Digital Asset and AI Highlights: Early 2025

As of February 2025, the landscapes of digital assets and artificial intelligence (“AI”) continue to evolve rapidly, driven by significant developments in regulation, institutional adoption, and international policy. These transformative technologies are reshaping industries worldwide, with AI and blockchain innovations often converging to create unprecedented opportunities and challenges. Below, we highlight some of the most noteworthy updates so far in 2025.

U.S. Regulatory Actions

Executive Order on Digital Assets

On January 23, 2025, President Trump signed an executive order titled “Strengthening American Leadership in Digital Financial Technology.” This directive aims to establish a federal framework for digital assets, prohibit central bank digital currencies (“CBDCs”) in the United States, and evaluate a potential national digital asset reserve. It also creates a task force to propose comprehensive regulations for cryptocurrencies and stablecoins.

SEC Crypto Task Force

On February 4, 2025, SEC Commissioner Hester Peirce announced the creation of a Crypto Task Force within the SEC. Its mission includes providing clearer regulatory guidance for digital asset classifications, token offerings, and custody practices, marking a significant shift in the agency’s previously rigid stance.

Bipartisan Congressional Efforts

Congress has formed a bipartisan, bicameral committee focused on drafting a stablecoin bill and broader digital asset legislation. This committee has committed to advancing legislation within the first 100 days of the new administration.

U.S. AI Regulatory Framework

The U.S. has also introduced its first comprehensive AI regulatory framework. Focused on promoting innovation while addressing ethical and safety concerns, the framework mandates transparency in AI algorithms, enforces stringent data privacy standards, and establishes an oversight body to monitor compliance. This step reflects the growing importance of AI technologies across industries.

State-Specific Actions

Texas Establishes State-Owned Bitcoin Reserve

In January 2025, Texas made headlines by creating the first state-owned Bitcoin store, effectively establishing a sovereign Bitcoin reserve. This initiative positions Texas as a leader in blockchain innovation and aligns with its broader push to attract cryptocurrency miners and businesses. The Texas Bitcoin Reserve will serve as a hedge against economic uncertainty while also enabling the state to experiment with Bitcoin-based infrastructure projects.

Texas Releases Draft Texas Responsible AI Governance Act (“TRAIGA”)

The TRAIGA regulates AI systems that are “high-risk” that contribute to or make decisions that have “material legal or similarly significant effects” on consumers. The act imposes obligations on developers and deployers of high-risk AI systems to disclose their use of such systems through consumer notifications and to protect consumers against algorithmic discrimination. TRAIGA also contains numerous other restrictions on activities and obligations related to risk management for developers and deployers of such AI systems.

Pennsylvania Passes Digital Assets Authorization Act

In late 2024, the Pennsylvania House of Representatives passed the Digital Assets Authorization Act that protects individuals and businesses using digital assets from discrimination by state and local governments. The bill includes protections against government actions that impede individuals’ and entities’ ability to accept digital assets as payments or choose to self-custody such assets. It also includes a clause disallowing government discrimination through higher taxation on digital asset transactions.

Bitcoin Acts Introduced in Oklahoma

The Bitcoin Freedom Act would allow both state workers and businesses to be paid in Bitcoin. Oklahoma Senator Dusty Deevers cited inflation, Oklahomans’ financial wellbeing, and Bitcoin’s role in the financial future of the U.S. when announcing the bill. Additionally, Representative Cody Maynard announced the Strategic Bitcoin Reserve Act to allow state funds and savings accounts to invest in digital assets, with a similar emphasis on inflation and fiscal responsibility.

Alabama Blockchain Study Commission

The Alabama Senate formed its Blockchain Study Commission group last year, which met recently to discuss digital asset adoption in the state. Representatives from the state are currently working on drafting blockchain bills that promote Alabama as a blockchain-friendly environment, particularly for businesses. Support for blockchain-related regulation appears to be bipartisan and focused on how the technology could bolster Alabama’s economy.

International Developments

Hong Kong: Digital Assets as Immigration Assets and Launch of Digital Asset Index

In a groundbreaking policy, Hong Kong has begun accepting digital assets as part of its “wealth-based immigration” program. Applicants can now include cryptocurrencies in their asset declarations when applying for investment or skilled-worker visas. This policy underscores Hong Kong’s commitment to solidifying its position as a global hub for digital asset innovation.

Additionally, the Hong Kong Stock Exchange introduced its first Digital Asset Index in November 2024. This index tracks the performance of leading cryptocurrencies, providing greater transparency and benchmarking for institutional investors.

Switzerland: UBS Pilots Blockchain-Based Payment System

UBS successfully piloted “UBS Digital Cash,” a blockchain-based payment system designed to enhance the efficiency of cross-border transactions. The system leverages a private, permissioned blockchain to facilitate real-time settlements in multiple currencies, reflecting Switzerland’s continued leadership in financial innovation.

United Kingdom: Exploration of Blockchain for Government Bonds

The UK government is exploring blockchain technology for issuing government bonds (gilts). While adoption remains gradual, this initiative seeks to modernize debt issuance and settlement processes, highlighting blockchain’s transformative potential for public financial systems.

India: Leading in Cryptocurrency Adoption

For the second consecutive year, India has emerged as the global leader in cryptocurrency adoption. Despite stringent regulations and significant taxation on crypto trading, robust engagement with digital assets persists among the Indian populace, showcasing the resilience of the industry in the region.

European Union AI Act

The European Union’s AI Act has entered its final implementation phase in early 2025, introducing binding regulations for AI development and deployment. The act classifies AI applications into risk categories, with stricter compliance requirements for high-risk systems. Key provisions include mandatory assessments for bias and transparency, as well as fines for non-compliance. This regulatory framework seeks to balance innovation with ethical considerations and consumer protection.

Global Financial Institutions Embrace Blockchain

JPMorgan Chase is expanding its corporate banking operations in Switzerland by leveraging blockchain services to attract clients. The bank has facilitated real-time money transfers for major clients and plans to extend these services globally.

Standard Chartered has established a new entity in Luxembourg to provide cryptocurrency custody services within the European Union, addressing growing institutional demand for secure digital asset solutions.

Takeaways for Stakeholders

These developments underscore the dynamic and evolving nature of digital assets, blockchain technology, and AI. While regulatory frameworks in the U.S. and internationally are gaining clarity, jurisdictions like Texas, Hong Kong, and Switzerland are emerging as innovation leaders. Businesses and investors should closely monitor these trends to capitalize on the opportunities and navigate potential challenges in the global digital asset and AI landscapes.

If you have questions about how these updates may impact your organization or require assistance navigating the evolving digital asset and AI regulatory landscapes, please contact AGG Payment Systems & Fintech and Emerging Technologies attorneys Allison Raley or Kelley Chandler.