The cloture vote, the CPI print, the FOMC decision, and the SEC’s 24-hour trading roundtable all fall in the same 10-day window. The outcome will shape crypto regulation for the rest of the decade. The United States Senate has 14…
Rep. Shelley Kloba, D-Kirkland, has introduced a privacy bill in the Legislature every year since 2021, none of which has reached the House floor due to disagreements over whether consumers should be able to sue. (Washington House Democrats Photo)
More than 20 states have now passed the “Washington model” of privacy legislation. Washington state hasn’t.
In the years since then-state Sen. Reuven Carlyle introduced the Washington State Privacy Act in 2019, the blueprint has been adopted across the country, mandating that companies get the consent of consumers before collecting sensitive personal data, and providing consumers with the right to correct and delete their details in those databases.
In its home state, the bill stalled in negotiations between the House and Senate two years in a row. Every year since, a comprehensive privacy bill has been introduced in the Washington state Legislature but has failed to pass.
Washington state Attorney General Nick Brown released his office’s first data privacy report Aug. 14, calling on lawmakers to pass a privacy law that would limit how much personal information companies can collect and keep in the first place.
But that proposal will face the same hurdle that has blocked efforts to pass a state privacy law for seven years: a fight over whether consumers should be able to sue companies that violate it.
Washington AG Nick Brown
“The attorney general supports greater data privacy protections for Washingtonians,” said Mike Faulk, a spokesperson for the AG’s office. “In our experience, this has proven to be a difficult subject for the Legislature to build consensus on.”
Experts say the stakes are rising as AI systems train on personal data that often falls outside Washington’s existing privacy protections. Without a baseline privacy law, they say, lawmakers also have less to build on when they try to regulate AI itself.
Rethinking privacy
AI has rendered some parts of the Washington model moot, while making others more necessary than ever, according to policy experts.
As states have begun to pass the first AI regulations, one of the highest priorities has been the regulation of AI-based high-risk decisions.
In Washington, for example, the state Legislature passed the Prior Authorization Transparency Act, which bars health insurers from using AI as the only basis to deny, delay or modify care. Washington state lawmakers also considered a bill to regulate the use of AI to make decisions of financial, educational, or legal consequence.
This is proving to be a much easier lift in states that passed the “Washington model,” often years before the current AI craze. That’s because Carlyle’s bill happened to include what’s now known as an automated decision-making technology (ADMT) opt-out clause, which granted residents the right to opt out of automated profiling when used for “legal or similarly significant effects.”
Algorithmic wage and price determinations, as well as AI-based healthcare and employment technologies, could be regulated under the pre-existing privacy act, or by tweaking those laws.
“The states that have passed automated decision making laws have done so on top of existing privacy laws,” said Cobun Zweifel-Keegan, a managing director at the International Association of Privacy Professionals (IAPP). “There’s already restrictions, or at least the beginnings of restrictions, on automated decision making baked into these privacy laws. It’s a natural model to build on top of.”
Meanwhile, AI has made it more dangerous to go without a privacy law, because an absence of privacy legislation means more personal data online for AI models to access, said Kara Williams, counsel at the Electronic Privacy Information Center.
Williams said data minimization could prevent or limit companies from repurposing personal data to train AI systems.
“It goes back to using the data for the purpose you collected it for,” Williams said. “Almost all of the data that companies have used to train AI systems or develop the algorithms that led to this moment were not collected for the purpose of training AI systems.”
Data minimization requires companies to restrict the collection and use of customer data to the service the customer requested. That often precludes secondary uses like selling it to a data broker.
The Washington attorney general’s privacy report also endorsed a data minimization standard, which the original Washington model does not include.
Carlyle said he might have written one in, if he were drafting the bill today.
“We live in an AI world with a giant vacuum in the sky, sucking up every ounce of data that exists on a person,” Carlyle said. “So I think the concept [of data minimization] makes some sense.”
Meanwhile, experts say AI makes some elements of the Washington model irrelevant.
