forbes.com
For much of the past decade, the digital asset industry in Washington operated in what many insiders describe as a defensive crouch. The focus was not on scaling adoption or refining market structure, but on survival. The question was whether blockchain-based systems would be allowed to exist within the U.S. financial system at all.
“For a long time we were playing defense,” said Kristin Smith, President of Solana Policy Institute.
In 2026, that posture is beginning to shift in a more durable way.
The passage of the GENIUS Act in 2025, alongside the growing momentum behind the Clarity Act, suggests that policy discussions have moved beyond existential debates and into implementation. Legislative tracking and market analysis indicate the Clarity Act is expected to advance through markup in April 2026 with bipartisan support.
That change is also starting to show up in the markets. Bitcoin exchange-traded funds saw more than $1.6 billion in net inflows in March 2026, reversing prior outflows and signaling a return of institutional confidence in regulated exposure to the asset class.
What is emerging is not just regulatory clarity, but the early formation of infrastructure. Policy is becoming part of the foundation for what many now describe as internet-native capital markets.
Smith’s own move from leading a broad industry trade group to heading the Solana Policy Institute reflects that transition.
“This will be something that isn’t going to be threatened out of existence like it was a couple of years ago,” she said. “Let’s get the rules of the road in place.”
Policy Moves Closer To The Technology
In earlier phases, the industry benefited from presenting a unified voice. Trade associations worked to simplify a complex ecosystem and align messaging across companies with very different priorities. That approach was effective when policymakers were still developing a baseline understanding of the technology.
Today, the questions have become more specific. Regulators are no longer asking what crypto is in broad terms. They are asking how particular systems function, how assets move across networks and how new financial primitives interact with existing legal frameworks.
“What’s actually really cool is this idea that we now have organizations that are focusing on ecosystems,” Smith said.
The comparison is often made to other infrastructure industries. Different networks may serve similar purposes, but they are governed differently because they operate differently.
As a result, policy is moving closer to the underlying systems themselves.
“Ensuring that the policy making… works for those who are building,” Smith said, has become central to the role.
Policy is no longer something that sits outside the system. It is increasingly something that shapes how systems are designed from the outset.
Unlocking Institutional Participation
At the same time, the primary constraint on growth is no longer technical capability.
“It’s very easy to issue a security on a blockchain,” Smith said. “It’s a heck of a lot harder to trade it on a blockchain.”
That gap reflects the current state of market structure. Existing rules were designed for intermediated systems, and adapting them to programmable, on-chain environments is still an ongoing process.
Institutional capital depends on that translation being clear before it can move at scale.
“I focus on getting the rules of the road in place,” Smith said, “and then that will allow development, investment and adoption.”
Early signs of that shift are already visible. In March 2026, Ondo Finance announced the tokenization of five Franklin Templeton ETFs, allowing those assets to be accessed and utilized on-chain. Investors can hold exposure in a wallet, transact outside of traditional market hours and integrate those positions into decentralized financial applications.
While still early, these examples begin to illustrate what a more integrated system could look like.
Convergence Is No Longer Theoretical
For years, the industry has talked about convergence between traditional finance and crypto. That idea is now moving from theory to early execution.
“The crypto world and the tradfi world… are going to become one and the same,” Smith said.
That convergence is unfolding in layers. Traditional financial products are being wrapped in crypto-native structures, while blockchain-based assets are being integrated into existing financial systems.
Policy plays a central role in connecting those layers.
Without it, the systems remain parallel. With it, they begin to merge.
Building At Policy Scale
One of the less visible challenges is scale. Policy development at this level requires coordination across a wide range of stakeholders, from regulators and legislators to builders and institutions.
“You can’t just have one developer maintaining an entire blockchain,” Smith said. “Similarly, you can’t just have a handful of people working on policy.”
That complexity is part of what makes the current moment feel uneven. Progress is happening, but it is happening through negotiation, iteration and, at times, friction.
Political dynamics remain a factor. Upcoming midterm elections could shift the balance in Congress and affect the pace of legislation.
There are also ongoing tensions between traditional financial institutions and crypto-native firms, particularly around how new products should be structured and regulated.
The System Before The Floodgates
Even with those constraints, the direction is becoming clearer.
"Once the rules of the road are in place, that’s going to open up the floodgates," Smith said.
That does not imply an immediate transformation, but it does suggest that the primary barrier is shifting. The question is becoming less about regulatory uncertainty and more about execution. If that transition continues, the long-term outcome may look relatively quiet from the outside; users interacting with financial systems that happen to be on-chain, without necessarily being aware of the infrastructure that supports them. Policy, in other words, would function as a stable, underlying layer rather than a visible point of friction.
For Smith, that’s precisely the point. After years of fighting for the industry’s survival, the goal now is to build the framework that allows it to function, not as a parallel experiment, but as a seamless part of the broader financial system.
"Get the rules of the road in place," she said, "and allow for adoption of the tech."