Recently, two important regulatory developments have occurred: the Federal Reserve announced the end of a plan targeting the cryptocurrency banking industry, which is seen as a significant benefit for the industry; at the same time, Grayscale officially submitted the first application for a Dogecoin spot ETF. This study aims to analyze whether these events represent a potential shift in the U.S. regulatory attitude and explore their potential impact on the compliance process of cryptocurrencies and future new capital inflows.
1. Recent Important Regulatory Developments
1.1 The Federal Reserve Officially Cancels the Special Regulatory Program for Bank Cryptocurrency Activities
On August 15, 2025, the Federal Reserve announced that it had closed its "Novel Activities Supervision Program," established in 2023, which was originally intended to strengthen the regulation of banks' cryptocurrency activities.
The Federal Reserve Board stated in a brief announcement: "Since the Board initiated the regulatory plan for certain cryptocurrency and fintech activities in the banking sector, it has deepened its understanding of these activities, the associated risks, and the banking risk management practices. Therefore, the Board is integrating this knowledge and oversight of these activities back into standard regulatory processes and is rescinding the regulatory letter issued in 2023 that established this program."
This very short-lived program was introduced against the backdrop of the banking crisis that erupted in 2023. Three U.S. banks closely related to the cryptocurrency industry – Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank – collapsed one after another. The Federal Reserve felt the need to pay closer attention to the risks that innovative and unproven technologies might pose to the banking system.
Of course, the latest requirements only simplify the compliance process for banks engaging in cryptocurrency business, and core regulatory principles such as anti-money laundering and consumer protection have not changed. Prior to this, the cryptocurrency industry had long accused U.S. regulatory agencies of deliberately "blocking" their connections with the banking sector.
Since the beginning of this year, with the pro-cryptocurrency industry Trump taking office as president, the regulatory climate has changed dramatically. In April this year, the Federal Reserve withdrew its guidance requiring banks to obtain regulatory approval before engaging in new cryptocurrency businesses. The other two U.S. federal banking regulators – the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) – have also taken similar measures, allowing banks to decide whether to engage in cryptocurrency business under existing risk management requirements. Subsequently, in July this year, the three regulatory agencies issued a joint statement providing guidance on how banks can offer cryptocurrency custody services. The guidance describes custody as representing clients holding digital assets, while emphasizing that this does not create new regulatory requirements.
1.2 Grayscale Officially Submits Application for Dogecoin Spot ETF
On August 16, the cryptocurrency asset management giant Grayscale submitted an application to the U.S. Securities and Exchange Commission (SEC) to launch a Dogecoin spot ETF. If approved, this ETF will be listed on the New York Stock Exchange Arca under the ticker symbol "GDOG." This is another important cryptocurrency ETF application following Bitcoin and Ethereum ETFs, and the first application for a Dogecoin spot ETF.
The ETF will adopt a cash creation and redemption mechanism, with Coinbase Custody Trust Company serving as the custodian and BNY Mellon as the administrative manager and transfer agent. Grayscale indicates that the SEC's review period for the application is 240 days, with preliminary reviews to be completed within 45 days, followed by a 21-day public comment period.
Grayscale CEO Michael Sonnenshein stated that with the successful launch of Bitcoin and Ethereum ETFs, the demand for cryptocurrency ETFs continues to grow. As the fifth largest cryptocurrency by market capitalization, Dogecoin has a broad market base and community support. This application is another important step for Grayscale in promoting the compliance and mainstream acceptance of the cryptocurrency market.
2. Potential Shift in U.S. Regulatory Attitude
2.1 Reasons for the Shift in Regulatory Attitude
The Federal Reserve's cancellation of the special regulatory program for cryptocurrency businesses and the Grayscale Dogecoin ETF application reflects a shift in the U.S. regulatory attitude. This shift is not accidental but is the result of multiple contributing factors.
