3 reasons crypto will win in America

Just in the past month, there have been three changes that will define American crypto and decentralized finance for the next decade. 

The Department of Labor rescinded its crypto 401(k) guidance:
The Department of Labor’s decision to rescind its prior guidance concerning crypto in 401(k) plans opens a substantial new channel for capital flow into the industry. The previous guidance imposed burdens on fiduciaries, openly discouraging crypto exposure in retirement vehicles. This reversal signals a broader acceptance of digital assets within traditional financial frameworks in the US.

The SEC dismissed its Binance.US lawsuit:
The SEC’s voluntary dismissal of its lawsuit against Binance.US represents a shift in enforcement philosophy, moving away from the expansive interpretations of what constitutes a security in the digital asset space. The decision signals the end of what many believed to be the politically-motivated targeting of a legitimate U.S. exchange in order to harm the otherwise unreachable global entity that shares its name.

The GENIUS Act provided a regulatory framework for stablecoins:
The escalating momentum behind legislation like the GENIUS Act, designed to establish a clear regulatory framework for stablecoins, represents meaningful progress. This provides clarity for stablecoins and their underlying payment infrastructure to integrate securely within the U.S. financial system. 

We’ve seen first-hand from our own portfolio companies—ForUsAll, Binance.us, BCB Group—how the shift in regulatory posture has fueled their momentum. Put simply, there’s never been a better time for innovative projects to root themselves firmly within the U.S. 

As investors who have been partnering with entrepreneurs in the space for over a decade, we’re no strangers to hyperbolic claims about the future of crypto. But for the past several years, crypto entrepreneurs in the U.S. have been fighting against the wind. It’s hard enough to build a thriving business on top of a product that the world desperately wants—as our portfolio companies OpenSea, Stacks, and Solana have all done—never mind having to navigate the headwinds created by politically-motivated obstructionists and saboteurs.  

Despite these impediments, crypto entrepreneurs have remained committed to decentralized technology’s transformative power. The industry continued to build, demonstrating an unwavering commitment to the core value proposition crypto delivers.

Now, the winds have shifted. We’ve entered a new era for crypto innovation in America, one in which decentralized innovation is welcomed. In the country that values innovation and economic liberty, entrepreneurs can finally build with wind in the sails. 

A Call to U.S. based Crypto Founders

For entrepreneurs building in crypto, these changes mark an inflection point. At Foundation Capital, we’re excited to back the accelerating wave of U.S.-based crypto innovation, particularly in areas poised to capitalize on these new conditions, such as:

• Crypto-Native Mobile Experiences: Beyond traditional securities, we anticipate a revolution in mobile crypto interactions. With regulatory clarity, the ability to transact crypto tokens directly within mobile operating systems will transform clunky web-based interfaces into seamless native experiences. This unlocks vast potential for new forms of commerce and user interaction.
• Finance & RWA Tokenization: The path is clearer for compliant stablecoin applications, refined DeFi protocols integrated with traditional financial services, and the expansion of Real World Assets (RWA) tokenization, encompassing everything from debt instruments to intellectual property.
• Decentralized Infrastructure: The receding threat of overreaching classification empowers builders of core decentralized networks. This fosters greater permissionless innovation, driving down financial barriers and enhancing economic freedom.

Since our first crypto investment in 2014, we’ve continued to invest through market cycles and regulatory complexities. The recent shifts in policy have only validated our long-held belief that the future of finance and the internet is fundamentally intertwined with crypto. 

To put it bluntly: we are all-in on American crypto. We believe the next generation of groundbreaking crypto solutions will be built right here in the United States.

If you’re building something transformative, we want to hear from you.