The report reflects collaboration across federal agencies and aims to establish US leadership in digital assets through forward-thinking policy and a clear regulatory framework.
On July 30, 2025, the Presidential Working Group on Digital Asset Markets (the Working Group or PWG)1 issued a comprehensive report on digital assets, “Recommendations to Strengthen American Leadership in Digital Financial Technology” (the Report).
The Report (and accompanying fact sheet) was issued pursuant to President Trump’s January 23, 2025 executive order on digital assets, “Strengthening American Leadership in Digital Financial Technology” (the Order) (for more information, see this Latham blog post). The Order tasked the Working Group to issue a report within 180 days, with the goal of developing a federal regulatory framework governing the issuance and operation of digital assets in the US.
The Report embodies the administration’s pro-crypto stance. The Working Group provides a broad overview of blockchain technology and the current regulatory framework for digital assets, as well as more than 100 short- and long-term regulatory and legislative recommendations. These recommendations are designed to guide and expedite legislation, rulemaking, and guidance for digital assets and financial market participants who provide (or intend to provide) digital asset products and services. Through their implementation, “policymakers can ensure that the [US] leads the blockchain revolution and ushers in the Golden Age of Crypto.”
Many of the recommendations in the Report are reflected in legislation that has already been enacted or is currently under consideration:
- Stablecoins — the Guiding and Establishing National Innovation for US Stablecoins Act (the GENIUS Act), signed into law by President Trump on July 18, 2025, and which the Working Group “urges all relevant federal agencies . . . to faithfully and expeditiously implement” (for more information, see this Latham blog post); and
- Digital assets market structure — the Digital Asset Market Clarity (CLARITY) Act, passed in the House on July 17, 2025 and currently under consideration in the Senate. The Working Group strongly recommends that Congress quickly enacts market structure legislation (such as the CLARITY Act) “to ensure the most cost-efficient and pro-innovation regulatory structure for digital assets” (for more information, see the Latham US Crypto Policy Tracker).
Irrespective of future congressional action, however, the Working Group recommends that the SEC and CFTC use their existing authorities to provide “fulsome regulatory clarity that best keeps blockchain-based innovation within the United States.”
The Working Group underscores the need to reinforce the role of the US dollar in the digital asset era, especially by promoting the adoption of dollar-backed stablecoins. However, the Working Group firmly opposes any initiatives to establish, issue, or promote a US central bank digital currency (CBDC), prioritizing privacy, civil liberties, and the prevention of government overreach. The Report therefore supports legislation under consideration in Congress that would expressly prohibit the adoption of a CBDC (e.g., the Anti-CBDC Surveillance State Act, which was passed by the House of Representatives on July 17, 2025).
Key Working Group Recommendations
Banking Regulators
The Working Group encourages the federal banking regulators (who are not represented in the Working Group) to “relaunch crypto innovation efforts” and recommends that the agencies:
- Ensure that guidance on risk management and bank engagement is technology-neutral and that expectations regarding offering banking services do not discriminate against lawful businesses solely due to their industry.
- Clarify or expand the recognized, permissible digital asset activities in which banks may engage, consistent with applicable law.
- Clarify supervisory expectations on safe and sound conduct in bank engagement with digital assets, private and permissionless blockchains, and tokenized deposits.
- Provide additional guidance on technical best practices on custody of digital assets.
- Provide clarity on the permissibility for depository institutions to hold digital assets on their balance sheet.
- Provide clear risk-based guidelines to determine the permissibility of bank tokenization activities, including tokenization of deposits.
- Provide clarity and transparency for eligible financial institutions seeking to obtain a bank charter or a Reserve Bank master account.
- Ensure parity in permissibility between bank charter types.
- Ensure that agency examination teams and banks are properly equipped to adopt current risk management principles to digital asset technologies.
- Provide guidance (along with Treasury) for traditional financial institutions to help clarify AML/CFT obligations and expectations with regard to providing digital asset services.
- Clarify the circumstances under which tokenized assets and tokenized asset collateral would be subject to the same capital and liquidity treatment as the underlying asset or collateral.
