The Long Road from Bill to Rulebook
For anyone in the crypto industry watching the legislative process in Washington, a recent statement from a Paradigm executive serves as a sobering reality check. While headlines celebrate the introduction or passage of new crypto market structure bills, the real work—and the real wait—begins after the ink dries on a president’s signature. The journey from a signed law to enforceable, detailed regulations is a marathon, not a sprint, and it could take years.
What is “Rulemaking”?
When a law is passed, it often provides a broad framework or set of principles. The intricate details—the specific do’s and don’ts that businesses must follow—are left to regulatory agencies like the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). This process is called “rulemaking.”
It involves regulators meticulously translating legislative intent into practical, operational rules. This is a complex and deliberate process designed to ensure regulations are clear, fair, and implementable.
The Steps That Add Up to Years
So, why does it take so long? The rulemaking process is built on transparency and public input, which inherently slows it down. Here’s a typical path:
- Proposal: The relevant agency drafts a “Notice of Proposed Rulemaking” (NPRM), which is published for the public to see.
- Comment Period: This is a critical phase that can last for months. Industry participants, advocacy groups, legal experts, and the general public can submit formal comments, critiques, and suggestions.
- Agency Review: Regulators must then read, analyze, and potentially incorporate this massive volume of feedback into a revised draft.
- Final Rule & Implementation: A final rule is published, often with an additional grace period (sometimes months or more) before it officially takes effect, giving companies time to comply.
Each of these steps is subject to administrative procedures, internal reviews, and potential legal challenges. For a novel and complex area like digital asset market structure, the comment period alone could generate thousands of pages of technical arguments, ensuring the process moves at a bureaucratic pace.
What This Means for Crypto
This extended timeline has significant implications. For crypto businesses operating in the U.S., it means navigating a prolonged period of regulatory uncertainty. They may have a general sense of the direction from a new law, but without the final rules, making long-term strategic decisions or major investments remains fraught with risk.
It also underscores the importance of ongoing engagement. The industry’s role doesn’t end with lobbying for a bill’s passage. The most crucial advocacy often happens during the public comment periods of the rulemaking phase, where technical expertise can shape the final regulations that will govern the market for decades.
In short, while legislative progress is a vital and celebrated milestone, the crypto community should brace for patience. The construction of a comprehensive U.S. regulatory framework for digital assets is a multi-year project just getting started.
