Digital Asset Advisory From President's Working Group Released
In a bid to establish the United States as a global leader in digital asset markets, President Trump's Working Group on Digital Asset Markets has put forward a series of recommendations. The group, established by Executive Order 14178, consists of officials throughout the Federal government.
The Working Group's report provides a roadmap to make the US the "crypto capital of the world." Here are some key recommendations:
Regulatory Oversight and Market Framework
The Working Group recommends Congress enact legislation to eliminate regulatory gaps by giving the Commodity Futures Trading Commission (CFTC) authority to oversee spot markets for non-security digital assets. This aims to create a comprehensive, fit-for-purpose regulatory framework that supports growth, innovation, consumer protection, and U.S. leadership in digital assets.
Support for DeFi and Innovation
The report urges embracing decentralized finance (DeFi) technology and integrating it into mainstream finance, signaling a policy shift toward acceptance and facilitation of new blockchain-based financial models.
Regulatory Clarity for Market Participants
The Working Group calls for the SEC and CFTC to use their existing authorities to provide immediate clarity on crypto-related activities such as registration, custody, trading, and recordkeeping. They also recommend enabling innovative financial products through tools like safe harbors and regulatory sandboxes to avoid bureaucratic delays.
Tax Fairness and Predictability
The Working Group stresses the importance of new legislation and guidance to address the unique characteristics of digital assets for tax purposes, aiming to ensure fairness and predictability that align with emerging technologies. This would help taxpayers understand federal tax obligations better and promote digital asset growth and use in the U.S.
Empowering Self-Custody
Among other recommendations, the report calls for Congress to affirm that individuals can custody their own crypto assets without a middleman, strengthening user autonomy and security.
Swift Implementation and Regulatory Reform
The SEC has committed to developing clear, simple rules for crypto asset distributions, custody, and trading, including considering temporary interpretative and exemptive actions to ensure legacy regulations do not stifle innovation.
Preventing Misuse of Authorities and Protecting Privacy
The Working Group recommends regulators to prevent the misuse of authorities to target law-abiding citizens and protect citizens' privacy. They also recommend Congress to take additional action to protect privacy and civil liberties by passing the Anti-CBDC Surveillance State Act.
Clarifying Anti-Money Laundering (AML) Obligations and Reporting
The Working Group recommends clarity regarding Anti-Money Laundering (AML) obligations and reporting for digital asset markets.
Treating Digital Assets as a New Class of Assets
The Working Group recommends Congress to enact legislation that treats digital assets as a new class of assets subject to modified versions of tax rules applicable to securities or commodities for Federal income tax purposes.
Reinforcing the Importance of Self-Custody and AML/CFT Obligations in DeFi
The Working Group recommends Congress to reinforce the importance of self-custody and clarify AML/CFT obligations of actors within the decentralized finance ecosystem.
Implementing the GENIUS Act and Additional Proposals
The Working Group recommends that Treasury and the banking agencies faithfully and expeditiously implement the GENIUS Act, which creates a Federal regulatory framework for stablecoins. They also recommend regulatory and legislative proposals to advance digital asset markets.
Lastly, the Working Group recommends Treasury and the IRS to review previously issued guidance on the tax treatment of activities like mining and staking. They also recommend reducing burdens on taxpayers by publishing guidance on CAMT, wrapping transactions, and de minimis receipts of digital assets.
These recommendations collectively aim to position the U.S. as the leader in blockchain and crypto technology, fostering a regulatory environment that balances innovation with consumer protection and ensures American dominance in digital asset markets.
- The Working Group suggests that Congress give the Commodity Futures Trading Commission authority to oversee spot markets for non-security digital assets, aiming to create a comprehensive regulatory framework that supports growth, innovation, consumer protection, and US leadership in digital assets.
- To facilitate new blockchain-based financial models, the Working Group urges both the SEC and CFTC to provide immediate clarity on crypto-related activities like registration, custody, trading, and recordkeeping, and to enable innovative financial products using tools like safe harbors and regulatory sandboxes.
- The SEC has committed to developing clear rules for crypto asset distributions, custody, and trading, and to consider temporary actions to ensure legacy regulations don't hinder innovation, while also preventing the misuse of authorities and protecting citizens' privacy.
