United States Unveils Regulatory Framework
Since President Donald Trump requested the establishment of a Digital Asset Market Working Group in January of this year, and the subsequent submission of a report detailing recommendations for a digital asset regulatory framework, this report has been highly anticipated. Some in the cryptocurrency community even claimed that this report would become the “regulatory bible” or guide for the industry.
Now, this “regulatory bible” has finally been released. The government led by President Donald Trump published the most detailed digital asset policy report on Wednesday (July 30). According to statistics, this 166-page report on digital assets mentions cryptocurrencies 391 times, Bitcoin 130 times, DeFi 32 times, and Ethereum 28 times.
The report outlines a comprehensive regulatory roadmap for cryptocurrencies, presenting policy recommendations across multiple crypto-related domains. These can be categorized into five main areas.
Positioning the United States as a Leader in the Digital Asset Market
The working group recommends that Congress should enact the following legislation based on bipartisan support for the CLARITY Act in the House of Representatives:
- Authorize the CFTC to regulate the spot market for non-securities digital assets to eliminate existing regulatory gaps.
- Embrace DeFi technology and recognize its potential for integration into mainstream finance.
- The SEC and CFTC should leverage their existing powers:
- To initiate digital asset trading at the federal level immediately and clarify issues like registration, custody, trading, and record-keeping for market participants.
- To use tools such as safe harbors and regulatory sandboxes to ensure that innovative financial products benefit consumers without bureaucratic delays.
Modernizing Digital Asset Banking Regulations
The report states that the Trump administration has completely terminated “Operation Choke Point 2.0,” committing to ending regulatory measures that refuse banking services to the digital asset industry. The working group recommends that regulators take the following additional actions:
- Restart cryptocurrency innovation initiatives, clarifying the activities banks are permitted to engage in regarding custody, tokenization, stablecoin issuance, and blockchain applications.
- Increase transparency in the process for institutions obtaining banking licenses or reserve bank master accounts.
- Ensure that banking capital rules align with the actual risks of digital assets, rather than solely their existence on a distributed ledger.
Strengthening the Dollar’s Position
The Treasury and banking agencies should faithfully and promptly implement the GENIUS Act. Congress should take further action to codify the provisions of the executive order prohibiting the U.S. central bank digital currency through the Anti-Central Bank Digital Currency Monitoring State Act to protect privacy and civil liberties.
Combating Illegal Finance in the Digital Age
The Treasury and relevant regulatory agencies should clarify the obligations and reporting requirements under the Bank Secrecy Act (BSA). Congress should emphasize the importance of self-custody and clearly define anti-money laundering/counter-terrorism financing obligations for participants in the DeFi ecosystem. Regulatory agencies should work to prevent abuse of power targeting the lawful activities of citizens and protect citizen privacy.
Ensuring Fairness and Predictability in Digital Asset Taxation
The Treasury and the IRS should issue guidance on CAMT (Corporate Alternative Minimum Tax), packaged transactions, and minimum income related to digital assets to alleviate taxpayer burden. The Treasury and the IRS should review previously issued guidelines on the tax treatment of activities such as mining and staking. Congress should enact legislation to treat digital assets as a new asset class and amend tax rules applicable to securities or commodities according to federal income tax regulations, adding digital assets to the list of assets subject to wash sale rules.
The U.S. Sets Its Sights on Cryptocurrency: Defining the Future of DeFi and Stablecoins
Following the release of the report, the industry widely views it as a positive signal for Trump’s cryptocurrency agenda. Ji Kim, CEO of the Crypto Council for Innovation, stated, “The release of the Working Group’s digital asset report marks a unified effort by the government to ensure that the U.S. maintains a leading position in the golden age of cryptocurrency. From DeFi, tokenization, market structure, CIF, taxation, and more — this report covers everything. We now have clear regulatory guidance to ensure continued growth.”
Rebecca Rettig, legal counsel at Jito Labs, also expressed her endorsement following the report’s publication, stating, “While there is still much work to be done, this excellent roadmap provides guidance for achieving regulatory transparency in the U.S. cryptocurrency industry.”
However, it is worth noting that while the report represents a “significant victory” for the cryptocurrency industry, it does not reveal new initiatives or delve into specific policy measures, leaving several unresolved issues, including those related to the future scale of federal government cryptocurrency reserves. An official at the press conference noted that the report’s focus is on the regulatory framework rather than reserves and indicated that more information should be forthcoming.
Furthermore, the report acknowledges that Congress has yet to pass the Market Structure Bill, which imposes many constraints on the industry. This bill would establish a more comprehensive regulatory framework for the issuance of cryptocurrencies and the operation of exchanges like Coinbase. Although the report encourages the SEC and CFTC to provide clearer guidance on key functions such as registration, custody, and trading, many market participants will remain in uncertainty as Congress continues to debate legislation.
While the report may not have “lived up to expectations,” it could very well be as U.S. officials have stated: “They have laid a solid foundation for the construction of this house.”
This article is a collaborative repost from: PANews