Zweifel-Keegan of IAPP said those elements include the right to control, correct, and delete personal data, which was the bread and butter of Carlyle’s bill. Because LLMs are a weighted map of associated words, there is no straightforward way to selectively delete or change information once a model has been trained.
“That’s just fundamentally how LLMs work. They’re not a table where you can go to my name and see all the other records that are associated with me,” Zweifel-Keegan said. “You can’t go in and selectively delete information.”
While states around the country that have passed the Washington model are now seeking to revise its provisions to meet the AI moment, Washington state has no comprehensive privacy law to start with.
“AI is making us rethink some of our foundational expectations of what a privacy law does,” Zweifel-Keegan said. “Washington could be the place where that happens.”
The story of the “Washington model”
In 2019, when now-retired State Sen. Carlyle introduced the Washington State Privacy Act, it passed the Senate 46-1 before dying in the House. One year later, it passed both chambers but died after a long and heated fight in conference.
Some say the bill didn’t deserve to pass after being “rewritten” by tech lobbyists. Others say the lawmakers who opposed the bill let the perfect be the enemy of the good.
The original bill was based on an opt-out framework, also called “notice and consent,” which required a platform to present a privacy policy to users who consent to the collection of their data by continuing to use the platform. The bill’s sole enforcement mechanism was the state attorney general, and did not offer a private right of action for individuals to sue companies that violated the proposed rules.
In 2019, Carlyle was focused on establishing a baseline notion of consumer rights — one that could be revised later, as other states ultimately did.
“At that time we didn’t have a direct understanding that consumers have a right to correct or delete their personal data, we didn’t have an understanding of what opt out meant for advertising, or an understanding of data brokers and the role that they play,” Carlyle said.
His bill also established special protections for sensitive data and frameworks to hold corporations accountable for complying with transparency and disclosure requirements.
“Those were pretty novel pillars that didn’t exist,” Carlyle said. “That’s why it had a big effect on other state laws.”
By March 2021, Virginia had passed a privacy law closely modeled off of Carlyle’s template, and over the next few years, more than 20 other states did, too.
In Washington, meanwhile, no progress was made. After Microsoft endorsed the Senate bill in 2019, consumer advocacy groups and some state lawmakers said that the tech lobby’s influence had gone too far. The state House countered with a stronger privacy bill, premised on opt-in data collection frameworks and enforced by a private right of action.
Both the 2019 and 2020 legislative sessions ended in failed negotiations between the state Senate and House over their competing privacy laws. Every year since 2021, Rep. Shelley Kloba has introduced a bill that preserves the House’s stronger language. It has yet to make it to the House floor.
A potential compromise
The sticking point for Washington negotiators in 2019 and 2020 was the enforcement mechanism. Carlyle’s bill proposed state attorney general enforcement, while the House bill, led primarily by then-Rep. Zack Hudgins, included an additional private right of action.
Consumer advocacy groups are firm in their support for a private right of action as part of a data privacy law.
“Attorney general enforcement alone is not sufficient to enforce privacy laws, just because of limited resources and staff and funding that attorneys general across the country face,” said Williams, the EPIC counsel. “We need a stronger enforcement mechanism, like a private right of action, that would allow consumers to vindicate their own privacy rights and to take companies to court who have violated their privacy rights.”
For some in the tech industry, a private right of action is seen as unnecessarily harsh, stymieing innovation while AG enforcement would have sufficiently guaranteed compliance.
“I believe that the difference is, are you looking to get companies to comply and have clear enforcement or are you looking to punish?” said Rose Feliciano, TechNet executive director of policy for the Northwest United States. TechNet is a trade association that includes tech industry giants such as Amazon and Google.
Carlyle agreed, saying his efforts failed because the trial attorneys “were not enthusiastic about giving up a right of private action against big tech.” The insistence on letting individuals sue, he said, is a case of “perfect is the enemy of the good.”
“It’s the ultimate representation of, ‘we can’t have any regulation, any policy framework, any guidelines, any protections whatsoever, unless it’s a grand slam home run for individual lawsuits,'” he said.