From a political perspective, the Trump administration has shown a relatively friendly attitude toward the cryptocurrency industry. Trump himself expressed support for the development of cryptocurrencies during his campaign, believing it could help drive financial innovation and economic growth in the United States. After taking office, he appointed several officials who held an open attitude toward cryptocurrencies, laying a political foundation for the adjustment of regulatory policy.
From an economic perspective, the scale and influence of the cryptocurrency market are continuously expanding. According to data from CoinMarketCap, as of August 2025, the total market capitalization of cryptocurrencies worldwide has exceeded $3 trillion, with Bitcoin's market cap accounting for over 40%. The development of the cryptocurrency market has attracted a large number of investors and provided new business opportunities for financial institutions. Against this backdrop, regulatory agencies recognize that they cannot simply suppress cryptocurrencies but should regulate market development through reasonable oversight to better serve the economy.
From the perspective of industry development, the compliance process of the cryptocurrency industry is continuously advancing. More and more cryptocurrency companies are proactively complying with regulatory requirements, strengthening risk management and internal controls. For example, cryptocurrency exchanges like Coinbase have obtained regulatory licenses in multiple countries and regions, providing users with safer and more compliant trading services. Additionally, traditional financial institutions such as BlackRock and Fidelity are also entering the cryptocurrency space, further promoting the compliance development of the industry. In this context, regulatory agencies believe that cryptocurrency businesses can be incorporated into the regular regulatory framework to improve regulatory efficiency.
2.2 Advancing the Compliance Process of Cryptocurrencies
The Federal Reserve's cancellation of the special regulatory program for cryptocurrency businesses means that the compliance process for banks engaging in cryptocurrency activities will be simplified. This will lower the barriers for banks to participate in cryptocurrency businesses, facilitating more collaboration between banks and cryptocurrency companies. For example, banks will be able to provide funding custody, payment clearing, and other services to cryptocurrency exchanges more freely, thereby enhancing the security and convenience of cryptocurrency transactions.
If the Grayscale Dogecoin ETF application is approved, it will bring stricter regulatory standards to the Dogecoin market. As a regulated financial product, an ETF requires the issuer to comply with strict information disclosure and risk management regulations. This will encourage Dogecoin project teams to strengthen their compliance infrastructure, increasing the transparency and credibility of the project. At the same time, it sets an example for other cryptocurrency projects, pushing the entire cryptocurrency industry towards a more compliant direction.
2.3 Potential Impact on Future New Capital Inflows
The Federal Reserve's adjustment of regulatory policy facilitates the participation of banks in cryptocurrency businesses, which will attract more bank funds into the cryptocurrency market. Banks, as an important component of the traditional financial system, possess a large scale of funds and customer resources. Once banks increase their investment in cryptocurrency businesses, it will bring substantial incremental funds to the cryptocurrency market. For example, banks can introduce traditional financial funds into the cryptocurrency market by issuing cryptocurrency-related financial products and providing cryptocurrency loans.
If the Dogecoin spot ETF successfully lists, it will provide ordinary investors with a more convenient and safer investment channel. Compared to directly purchasing Dogecoin, investors can indirectly invest in Dogecoin by purchasing ETF shares, enjoying the benefits of Dogecoin's price appreciation. This will attract more ordinary investors into the Dogecoin market and further expand its market size. At the same time, the listing of the ETF will also improve Dogecoin's liquidity and market recognition, attracting more institutional investors' attention and investment.
3. Potential Impact on the Market
3.1 Price Volatility of the Cryptocurrency Market
Following the announcement of the Federal Reserve's cancellation of the special regulatory program for cryptocurrency businesses and the Grayscale Dogecoin ETF application, there was a noticeable fluctuation in cryptocurrency market prices, pushing prices upwards. This indicates an optimistic market attitude towards the adjustments in regulatory policy, believing that it will bring new development opportunities to the cryptocurrency market.
