What Happened?
The United States recently released a report proposing a classification standard for digital assets, clearly delineating the jurisdiction of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Cryptocurrencies classified as “commodities” and their spot markets will be regulated by the CFTC, while “security” tokens will fall under the SEC’s oversight, aiming to resolve a long-standing regulatory gray area.
The report advocates for the active promotion of privately issued stablecoins, viewing them as tools to maintain the global dominance of the U.S. dollar. At the same time, it explicitly recommends legislation to prohibit the research and development of a Central Bank Digital Currency (CBDC) led by the U.S. government, demonstrating a clear stance of “supporting private innovation and opposing excessive government intervention.”
Although the report provides significant benefits for the cryptocurrency industry and proposes reforms in areas such as bank custody and tax systems, these are merely policy recommendations from the executive branch. Many of the report’s visions, especially the critical market structure, ultimately require corresponding legislation from the U.S. Congress to become law. Until then, the market will continue to face a degree of uncertainty.
The Report Recommends Dividing SEC and CFTC Jurisdiction and Promoting Stablecoin Development to Solidify the Dollar’s Position
Just three days after taking office, President Trump fulfilled his campaign promise by signing an executive order to establish a “Digital Asset Working Group” composed of officials including Treasury Secretary Scott Bessent and AI and Cryptocurrency Director David Sacks. The group officially released a comprehensive 166-page report today (31st), outlining a new era of cryptocurrency regulation in the U.S., hoping to reverse the previous Biden administration’s harsh policies against the blockchain industry.
Dubbed by government officials as “the most comprehensive digital asset policy report ever,” this document establishes several key priority areas for the White House moving forward. The core recommendation is to create a clear “taxonomy” for digital assets, clearly defining which cryptocurrencies should be considered “securities” and which should be classified as “commodities.”
The report suggests that the regulation of digital assets in the future should be shared between the SEC and the CFTC. Cryptocurrencies defined as “commodity tokens” and their spot markets will be regulated by the CFTC, while other tokens identified as securities will continue to be overseen by the SEC.
The report points out that a clearly defined market structure will help the U.S. become a leader in the global digital asset space. In response, SEC Commissioner Paul Atkins stated, “A rational regulatory framework for digital assets is the best way to catalyze U.S. innovation, protect investors from fraud, and maintain our capital markets’ leading position.”
Embracing Stablecoins, Easing Banking Restrictions, and Tax Reform
In the realm of stablecoins and payments, the report emphasizes the importance of embracing and regulating stablecoins, viewing them as a key tool for maintaining the global dominance of the U.S. dollar.
The report urges Congress to promptly pass relevant rules in the stablecoin legislation known as the Genius Act. Concurrently, it recommends that Congress pass the CBDC Anti-Surveillance State Act, prohibiting any research and development of Central Bank Digital Currency (CBDC) in the U.S.
Interestingly, the report acknowledges that stablecoins possess some functionalities similar to CBDCs; for instance, “stablecoin issuers can coordinate with law enforcement to freeze and seize assets to combat illegal usage.”
Moreover, the report suggests easing restrictions on the banking sector, including simplifying the process for banks to apply for special licenses and allowing banks to offer digital asset services such as cryptocurrency custody to clients.
Regarding taxation, the report calls on Congress to craft a new tax policy tailored for cryptocurrencies, treating them as a new asset class and considering the tax treatment of unique activities like staking.
Challenges and Unfinished Business in U.S. Crypto Regulation
Despite the report realizing several of Trump’s campaign promises and being viewed as a significant victory for the cryptocurrency industry, many key issues remain unresolved. For example, the specific scale and execution details of the national “Bitcoin Strategic Reserve” that Trump promised are not mentioned in the report. Officials at the press conference indicated that the focus of the report is on the regulatory framework, and more information regarding reserves will be disclosed in the future.
More importantly, the report acknowledges that the implementation of its policies still depends on the legislative process in Congress. Although there is consensus in both chambers regarding the stablecoin legislation, the more comprehensive “Market Structure Bill” regulating cryptocurrency issuance and exchange operations is still under heated debate.
The Trump administration regards the House version of the Clarity Act as a “guiding light” for market structure legislation, but until this bill is formally passed, many market participants will remain in a regulatory gray area regarding key aspects such as registration, custody, and trading.
Clearly, the White House’s work has only just begun. This report marks a significant shift in U.S. cryptocurrency policy, but its true effectiveness will depend on subsequent legislation and implementation by Congress and various federal agencies.
References: Fortune, Cointelegraph