‘Project Crypto’ Aims to Bring Digital Finance Back to the U.S., Says Bernstein

The U.S. Securities and Exchange Commission has launched Project Crypto, a regulatory initiative aimed at reintegrating blockchain innovation into domestic markets. Commissioner Paul Atkins announced the effort during a Thursday speech, framing it as a modernization of capital markets for the digital age.

Bernstein analysts, led by Gautam Chhugani, interpret the move as a reversal of prior SEC stances under Gary Gensler. Atkins contends that excessive reliance on the Howey Test has misclassified most crypto assets as securities, stifling capital formation and pushing startups overseas.

Key components include clear asset categorization—separating digital commodities, stablecoins, collectibles, and tokenized securities—alongside streamlined licensing for broker-dealers handling both crypto and traditional assets. The proposal also establishes legal frameworks for tokenized securities, attracting attention from major financial and tech firms.

In a significant departure, the SEC plans to incorporate decentralized finance platforms into its regulatory structure, potentially rewriting legacy rules to accommodate automated systems.