We’re still early in the legislative cycle. A lot can change.
But even at this stage, a few clear signals are emerging:
As we approach the end of the first quarter—and with legislative spring recess right around the corner in states like California—it’s a good moment to pause and take stock.
Not to draw sweeping conclusions. Not to declare winners and losers.
But to look at the early signals.
Across the country, state legislatures are actively shaping crypto policy. And while the full picture is still coming into focus, a few developments are already beginning to emerge.
Think of this as a progress report—one that offers a glimpse into where things may be headed.
If there’s one development that raised eyebrows this quarter, it’s what happened in Indiana.
Indiana passed House Bill 1116, which was subsequently signed into law by the Governor, becoming the first state to fully prohibit crypto ATMs (or kiosks).
What makes this particularly interesting is how the bill evolved.
Early versions focused on what you might expect:
In other words, regulation.
But as the bill moved through the legislative process, those provisions were stripped out and replaced with something much stronger: a full prohibition.
The final law doesn’t just restrict kiosks—it effectively removes them from the state. Enforcement is also notable, giving the Attorney General authority to pursue violations, including potential forfeiture of machines and funds tied to what is now illegal activity.
So, what happened?
The answer, in large part, is fraud.
Lawmakers pointed to a growing number of scams involving crypto kiosks—particularly those targeting vulnerable individuals—where funds are quickly and irreversibly transferred to bad actors. In fact, crypto kiosk scams accounted for hundreds of millions in reported losses nationwide.
At first glance, Indiana could be viewed as an outlier.
But it’s not.
Minnesota has introduced legislation that would similarly prohibit crypto kiosks, with law enforcement backing the proposal due to rising fraud concerns.
And now, we can add Tennessee to the list.
Tennessee lawmakers are advancing legislation that would make operating a crypto ATM a Class A misdemeanor, effectively banning them if passed.
In other words, this isn’t theoretical.
It’s happening.
Historically, tougher stances on crypto—particularly around consumer protection—have often been associated with blue states.
But Indiana and Tennessee are not that.
Which raises an interesting question:
If full bans are emerging from traditionally more crypto-friendly states, how might states like California or New York respond?
There’s also a broader policy shift worth noting.
We’re starting to see movement from:
➡ Regulation → Prohibition
And the driving force behind that shift is clear:
➡ Scams and fraud
While some states are pulling back on certain parts of the crypto ecosystem, others are moving forward—particularly when it comes to stablecoins.
At the center of this activity is the federal framework established by the GENIUS Act, which allows states to regulate stablecoin issuers—provided their rules are “substantially similar” to federal standards.
If they don’t?
The federal framework takes over. Effectively, the federal framework becomes the default setting, if states fail to act.
That dynamic has created something of a legislative sprint, with states working to establish their own frameworks before defaulting to federal oversight.
Florida is currently out in front.
Senate Bill 314 establishes a regulatory framework for payment stablecoins and has already passed the legislature. At the time of writing, it’s sitting on the Governor’s desk and is widely expected to be signed.
Within compliance circles, Florida’s approach is already being viewed as a potential model framework—one that other states may look to replicate.
What’s particularly notable about Florida is that it isn’t stopping at regulation.
The state is also advancing legislation to create a stablecoin sandbox—a controlled environment where companies can test and develop stablecoin-related products.
That tells us something important.
Some states aren’t just asking:
“How do we regulate this?”
They’re also asking:
“How do we attract it?”
Because while some states are tightening access points (like kiosks), others are actively trying to position themselves as hubs for crypto innovation.
Now, if you’ve been following crypto legislation for a while, this next part may sound familiar.
Stop me if you’ve heard this one before:
Market structure legislation is coming.
It was coming last summer. Then by the fall. Then by year-end.
And here we are.
Still waiting.
One of the biggest points of friction appears to be stablecoin yield.
Today, some platforms offer users the ability to earn returns—often in the range of 6-7%—on stablecoin holdings.
Compare that to what traditional bank accounts offer, and you start to see the issue.
From the perspective of banks and credit unions, this creates the potential for capital flight—funds moving out of traditional deposits and onto digital assets platforms.
That concern is especially pronounced for:
which rely heavily on deposit stability.
Banking groups have been pushing for restrictions on stablecoin yield, framing it as a necessary step to protect the financial system.
But the legal landscape is nuanced.
Under the GENIUS Act:
That distinction has become a focal point.
And increasingly, it appears that market structure legislation is being used as the vehicle to address—or eliminate—that gap.
The legislative landscape for digital assets is evolving at an unprecedented pace—reshaping how businesses operate across state and federal jurisdictions. From emerging state-level prohibitions and licensing regimes to complex debates around stablecoin yield and consumer protections, the policy environment is becoming more nuanced, more fragmented, and more consequential.
At BitAML, we don’t just monitor these developments—we actively engage in them. Our team brings deep, hands-on experience working with regulators, lawmakers, and industry stakeholders to help shape practical, risk-based digital asset policy. This vantage point allows us to translate regulatory intent into actionable compliance strategies tailored to your business model.
Whether you’re assessing exposure to new state frameworks, preparing for regulatory examinations, or building a forward-looking compliance and policy strategy, BitAML is uniquely positioned to guide you. Connect with us to evaluate your readiness and develop a policy playbook that keeps your organization not just compliant—but competitive—in a rapidly changing environment.
Book a discovery call with BitAML today.
Stablecoins as the New Regulatory Pressure Point If crypto regulation has a focal point in 2026, stablecoins will be it. Once positioned as a safer,
What are the consequences when prediction becomes a product? When a Prediction Turns Into a Payout Just days before U.S. forces captured Venezuelan President
A year defined by clearer rules, stronger partnerships, and a more mature compliance landscape. The Year Crypto Compliance Came Into Its Own If 2024