Weekly Crypto Regs Roundup: SEC Mulls Innovation Exemption, Lummis Backs Bitcoin Tax Break

The crypto regulation environment for digital assets in the ￰2￱ evolving rapidly, with policymakers balancing technological development and investor protection ahead of the 2026 election ￰3￱ week’s developments mark a major shift toward mainstreaming crypto within traditional finance—from Washington’s proposed “innovation exemption” for blockchain startups to North Dakota’s state-backed stablecoin and Senator Cynthia Lummis’s renewed push for tax reform on everyday Bitcoin ￰4￱ Eyes “Innovation Exemption” to Keep Builders Onshore ￰5￱ and Exchange Commission (SEC) Chair Paul Atkins confirmed that the agency is finalizing an “innovation exemption” framework intended to support crypto firms experimenting with blockchain applications inside the United ￰6￱ measure, expected by the end of 2025, would offer a regulated sandbox for blockchain startups, allowing them to test products under limited oversight rather than relocating to friendlier jurisdictions.

“Atkins said this remains a top priority despite the government shutdown,” CoinDesk reported. “We want innovators to feel welcome here so they don’t flee to foreign jurisdictions,” he ￰7￱ adopted, the exemption could provide a clear pathway for blockchain firms to innovate within the ￰8￱ facing immediate enforcement risks—a long-standing concern for the crypto ￰9￱ view the move as a strategic response to international competition, as jurisdictions such as the EU, UAE, and Singapore have already implemented comprehensive digital asset ￰10￱ Dakota Launches the “Roughrider Coin”—A State-Backed Stablecoin In a move that could redefine state-level participation in digital finance, North Dakota has announced plans to launch the “Roughrider Coin” in 2026 through the Bank of North Dakota, the nation’s only state-owned ￰11￱ in partnership with fintech firm Fiserv, the stablecoin will be fully backed by ￰12￱ and primarily used for interbank transactions, such as loan settlements and construction ￰13￱ Dakota’s initiative follows Wyoming’s Frontier Stable Token, launched earlier this year, positioning the two states at the forefront of integrating blockchain into public financial ￰14￱ leveraging distributed ledger technology, the Roughrider Coin seeks to make financial transactions between local banks faster, more secure, and less reliant on traditional payment ￰15￱ observers say the project could serve as a blueprint for other ￰16￱ exploring tokenized money systems, especially as Washington debates the future of central bank digital currencies (CBDCs).

Senator Lummis and Jack Dorsey Unite on Bitcoin Tax Reform Meanwhile, Senator Cynthia Lummis (R-WY) is advancing legislation inspired by Jack Dorsey, the founder of Block and a vocal Bitcoin advocate, to exempt small Bitcoin transactions from capital gains ￰17￱ proposed “de minimis” exemption would exclude purchases under $300—up to $5,000 annually per taxpayer—from IRS reporting ￰18￱ on ￰19￱ this is of interest to you, please tell your Senators/House member! ￰0￱ — Cynthia Lummis (@CynthiaMLummis) October 9, 2025 The measure would make Bitcoin more practical for day-to-day payments, removing one of the biggest obstacles to crypto’s mainstream adoption.

“Working on it,” Lummis confirmed on X, pointing out her ongoing collaboration with ￰20￱ initiative revives her earlier Digital Asset Tax Fairness Act, which stalled earlier this year, and aligns with broader Republican efforts to reduce regulatory friction for digital ￰21￱ Becomes a Voter Issue Ahead of 2026 A new poll from McLaughlin & Associates and The Digital Chamber shows that 64% of voters now consider a candidate’s stance on crypto “very important” in shaping their ￰22￱ results indicate a growing bipartisan interest in digital assets, with most investors favoring Republicans to lead crypto policy ￰23￱ POLL: McLaughlin poll finds crypto voters are swing voters, and real policy actions can move their ￰24￱ More: ￰1￱ ￰25￱ — The Digital Chamber (@DigitalChamber) October 8, 2025 Three-quarters of respondents said they support the Trump administration’s rollback of Biden-era enforcement actions on digital assets, reflecting a shift in public sentiment toward lighter regulation and innovation-led ￰26￱ crypto regulation deepens, digital assets are evolving from niche financial tools to a defining political ￰27￱ federal agencies, state governments, and lawmakers now aligned on expanding blockchain’s role in the economy, 2025 may mark the year the ￰28￱ closing the gap between regulation and innovation.