The private right of action has continued to hold up privacy legislation.
Rep. Kloba’s alternative, the People’s Privacy Act, ties enforcement to the state’s Consumer Protection Act, under which a plaintiff’s private action can seek damages, attorney’s fees, and treble damages capped at $25,000. Her bill treats all violations, including failure to comply with records keeping and timely responses to consumer queries, with the same severity.
This winter, Kloba may be open to changing that. She said she’s willing to consider separating enforcement rules so that some violations would be eligible for a private right of action and others would be subject to civil penalties enforced by the attorney general’s office.
“Over the last eight years, various laws have been put in place in different states and we’ve seen them then go back and improve them over time,” she said, “and so I think it’s time to have that conversation.”
Republicans continue to criticize Democrats for dragging their feet when it comes to the long-awaited crypto Clarity Act.
Speaking to Fox News on Tuesday, Senator Bill Hagerty said that the U.S. could not afford to fall behind the rest of the world with digital asset regulation.
Lawmakers have just the next two days to vote on the Clarity Act before the Senate goes to recess. A bipartisan draft of the bill has been circulating among lawmakers but a number of Democrats are being pernickety over wording in the bill, say some Republicans.
JUST IN: Senator Bill Hagerty tells Fox Business "We're going to have to pass the Clarity Act."
"There's no way that we can allow the U.S. to fall behind in the digital assets arena." pic.twitter.com/mYwfu0JEVU
“I think the problem is, will we be able to pass this with Democrats right now, or are they going to let midterm politics get in the way,” Hagerty said.
He added: “Everything is moving digital around the world. The Genius Act was a major step forward to make certain that the digital dollar remains dominant in the world, but we need to follow it up with the remainder of the market. We’re going to have to pass the Clarity Act.”
Still, Republican majority leader John Thune told reporters on Monday that the bill would likely get at least an initial vote this week — despite lawmakers being inundated with other pieces of legislation.
A number of major financial institutions, lawmakers and companies have thrown their weight behind the new bill, which was passed in the house of representatives last year with strong bipartisan support.
Still, a number of Democrats have expressed concerns around the wording in the bill, saying in a statement that it needs work.
Republicans have alleged that this is just Democrats playing politics, and that the bill has already had a lot of changes.
Pro-crypto Senator Cynthia Lummis in particular has said that Democrats are deliberately holding back the bill.
Speaking on Fox Business Tuesday, former Republican Senator Pat Toomey mentioned that it was urgent to get the bill passed this week.
“I think it’s essential that the Senate pass this legislation this week,” he said. “The technology of the blockchain is very powerful — it has the ability to transform finance and I think other parts of our economy, but there needs to be legal clarity.”
The Clarity Act has been in a deadlock for much of 2026, partially because the banking lobby raised concerns over stablecoin yield.
An updated bill of the Clarity Act was introduced in July addressing ethics concerns. It now bans government officials and their families from issuing or promoting crypto.
If passed, the Clarity Act would create a regulatory framework for the cryptocurrency market.
Japan’s latest crypto law changes have revived the country’s spot Bitcoin ETF discussion, but the important part is the timeline. This is not an approval story today. It is a regulatory groundwork story, and that means investors need to be patient.
The Japanese Cabinet submitted the Bill for Partially Amending the Financial Instruments and Exchange Act and the Payment Services Act to the 221st session of the National Diet, moving crypto assets toward treatment as financial assets under the FIEA rather than only payment instruments under the Payment Services Act.
That sounds technical, because it is. But it could matter a lot.
If crypto assets sit under a financial-assets framework, Japan’s Financial Services Agency has a clearer path to build rules for investment products, including the kind of structure that could eventually support spot Bitcoin ETFs.
The key word is eventually.
TL;DR
Japan is moving crypto assets toward treatment under the Financial Instruments and Exchange Act.
The change may help create a regulatory foundation for future spot Bitcoin ETFs.
Spot Bitcoin ETFs are not currently approved or trading in Japan.
