Digital Assets are a technological revolution unfolding before Virginians’ eyes. Currently, 53 million Americans use digital assets, and Virginia ranks No. 7 among the top states in creating a digital economy.

For those who are unfamiliar with the term, digital assets — such as Bitcoin or Ethereum — offer individuals and businesses a secure and decentralized method of conducting transactions.

Virginia has already shown a proactive stance toward understanding and integrating the technology. State Sen. Saddam Azlan Salim, D-Fairfax, introduced Senate Bill 339 earlier this year, which the governor signed. The bill safeguards the cryptocurrency rights of Virginia’s citizens and calls for the creation of a workgroup to study and make recommendations related to blockchain technology, digital asset mining and cryptocurrency activity in the commonwealth. This is in addition to a bill passed in 2022 by the Virginia General Assembly that permits banks in the commonwealth to provide virtual currency custody services. While our state takes these actions, our federal government is also taking steps with support from Virginia’s representatives.

The U.S. House of Representatives recently passed the “Financial Innovation and Technology for the 21st Century Act” (FIT21). This landmark legislation provides the robust consumer protections and regulatory certainty necessary for digital asset innovation to flourish in the United States. Virginia representatives on both sides of aisle supported the bill.

U.S. Rep. Abigail Spanberger, D-7th, has been a staunch supporter of blockchain technology and digital assets. She has co-sponsored bipartisan legislation aimed at combating the Chinese Communist Party’s (CCP) influence and protecting U.S. intellectual property. The CCP invests heavily in the development of emerging technologies, including a state-controlled Blockchain-based Service Network.

While blockchain is currently most known for its affiliation with digital assets, such as Bitcoin, the technology could radically reshape data privacy with broad adoption across cloud storage platforms over the next decade. Spanberger’s support for FIT21 aligns with broader efforts to promote a secure and innovative digital economy. By backing FIT21, she continues to advocate for a regulatory framework that balances innovation with robust consumer protections.

In 2021, the Biden administration even dipped its toes into regulating the technologies with the Infrastructure Investment and Jobs Act. Through this, cryptocurrency exchanges, such as Coinbase or Kraken, must issue a Form 1099-B to each customer and to the IRS to collect taxes for these transactions. These taxes are important, as they will create an estimated $11 billion in additional government revenue over the next 10 years.

Even with this progress, lawmakers remain hesitant, leaving the U.S. at risk of falling behind global competitors already creating clear regulations. The Biden administration has vetoed legislation more recently that had bipartisan support. It’s no surprise with the unsure regulatory environment that major businesses in the sector have started moving out of the country. Coinbase, the largest crypto exchange in the United States, opened a business in Bermuda, and its New York-founded competitor, Gemini, continues growing its business in the United Arab Emirates.

For Virginia, the stakes are high. The commonwealth is home to a burgeoning tech sector through data centers and a robust agricultural industry, both of which stand to benefit immensely from the advancements in digital assets and their underlying blockchain technology.

For example, Vineyard Vantage, based in Harrisonburg, has applied the technology to the wine industry to help protect crops. The potential benefits for Virginia’s business owners are limitless, but only if we provide a stable regulatory environment that encourages innovation.

While critics point out that digital assets have some associated criminal activity, it is essential to note that only 0.34% of all cryptocurrency volume in 2024 was used for illegal purposes, with the overwhelming majority of crypto being used for legitimate transactions. The other concern is market volatility. FIT21 addresses these problems.

FIT21 establishes clear and functional federal requirements over digital asset markets, cementing American leadership while protecting consumers. The legislation provides the Commodity Futures Trading Commission (CFTC) with new jurisdiction over digital commodities. It clarifies the Securities and Exchange Commission’s jurisdiction over digital assets offered in an investment contract. It also establishes a process to permit the secondary market trading of digital commodities if they were initially offered as part of an investment contract. Finally, it imposes comprehensive customer disclosure, asset safeguarding, and operational requirements on all entities required to be registered with the CFTC and/or the SEC.

It is imperative that our senators take up the legislation and work across the aisle with their colleagues. Digital assets are not only a matter of keeping pace with technological advancement on the global stage; they are also about securing the commonwealth’s position as a leader in the digital economy.

Greg Leffel is founder and executive director of the Virginia Blockchain Council.