Trump’s Crypto Regulatory Framework: A New Era for Digital Assets?

The working group established by US President Donald Trump has finally released its highly anticipated report on the regulation of digital assets in the United States. The report outlines a comprehensive framework for the crypto industry, covering everything from market structure and supervision to taxation and stablecoins. One of the key takeaways is the proposed “taxonomy” of digital assets, which aims to clearly define which cryptocurrencies are securities and which are commodities.

Shared Supervision and Taxonomy

The report recommends that the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) share supervisory responsibilities for digital assets. The CFTC would focus on monitoring spot crypto markets, while the SEC would oversee securities. This approach is expected to provide clarity and consistency in the regulation of digital assets. The working group also emphasizes the importance of establishing a clear market structure, which would make the United States a global leader in digital assets.

A Rational Regulatory Framework

According to the report, a well-defined regulatory framework is essential for catalyzing American innovation, protecting investors from fraud, and maintaining the country’s position as a global financial hub. SEC Chairman Paul Atkins agrees, stating that a rational regulatory framework is the best way to promote innovation and protect investors. The report’s authors also highlight the need for clearer rules as adoption grows, which would help to build trust and confidence in the crypto market.

Bank Regulations and Stablecoins

The working group proposes that bank regulations be relaxed and clearly defined, allowing banks to custody crypto and offer digital wealth services to customers. The report also discusses the importance of stablecoins and their potential to protect the hegemony of the US dollar. However, the authors caution against the development of a central bank digital currency (CBDC), citing concerns about surveillance and control. Instead, they recommend that Congress adopt a CBDC anti-surveillance state and ban the research and development of a digital central bank currency in the United States.

Taxation and Clear Guidelines

Finally, the report recommends that Congress establish clear guidelines for the taxation of cryptocurrencies, taking into account their unique characteristics as a new class of assets. The authors suggest that digital assets should be subject to modified versions of tax rules that apply to securities or commodities for income tax purposes. This would provide clarity and consistency for investors and help to promote the growth of the crypto industry.

Overall, the report provides a comprehensive framework for the regulation of digital assets in the United States. While it’s unclear how the recommendations will be implemented, one thing is certain – the crypto industry is eager for clearer rules and regulations. As the industry continues to evolve, it’s likely that we’ll see significant developments in the coming months and years.