A new coalition is forming,  focused on crypto vaults, an increasingly popular mechanism for depositing digital assets and earning yield.

On Friday, the Crypto Council for Innovation launched the Vault Coalition, with backing led by Galaxy and Morpho. BitGo, a16z, the Avalanche Policy Coalition, and Sharplink are also part of the coalition.

Crypto vaults are smart contracts that pool together deposited funds that are then generated to create yield. The process then gives each depositor a vault receipt token representing their share. Over the past year, firms have launched vaults, including Kraken and Tesseract.

Despite their growing experimentation, CCI said vaults are subject to regulatory ambiguity.

“We are at an inflection point," said Morpho General Counsel Christopher Robins in the statement. "Institutional participants are prepared to deploy, but they require a clear legal roadmap to move forward. The Vault Coalition exists to transform industry expertise into the foundational standards the market demands."

Regulators in the U.S. have opened doors for digital assets amid a friendlier administration to the industry. Over the past year, the Securities and Exchange Commission has put forth a token taxonomy to clarify its stance on cryptocurrencies. SEC Chair Paul Atkins has also embarked on "Project Crypto" to update the agency's rules around digital assets.

CCI also references a speech Atkins made last month, where he said the agency needs to clarify how its regulatory framework applies to software applications and specifically called for clarity around crypto vaults.

The new coalition will focus on writing legal analysis, developing policy principles, and focusing on its regulatory treatment, CCI said.

"Regulatory treatment of vault structures should be grounded in how they actually function, not in analogies to incumbent financial products that do not map onto the underlying technology," the group said in the statement.