital Waits for the “Starting Gun”
Darcy’s view from SkyBridge’s $3 billion portfolio mirrors that optimism; having roughly 70% of their assets being now tied to digital-assets. “Everyone’s just waiting for that starting gun to be fired off—clear sets of rules around what can be tokenized, what they can invest in, what the tax implications are,” he said.
Stablecoins sit at the heart of that thesis. BitGo, which administers about $100 billion in customer assets, has rolled out “Stablecoin as a Service” after powering World Liberty Financial’s USD1 launch. Darcy called it another volley in “stablecoin wars heating up in a significant way,” noting Anchorage’s recent acquisition of Mountain Protocol as proof that incumbents are jockeying for market share.
Custody: The Bedrock of Trust
Both speakers stressed that investor protection hinges on robust custody. “Custodial activity should be segregated from exchange activity. Had that occurred, there may never have been an FTX downfall,” Meyers argued. Darcy agreed, recalling that weak custody options once kept SkyBridge on the sidelines: “For institutional capital flows, those safeguards have to be in place universally.”
With the Fed’s softened guidance and the SEC’s shift toward clear custody requirements, many of those safeguards are starting to crystallize. That, in turn, could unlock the next wave of tokenization, consolidation, and public listings. Galaxy’s debut on Nasdaq, they said, is merely the first domino.
The Avalanche Advantage
Darcy closed with a prediction that Avalanche’s design choices—high throughput, rapid finality, and native Layer 1s—position it well for the emerging regulatory order. He pointed out that Avalanche’s consensus architecture can settle thousands of transactions in a fraction of a second, a speed ceiling that accommodates everything from retail payments to high-frequency trading.
Just as important, its Layer 1 model lets builders spin up dedicated, application-specific blockchains that can enforce their own KYC/AML rules, geographic restrictions, or data-privacy settings without compromising the security of the wider network.
That flexibility is resonating with institutions that need to square tokenization ambitions with evolving compliance mandates. Darcy summed it up this way: “Avalanche has kept its head down and continued to build in a responsible, institutional way—offering the rails, tooling, and regulatory opt-ins that big capital requires. In the next wave of digital-asset adoption, Avalanche is going to be a huge part of that.”
To hear the entire conversation—including audience Q&A and deeper dives into stablecoin legislation—watch the full Avalanche Summit London panel here: https://t.co/K9a4uPDrQb
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