Indiana Lawmaker Argues Crypto Bills Should Cover More Than Just Bitcoin

Indiana state representative Greg Steuerwald has publicly urged that the state’s cryptocurrency legislation expand beyond Bitcoin to include a wider spectrum of digital assets. This call highlights growing concerns that focusing solely on Bitcoin leaves regulatory gaps that could expose investors to risks associated with altcoins, tokens, and decentralized finance (DeFi) products. As digital assets diversify rapidly, Steuerwald’s position raises important questions about how state-level laws can adapt to the complex crypto ecosystem.

What happened

Rep. Greg Steuerwald has criticized current Indiana crypto bills for centering predominantly on Bitcoin, arguing this narrow focus fails to address the broader range of digital assets now prevalent in the market. These bills, as confirmed, do not comprehensively cover altcoins, various token types, or DeFi protocols, which represent significant segments of the crypto landscape.

This critique aligns with federal regulatory approaches, where agencies like the U.S. Securities and Exchange Commission (SEC) have adopted a broad interpretation of digital assets, often classifying many as securities subject to federal securities laws. The SEC’s 2019 Framework for “Investment Contract” Analysis of Digital Assets exemplifies this stance by applying securities law principles to a wide array of tokens beyond Bitcoin.

Meanwhile, the U.S. Commodity Futures Trading Commission (CFTC) has recognized Bitcoin and Ethereum as commodities but maintains less clear jurisdiction over other digital assets, resulting in regulatory uncertainty. This patchwork regulatory environment underscores Steuerwald’s point that state legislation limited to Bitcoin may inadequately protect investors or provide clear rules for the full spectrum of crypto products.

Research from organizations such as Coin Center further details the diversity of digital assets, including utility tokens, security tokens, stablecoins, and non-fungible tokens (NFTs), each presenting distinct legal and functional challenges. The complexity of these asset types complicates efforts to craft one-size-fits-all legislation, as each category may require tailored regulatory treatment.

Why this matters

Expanding crypto legislation beyond Bitcoin carries significant implications for regulatory clarity, investor protection, and market stability. A broader legal framework could reduce gaps that leave investors exposed to risks inherent in less-regulated tokens and DeFi products, which have been linked to episodes of market volatility and losses.

Moreover, clearer legislation encompassing diverse digital assets could foster innovation by providing explicit guidelines for emerging crypto technologies. By reducing legal ambiguity, startups and developers might better navigate compliance requirements, potentially facilitating more robust growth in the sector.

However, there are trade-offs to consider. Industry commentators have highlighted that broader regulations could increase compliance costs, particularly for smaller projects, which might inadvertently stifle innovation if rules are too burdensome or insufficiently nuanced. Balancing these considerations is critical to designing effective legislation.

From a structural perspective, Indiana’s current legislative approach, focused mainly on Bitcoin, risks creating regulatory blind spots as the crypto market evolves. This underscores a broader challenge facing U.S. policymakers: how to reconcile the diversity of digital assets with existing federal regulatory frameworks and jurisdictional boundaries between agencies like the SEC and CFTC.

What remains unclear

Despite these observations, several important questions remain unanswered. The specific mechanisms by which legislation might differentiate between types of digital assets—such as utility tokens versus security tokens—are not detailed in Steuerwald’s statements or the current bills. This differentiation is crucial to balancing investor protection with innovation.

Additionally, it is unclear how expanded state-level regulations would interact with existing federal laws and agencies, especially given overlapping jurisdictions and differing regulatory philosophies. The potential for jurisdictional conflicts remains an open issue.

There is also no comprehensive data yet on the practical effects of broader crypto legislation within U.S. states, limiting the ability to assess outcomes related to market stability or investor confidence. Furthermore, the impact of such regulations on innovation, particularly in specific crypto sectors, is not quantified or elaborated upon in available sources.

Finally, the research does not address how Indiana or the U.S. might coordinate regulation internationally, an increasingly relevant factor given the global nature of digital asset markets.

What to watch next

Development and introduction of legislative proposals in Indiana that explicitly include altcoins, tokens, and DeFi products beyond Bitcoin.
Clarifications or statements from Indiana regulators and lawmakers on how expanded crypto laws would interface with federal agencies like the SEC and CFTC.
Emergence of regulatory frameworks or models from other U.S. states or international jurisdictions that effectively address a broad range of digital assets.
Data releases or research assessing the impact of expanded crypto regulations on market stability, investor protection, and innovation.
Industry and stakeholder feedback on proposed legislation, particularly regarding compliance costs and potential effects on smaller crypto projects.

The push by Rep. Greg Steuerwald to broaden Indiana’s crypto legislation beyond Bitcoin highlights a critical juncture in regulatory policy. While expanding the legal scope could enhance investor safeguards and provide clearer rules for the growing variety of digital assets, significant questions about implementation, jurisdiction, and impact remain unresolved. As regulators and lawmakers grapple with these complexities, the balance between fostering innovation and ensuring market stability will be central to shaping the future of crypto regulation.

Source: https://decrypt.co/352795/crypto-bills-shouldnt-bitcoin-bust-says-indiana-lawmaker. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.