Regulation Alone Won’t Crown Crypto Kings—Innovation Still Drives the Throne

Crypto’s future isn’t written by bureaucrats with red tape. While Washington dithers over compliance frameworks, the real breakthroughs happen in labs and code repositories—where zero-knowledge proofs slash verification times and decentralized networks bypass legacy finance’s toll booths.

Here’s the uncomfortable truth: No amount of rulemaking can compensate for a lack of scientific grit. The next Bitcoin or Ethereum won’t emerge from a regulatory sandbox—it’ll explode out of some coder’s basement after 17 energy-drink-fueled all-nighters.

Wall Street’s still trying to slap suits on this rebellion—good luck with that. Meanwhile, the nerds are busy building the infrastructure that’ll make today’s financial system look like dial-up internet.

Crypto and the U.S. Federal Government

Both the WHITE House and Congress are working to support and accelerate innovation and bolster U.S. dominance in the crypto economy and the blockchain technologies that power it. The White House has established the Presidential Working Group on Digital Asset Markets, while two major pieces of legislation, the GENIUS and STABLE bills, are pending in Congress. There is a crying need for regulatory and legislative reforms that prioritize and support innovation in crypto while enforcing robust protections for consumers. Efforts to accomplish these things sensibly are to be applauded.

At the same time, though, we are on the brink of seeing massive cuts to academic research funding in the United States. The White House budget proposal for 2025 includes a cut of 55% for the National Science Foundation (NSF). In the meantime, China increased its budget by 10% last year. NSF is the source of most federal funding for research in computer science at U.S. universities. It’s the main source of funding that has driven crypto innovations like those in the list above. Companies provide little funding for academic research because it’s not product-specific. So defunding NSF means defunding scientists in the U.S.—including those leading crypto innovation.

Defunding the Innovation Pipeline

We are academic researchers in the field of crypto, representing five U.S. universities. Alongside our teaching, we conduct research and train PhD students.

While market cap is a short-term indicator of the crypto industry’s health, the number of PhD students studying blockchain is a long-term one: it reflects the depth of future scientific leadership. That pipeline is already thinning. Several of us could not take on new PhD students this year due to the uncertain U.S. funding climate. And we are not alone.

Several of the companies in the list above were co-founded by former members of our academic groups or by us. If future members of our groups vanish alongside scientific funding, so will successful future founders of crypto companies in the U.S. And PhD students don’t just start companies. They are also the engine that powers academic and ultimately industry research, doing the brain- and labor-intensive work behind the technical innovations that lead to faster, more secure blockchains. PhD students in our groups played a key role in creating or advancing in many of the concepts in the second list above. If they vanish, so will the breakthroughs they WOULD have brought to the industry.

When we’re funded to do research and stay on the cusp of innovation in crypto, we’re also better teachers—able to equip students with the latest advances. That means stronger technical leaders educated in the U.S.

Conclusion

Better regulation and legislation could be a boon to crypto. But U.S. leadership in crypto won’t be secured by policy alone. At the forefront of crypto innovation is science—and U.S. universities have long been its powerhouse.

If you’re a farmer trying to ensure a strong harvest, it’s wise to upgrade your equipment and expand your fields. But if you stop planting seedcorn, no amount of machinery will save the crop.

If you care about U.S. leadership in crypto, contact your congressional representatives and senators. Urge them to support the research funding that has made American universities the seedbed of global scientific and technical leadership—blockchain technology included.

is a Professor of Computer Science and Electrical Engineering at Stanford University, and advises a16z crypto and several projects in the blockchain space.

is an Associate Professor of Computer Science at New York University. He has served as an advisor for Zcash, Algorand, Chia, O(1) labs and Espresso Systems and as a Research Partner at a16z crypto.

is the Angel Jordan Associate Professor of Electrical Engineering at Carnegie Mellon University. She is a co-director of the Initiative for CryptoCurrencies and Contracts (IC3), a member of Department of Commerce Information Security and Privacy Advisory Board (ISPAB), and a member of the UK Financial Conduct Authority’s Synthetic Data Expert Group (SDEG).

is an Assistant Professor of Computer Science at Yale University. He is a co-founder of Espresso Systems and has advised several prominent crypto projects, including Chia and Filecoin.

is the Weill Family Foundation and Joan and Sanford I. Weill Professor at Cornell Tech and a Computer Science faculty member at Cornell University. He is also a co-director of the Initiative for CryptoCurrencies and Contracts (IC3), Chief Scientist at chainlink Labs, and author of crypto thriller novel The Oracle.

is the Nemat-Nasser Endowed Chair Professor of Electrical and Computer Engineering at the University of California San Diego. She is also the founding co-director of the UCSD Center for Machine Intelligence, Computing, and Security (MICS), and a Research Scientist at Chainlink Labs. She is a fellow of ACM, IEEE, and the National Academy of Inventors (NAI).

is an Adjunct Associate Professor of Electrical and Computer Engineering at the University of Illinois at Urbana Champaign. He is also a co-director of Flashbots[X], a co-director of Initiative for CryptoCurrencies and Contracts (IC3), and a board member of Zcash Foundation. He has been an advisor to Cycles, Chainlink, Inco, Clique, and Pi2.

is William von Mueffling Professor of Business and the director of the Briger Family Digital Finance Lab at the Graduate School of Business at Columbia University. He is also an advisor to several firms in the blockchain and fintech space.

is the Thomas Kailath and Guanghan Xu Professor of Engineering at Stanford University. He is a member of the National Academy of Engineering, and a recipient of the Claude E. Shannon Award in 2017 and the IEEE Richard W. Hamming Medal in 2019. He is also a co-founder of the Babylon Bitcoin staking protocol, currently ranked 8th in TVL (total value locked) among all DeFi protocols.

is the Forrest G. Hamrick Professor of Engineering at Princeton University. He is a Core contributor to Sentient.