On July 30, 2025, the President’s Working Group on Digital Asset Markets released a comprehensive report recommending substantial regulatory action and legislative proposals aimed at providing clearer pathways for crypto issuance, trading, and banking engagement. In the absence of new legislation, the report urges securities and derivatives regulators—the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC)—to utilize existing authorities to offer immediate regulatory clarity.
The report directs the SEC to develop safe harbors and exemptions tailored to crypto-related activities, including securities distributions involving digital assets and token airdrops. It also proposes an innovation exemption to enable new business models, echoing prior suggestions by SEC Chairman Paul Atkins (previously discussed here). The CFTC, in parallel, is tasked with clarifying the commodities status of tokens, overseeing spot markets for non-security digital assets, detailing requirements for crypto collateral usage, and addressing decentralized finance registration obligations.
Banking regulators are encouraged to rapidly implement standards under the recently enacted Genius Act, designed to guide stablecoin issuers (previously discussed here). Additionally, the report explicitly discourages exploring a U.S. central bank digital currency, instead encouraging lawmakers to restrict Federal Reserve involvement in such initiatives.
To further support crypto integration within traditional banking, the report advises banking agencies to clearly delineate permissible crypto activities such as market-making and tokenization. It emphasizes the need for updated, crypto-specific capital requirements and streamlined access to banking infrastructure for crypto firms, recommending defined deadlines and automatic approvals for eligible entities.
Putting It Into Practice: The report is the latest in the flurry of crypto-focused regulatory activity that has taken place under the Trump administration and underscores the administration’s intentional approach to crypto rulemaking. Entities involved in digital asset issuance, trading, or custody should proactively evaluate their business models against the forthcoming safe harbors, exemptions, and regulatory guidance from the SEC and CFTC. Given the potential reduction of regulatory friction, institutions previously hesitant to engage in crypto-related business may now find greater clarity and opportunity, though vigilance in compliance and risk management remains essential.