Why Reclassification Matters
Legal classification shapes what financial products can exist.
If crypto is treated mainly as a payment instrument, regulators focus on exchange use, transfers, custody, and consumer protection. If crypto is treated as a financial asset, the conversation widens into investment products, disclosure rules, market conduct, taxation, investor eligibility, and fund structures.
That is why Japan’s FIEA shift matters.
It does not automatically create a Bitcoin ETF. But it moves crypto closer to the legal category where investment trust rules and securities-market oversight can do the work.
For asset managers, that is important because ETF products need a clear regulatory foundation. They need rules around custody, valuation, creation and redemption, market surveillance, disclosures, and investor protection. Those rules are hard to build if the underlying asset sits in the wrong legal bucket.
Japan’s latest legislation starts to solve that structural problem.
Japan Has Been Cautious For A Reason
Japan has a long history with crypto, and not all of it has been easy.
The country was one of the earliest major markets to regulate crypto exchanges seriously, partly because of painful exchange failures in earlier cycles. That history made Japanese regulators cautious, especially around retail investor protection and custody standards.
So Japan moving slowly on spot Bitcoin ETFs is not surprising.
The US approved spot Bitcoin ETFs after years of rejection, litigation, surveillance-sharing debates, and market-structure scrutiny. Other jurisdictions have taken their own routes. Japan’s process was always likely to be careful, rule-heavy, and tied to broader legal reforms.
That may frustrate traders who want a quick ETF headline, but it is consistent with how Japan tends to handle financial regulation.
The upside is that once a framework is in place, it may be more durable.
2028 Is A Target, Not A Trading Date
The 2028 timeline needs to be treated properly.
A target launch window does not mean products are approved. It does not mean investors can buy a Japanese spot Bitcoin ETF now. It does not mean every asset manager is ready to launch immediately.
It means regulators and financial institutions have a possible runway.
That runway could involve final rules, investment trust amendments, tax adjustments, custody standards, market infrastructure, and product filings. Firms such as large brokers and asset managers may prepare in anticipation, but preparation is not approval.
This is where crypto headlines often get too excited.
“Japan moves toward Bitcoin ETFs” is fair. “Japan approves Bitcoin ETFs” is not.
The difference matters because investors can misread regulatory progress as immediate market access.
Tax And Product Design May Be Just As Important
Japan’s crypto ETF discussion is not only about listing permission.
Tax treatment matters too. If crypto products are taxed in a way that makes them unattractive compared with other investment vehicles, ETF demand may be weaker than expected. If tax rules become more investor-friendly, regulated products could become more competitive.
Product design also matters.
Will Japan allow only Bitcoin first? Could Ethereum follow? What custody rules will apply? Will products be available to retail investors? What disclosure standards will asset managers face? How will exchanges and market makers support liquidity?
Those details will determine whether a future ETF market is meaningful or merely symbolic.
Japan Could Become A Major Asian ETF Market
If the framework develops properly, Japan could become an important Asian market for regulated crypto investment products.
It has deep capital markets, a large retail investor base, major financial institutions, and a strong regulatory culture. A spot Bitcoin ETF in Japan would not only be another product. It would signal that one of Asia’s most important financial systems is comfortable putting Bitcoin into a mainstream investment wrapper.
That would matter for regional adoption.
But the path is still long.
The latest legislation is a foundation, not the finished building. The FSA still needs to shape the rules, institutions need to prepare products, and lawmakers may still need to settle related tax and investor-protection questions.
So the right takeaway is measured optimism.
Japan is not racing into spot Bitcoin ETFs. It is creating the legal conditions that could make them possible later. For a market as cautious and important as Japan, that is still a meaningful step.
Russia’s State Duma has moved crypto regulation toward its final legislative stage, advancing a bill that would establish formal rules for mining, exchanges, and cross-border settlement activity.
The bill, listed as No. 636524-8, is aimed at creating a statutory framework for parts of the digital asset sector that have already become active inside and around Russia’s economy. The measures include mandatory registries for industrial miners, licensing requirements for crypto exchanges, and legal treatment for certain cross-border settlement uses.
