Coinbase’s David Duong: Regulatory Policy Shift Will Be 2025’s Biggest Crypto Growth Driver

Forget halvings and ETF flows—the real crypto catalyst is coming from Capitol Hill.

Coinbase’s head of research, David Duong, just laid out the 2025 playbook. The single most important force shaping the market won't be a new blockchain or a meme coin frenzy. It'll be the long-awaited pivot in regulatory policy.

From Hostility to Framework

Duong points to a fundamental shift. After years of enforcement-first ambiguity, regulators are finally moving toward clear rules of the road. This isn't about a single bill passing; it's a change in posture. Think guidance on custody, token classification, and exchange operations—the boring stuff that builds real foundations.

Why This Changes Everything

Clarity unlocks institutional capital. It lets traditional finance build products without legal paranoia. It gives startups a map instead of a minefield. This regulatory tailwind could do more for mainstream adoption than any bull run—because it makes the space investable for the cautious giants sitting on the sidelines.

The Ironic Twist

Here’s the kicker: the very regulators who spent years trying to tame crypto might end up fueling its next explosive chapter. Talk about a plot twist Wall Street analysts didn’t see coming—though they’ll still charge you 2% to manage your exposure to it.

The message is clear. Watch the lawmakers, not just the charts. In 2025, policy is the new alpha.

Coinbase sees crypto maturing in 2026

The report also claims that the investor base itself is no longer what it used to be and is now more diversified. In the past, crypto was used by early adopters who couldn’t be sure mass adoption WOULD ever happen.

But that has changed, and it is now dominated by institutions and a far wider cross‑section of allocators and end‑users.

Demand has also gone from a monolith to become a mosaic of macroeconomics, technology, and geopolitics.

According to him, if the industry executes on product quality, regulatory stewardship, and user‑centric design, it will be easier to help ensure that the next wave of innovation reaches everyone, everywhere, all the time.

Coinbase’s CPO thinks America may fall behind China next year

The competition for dominance in the new frontier that is crypto is bound to intensify next year, and President TRUMP has declared several times that he wants America to become the crypto capital of the world.

Coinbase’s chief policy officer, Faryar Shirzad, has expressed concern, warning that the United States could potentially lose ground in the global crypto if it proceeds with a ban on interest or rewards on U.S. stablecoins. The warning comes as countries are now competing more aggressively over digital money, and rewards or incentives could strongly influence which currencies come out on top.

In an X post, Shirzad claimed the issue has become more serious since China’s central bank has announced that starting January 1, 2026, banks will be allowed to pay interest on digital yuan balances.

This means the digital yuan will no longer be used just as digital cash; it will work more like a bank deposit that can earn interest. Chinese officials reportedly hope this will encourage more people to use it, since adoption has been slower than expected despite years of testing.

Coinbase sees the GENIUS Act as a way to help U.S.-regulated, dollar-backed stablecoins become the main tools for digital payments worldwide. However, Shirzad has warned that banning rewards could hurt that goal and weaken the U.S. dollar’s role globally.

To compete with China now, those rewards are non-negotiable. However, banking groups have been clear from the onset that they don’t want them, arguing that allowing rewards would make stablecoins too similar to bank deposits and could threaten financial stability.

2026 is bound to be tumultuous for all involved as the U.S. struggles to figure out how to proceed without crossing the very powerful parties involved. However, after the dust settles, the crypto sector is likely to be better off.

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