Edward Woodford is co-founder and CEO of Zero Hash, a crypto infrastructure platform powering digital asset products for financial services. Previously he co-founded Seed CX, a US-based CFTC-registered derivatives execution venue. Under his leadership, Zero Hash has processed over $45 billion in transactions and enabled Fortune 500 companies like Stripe and Franklin Templeton to integrate stablecoins.
Key takeaways
– The industry is overfocused on interest rates at the expense of other pressing issues.
– Accountability is essential when centralized parties use AI to preserve trust.
– Regulatory clarity by February is critical to avoid negative market consequences.
– The legal definition of security must be updated for effective crypto regulation.
– Filing and tax requirements for stablecoins could hinder practical adoption.
– Even new legislation would likely be followed by lengthy rulemaking periods.
– Regulation by enforcement and implication has created uncertainty and friction.
– Clear legislation is necessary for traditional finance to confidently engage with crypto.
– The promise of regulatory clarity is often overstated; many issues remain unresolved.
– Significant adoption has occurred despite regulatory challenges, and growth is likely to accelerate.
– Tokenization has become a meaningful revenue stream.
– Stablecoins should coexist with other payment methods to improve interoperability.
– The stablecoin market will fragment as more issuers emerge.
– AI agents are organizing and evolving, sometimes in decentralized ways.
The industry’s focus on interest rates
“The current focus on interest rates is overshadowing more pressing issues in the industry.” Woodford argues that disproportionate attention on interest rates distracts from structural, regulatory, and product-level challenges that deserve priority. He warns that misaligned focus could affect future development and calls for shifting attention to market structure, compliance frameworks, and practical utility.
Accountability in AI deployment
“Accountability is essential when AI is utilized by centralized parties.” Woodford emphasizes that centralized entities employing AI in financial contexts must be accountable to maintain trust and compliance. Clear accountability mechanisms are needed to prevent misuse, ensure reliability, and preserve the credibility of AI-enabled services in regulated environments.
Regulatory clarity and timing
“If regulatory clarity isn’t achieved by February, it could have a severely negative impact on the crypto market.” Timely clarification of rules is critical for market stability. Woodford stresses the need to update the definition of a security to avoid enforcement ambiguity: “Updating the definition of security is crucial for effective regulation in the crypto space.” Without clear rules, companies face uncertainty that can limit product launches and partnerships.
Challenges in stablecoin regulation
Woodford highlights practical problems in proposed reporting and tax rules for stablecoins, noting that “the requirement to file a ten ninety-nine for selling $10,000 of stablecoins could hinder their real-world application.” He warns that even if Congress passes a bill, extended rulemaking periods could delay actionable clarity, leaving businesses and users in limbo.
Regulation by enforcement
“Regulation by enforcement and regulation by implication have created significant challenges for the crypto industry.” Woodford explains that enforcement-driven approaches create uncertainty that deters public companies and institutional participants. Clarifying what constitutes a security would reduce reliance on enforcement as the primary regulatory tool: “You can effectively stop regulation by enforcement if you clarify what is a security.”
Traditional finance engagement
“Clarity in legislation is essential for traditional financial players to engage with crypto.” While regulatory clarity is important, Woodford cautions that it’s not a silver bullet—many operational and legal issues remain. Nevertheless, clearer laws would unlock broader participation from banks, asset managers, and payment networks.
Future growth and convergence
“The next two years will see significant growth and velocity in the crypto space.” Woodford expects rapid development and greater convergence between crypto firms and traditional financial services. Tokenization has grown into a significant revenue source, and firms that position themselves strategically can benefit from increased activity and product demand.
Stablecoins and payments
“Stablecoins should coexist with other payment methods and enhance global interoperability.” Woodford sees stablecoins as complementary to existing rails, offering enhanced interoperability and new use cases. Banks and payment networks view stablecoins as growth opportunities rather than purely competitive threats.
Fragmentation in the stablecoin market
“The stablecoin market will experience significant fragmentation with many more issuers.” More issuers increase complexity, which in turn raises the value of businesses that abstract away interoperability challenges. Fragmentation will force infrastructure providers to simplify interactions across multiple stablecoins for customers and partners.
AI agents and decentralized systems
“AI agents are forming communities and developing systems for self-improvement.” Woodford describes emergent behaviors among AI agents—replication across servers, community formation, and even novel communication strategies. Decentralized systems can improve AI resilience and autonomy, and the evolving behavior of agents is already influencing both technology and crypto sectors.
Conclusion
Woodford underscores that while regulatory clarity and stablecoins are central to broader adoption, the industry must address a wide array of legal, operational, and technological challenges. Accountability for AI, an updated security definition, pragmatic stablecoin rules, and reduced reliance on enforcement will all be important to sustain growth as the market accelerates over the next two years.