That makes the legislation important even for markets outside Russia.
Crypto regulation is increasingly becoming a matter of national payment strategy, energy policy, sanctions exposure, and institutional oversight. Russia’s approach reflects that wider trend: governments are no longer asking whether crypto exists. They are deciding how to control it.
TL;DR
Russia’s State Duma has advanced crypto legislation toward final readings.
The bill covers industrial mining registries, exchange licensing, and cross-border settlement.
The development matters because crypto regulation is becoming part of national financial infrastructure.
Why Russia’s Crypto Law Matters
Russia has been a major part of the crypto conversation for years, especially around mining and cross-border payments.
The country has access to energy resources, a technically skilled population, and strong incentives to explore alternative settlement channels. At the same time, it faces sanctions pressure and a complicated relationship with the global financial system.
That makes crypto regulation more than a domestic compliance question.
If Russia formalizes rules for mining and cross-border crypto settlement, it could affect exchange oversight, industrial power usage, institutional access, and international payment flows.
The bill appears to create a more structured environment rather than leaving activity in a grey zone.
For miners, mandatory registries could bring more oversight but also more legal clarity. For exchanges, licensing rules could define who is allowed to operate. For cross-border settlement, the law could give state-approved entities clearer permission to use digital assets in specific contexts.
Mining Is A Core Piece
Mining is one of the most important parts of Russia’s crypto policy debate.
Industrial mining consumes power, creates exportable digital assets, and can become a source of revenue. But it also raises questions around grid stability, taxation, regional energy use, and illegal operations.
A registry model gives the state more visibility.
That may help authorities separate approved industrial miners from informal or unauthorized activity. It can also create a route for taxation and compliance monitoring.
For the mining industry, the trade-off is familiar.
Regulation can add reporting burdens and costs, but it can also reduce uncertainty. Companies operating at scale often prefer a defined legal framework to constant ambiguity.
That is especially true when mining is connected to energy contracts, data centre infrastructure, and capital investment.
Cross-Border Settlement Is The Sensitive Part
The cross-border settlement provisions are likely to attract the most international attention.
Digital assets can move across borders without relying on traditional correspondent banking rails. That makes them useful in some trade contexts, but also sensitive from a sanctions and compliance standpoint.
Russia’s interest in crypto settlement should be viewed through that lens.
A legal framework could allow certain companies or institutions to use digital assets in international trade under state-approved conditions. That would not mean all crypto payments become legal or unrestricted. It would mean Russia is creating a formal route for specific use cases.
The key is how narrow or broad those permissions become.
If the law is tightly controlled, it may mostly support selected trade channels. If it is broader, it could create a larger domestic market for crypto-linked settlement services.
Either way, the development is part of a global pattern. Countries are exploring how digital assets fit into payment systems, sanctions policy, and trade infrastructure.
Regulation Does Not Mean Liberalization
It is important not to confuse regulation with openness.
A government can legalize certain crypto activities while still maintaining strict control. Licensing, registries, and approved settlement channels often mean more oversight, not less.
Russia’s bill appears to move crypto into a more formal state-supervised framework.
That may help compliant firms, but it may also limit unlicensed activity. Exchanges and miners could face clearer obligations, and cross-border settlement may be restricted to approved participants.
For markets, the important signal is that crypto continues to move into formal legal systems.
The early era of ignoring or banning digital assets is giving way to more detailed frameworks. Some are investor-focused. Some are enforcement-focused. Some are designed around national payment strategy.
Russia’s legislation fits the third category especially closely.
The final details will matter, but the direction is clear: the State Duma is moving crypto regulation deeper into law, and the result could shape how mining, exchanges, and settlement operate in one of the world’s most geopolitically sensitive markets.
This article is based on Russian State Duma legislative materials.
This article was written by the News Desk and edited by Samuel Rae.
This report is based on information released in official primary source disclosures at primary source documentation.
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