Policy window in the cryptocurrency industry: proactively setting rules or waiting for penalties after a crisis

The White House’s Digital Asset Advisory Committee Executive Director Patrick Witt has recently sent a clear signal: the cryptocurrency industry must seize the current political opportunity and actively participate in the formulation of the Market Structure Bill. His core message is straightforward—an industry worth trillions of dollars cannot operate indefinitely without a regulatory framework. Instead of passively responding to potentially crisis-inducing legislation in the future, it is better to engage in rulemaking now.

Why Now Is a Critical Window

Patrick Witt emphasizes that the current political environment is rare for the cryptocurrency industry:

• The White House has a president who supports cryptocurrencies
• Congress is controlled by parties supportive of crypto
• The SEC and CFTC have a relatively friendly regulatory environment

This combination is uncommon in U.S. politics. Historically, the previous administration took a more stringent stance on cryptocurrencies, and this shift itself highlights the scarcity of this window.

Proactive Rulemaking vs. Reactive Response

A key contrast in Patrick Witt’s discussion is:

This comparison explains why Patrick Witt emphasizes the urgency of the timing. Historically, whenever a financial crisis occurs, regulators tend to introduce stricter laws. If the crypto industry waits until the next market crisis to accept regulation, the outcome will likely be much worse than actively participating in negotiations now.

Balancing Compromise and Perfection

When discussing the CLARITY Act, Patrick Witt explicitly states that although the bill may not be perfect, achieving 60 votes in the Senate requires necessary compromises. He stresses that perfection should not hinder the pursuit of excellence.

This reflects a pragmatic political logic: under a democratic system, any bill requires sufficient support votes. For the cryptocurrency industry, a bill that is imperfect but ensures a regulatory framework is better than long-term uncertainty caused by the absence of legislation.

The White House’s Actual Actions

Related information confirms that Patrick Witt also affirmed that the U.S. government’s efforts to establish a “Bitcoin Strategic Reserve” are ongoing. Despite challenges in inter-agency coordination and legal provisions, this matter remains a priority for the government. This indicates that the White House is not only verbally supportive of cryptocurrencies but is also actively advancing related initiatives.

Summary

Patrick Witt’s remarks reflect a deeper reality: the cryptocurrency industry has moved from the fringes to the mainstream and can no longer completely avoid regulation. The key question is not whether a regulatory framework is needed, but who will create it. The current political environment offers a relatively rare opportunity for the industry—to participate in rulemaking under relatively friendly conditions rather than passively accepting punitive legislation after a crisis.

From this perspective, Witt’s call is not about creating urgency but about stating an objective political reality. For the industry, seizing this window may be far more significant than the specific provisions of the bill itself.