However, it is important to note that the cryptocurrency market is subject to significant price volatility and is influenced by various factors. Although adjustments in regulatory policy may have some impact on the market, prices are ultimately determined by supply and demand relationships, macroeconomic conditions, and other factors. Therefore, investors need to fully consider market risks and invest cautiously when participating in cryptocurrency investments.
3.2 Changes in Investor Behavior
Adjustments in regulatory policy will have a significant impact on investor behavior. As the barriers for banks to participate in cryptocurrency businesses are lowered, investors will have more trust in the cryptocurrency market, leading to increased investments in cryptocurrencies. At the same time, if the Dogecoin spot ETF successfully lists, it will attract more ordinary investors into the market. These investors tend to have a more cautious investment behavior, focusing on long-term returns. Their entry will change the investor structure of the cryptocurrency market, making it more rational and mature.
However, adjustments in regulatory policy may also lead some investors to become overly optimistic, ignoring market risks. For example, some investors may blindly follow the trend of investing in the Dogecoin ETF without fully understanding its investment risks. Therefore, investors need to fully understand market information and make reasonable investment plans based on their risk tolerance and investment goals.
3.3 Adjustments in Industry Competition Landscape
The Federal Reserve's adjustment of regulatory policy will promote collaboration between banks and cryptocurrency companies, pushing the development of the cryptocurrency industry. This will intensify competition in the industry, prompting cryptocurrency companies to continuously innovate and improve service quality to attract more users and funds. For example, cryptocurrency exchanges may strengthen cooperation with banks to offer safer and more convenient trading services; cryptocurrency wallet companies may develop more features to enhance user experience.
At the same time, the introduction of the Dogecoin spot ETF will bring a new competitive landscape to the Dogecoin market. Other cryptocurrency projects may accelerate the launch of similar ETF products to compete for market share. This will promote the diversification of the cryptocurrency market and provide investors with more investment choices.
4. Conclusion and Outlook
4.1 Summary Assessment of the Shift in Regulatory Attitude
The Federal Reserve's cancellation of the special regulatory program for cryptocurrency businesses and the Grayscale Dogecoin ETF application marks a shift in the regulatory attitude in the United States. This shift is the result of multiple factors, including political, economic, and industry developments. The adjustment in regulatory policy will promote the compliance development of the cryptocurrency industry, attract more funds into the market, and drive further maturation of the cryptocurrency market.
However, it is important to note that adjustments in regulatory policy do not mean a relaxation of oversight. Regulatory agencies will continue to pay attention to the risks in the cryptocurrency market and strengthen market supervision. For example, in terms of anti-money laundering and consumer protection, regulatory agencies will continue to strictly enforce relevant regulations to maintain market order and protect investor interests.
4.2 Outlook for the Future Development of the Cryptocurrency Industry
With the shift in the regulatory attitude in the United States, the cryptocurrency industry is expected to embrace new development opportunities. The collaboration between banks and cryptocurrency companies will become closer, and the compliance process of the cryptocurrency market will accelerate. At the same time, the introduction of innovative financial products such as cryptocurrency ETFs will provide investors with more investment choices and promote diversified market development.
However, the cryptocurrency industry still faces many challenges. For instance, the cryptocurrency market is subject to significant price volatility, and market manipulation still exists; issues regarding the technical security and privacy protection of cryptocurrencies also need to be further addressed. Therefore, the cryptocurrency industry needs to continuously innovate and improve, strengthening industry self-discipline to meet future development challenges.
Overall, the shift in the regulatory attitude in the United States has brought new development opportunities and challenges to the cryptocurrency industry. Industry participants need to closely monitor changes in regulatory policy, actively adapt to the new regulatory environment, and continuously innovate and enhance their capabilities to achieve sustainable development in the industry.
The data in the above report is compiled and edited by WolfDAO (@10xWolfDAO). If you have any questions, please contact us for updates.
Written by: Eva, WolfDAO