In addition, the Working Group recommends that the US should adopt capital requirements for bank activities involving digital assets that “accurately reflect the risk of the asset or activity.” Further, it advocates that the Basel Committee on Banking Supervision should revisit its cryptoasset standards 2 “to ensure similar treatment to U.S. capital requirements.”
SEC
The Working Group recommends that the SEC employ its current rulemaking and exemptive authority under existing statutes to:
- Establish a fit-for-purpose exemption from registration under the Securities Act for digital asset security distributions.
- Establish a time-limited safe harbor or exemption from certain securities law requirements for digital assets that may be subject to an investment contract because they are not yet fully functional or associated with a sufficiently decentralized network.
- This recommendation is substantially similar to SEC Commissioner Hester Peirce’s 2020-21 Token Safe Harbor proposal, that sought to provide a time-limited exemption for token-based projects seeking to raise capital to develop decentralized networks (for more information, see this Latham blog post).
- Establish a safe harbor for certain airdrops from registration requirements and characterizations as “sales” under the Securities Act.
- Enable non-security digital assets (excluding stablecoins) that are tied to an investment contract to be traded on non-SEC registered trading platforms immediately following the primary distribution of the digital asset.
- SEC Chair Paul Atkins has already requested that the SEC Staff evaluate the SEC’s ability to “permit non-security crypto assets that are subject to an investment contract to trade on trading venues that are not registered with the Commission.” And CFTC Acting Chair Pham has announced that the first initiative in the CFTC’s new Crypto Sprint would seek to make this a reality, proposing that the CFTC use its exemptive authority to extend the current registration and compliance requirements for certain CFTC registrants to allow for the listing and trading of non-security spot crypto assets (see below, Endorsements and Initiatives).
- Provide relief for certain DeFi service providers from the broker-dealer, exchange, and clearing agency registration provisions of the Exchange Act.
- Amend Regulation ATS (or create a comparable framework) to better accommodate trading of non-security digital assets alongside securities under a regulatory framework that is fit-for-purpose for digital asset trading.
- Consider amendments to existing regulations to better accommodate tokenization of securities.
- Provide clarity on the custody of digital asset securities.
In addition, the Working Group recommends that Congress enact market structure legislation that grants SEC registrants the ability to offer the trading of digital asset securities as well as non-security digital assets.
CFTC
The Working Group recommends that the CFTC employ its current rulemaking, interpretative, and exemptive authority under law to:
- Provide guidance as to what digital assets may be considered commodities under the Commodity Exchange Act and subject to requirements thereunder.
- Provide guidance to designated contract markets regarding the listing of leveraged, margined, or financed retail commodity transactions on digital assets.
- Consider updating rules and guidance for digital asset investment vehicles that may be considered “commodity pools,” or digital asset investment managers that may be required to register as “commodity pool operators” (for more information, see this Latham blog post).
- Provide clarity on the applicability of various registration requirements to DeFi activities, smart contract protocols, or decentralized autonomous organizations (DAOs).
- Provide guidance to futures commission merchants in calculating and administering segregation obligations when digital assets are held on behalf of customers.
- Collaborate with FinCEN to provide guidance regarding customer identification programs and KYC requirements applicable to certain types of registrants.
- Provide guidance on derivatives clearing organization acceptance of digital asset collateral (including payment stablecoins).
- Provide guidance on the adoption of tokenized non-cash collateral as regulatory margin.
- Consider how existing rules could be amended to enable the use of blockchain-based derivatives.
In addition, the Working Group recommends that Congress enacts market structure legislation that grants:
- the CFTC clear authority to regulate spot markets in non-security digital assets, and that allows CFTC registrants to offer the trading of digital commodity derivatives, retail digital commodity transactions
- other CFTC-jurisdictional products alongside non-security digital assets
Treasury
The Working Group recommends that the Treasury:
- Promote the US as a leader in establishing international legal, regulatory, and technical standards and best practices for new payments technologies that reflect US interests and values.
- Promote private sector innovation in cross-border payments and financial market technologies.
- Lead initiatives to upgrade domestic payment systems, financial market infrastructure, and cross-border payment systems, to help protect the primacy of the dollar-based international monetary system.
- Adopt rules under the GENIUS Act to treat permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act (for more information, see this Latham Client Alert).
- Identify (along with the federal banking agencies) areas of uncertainty under the Bank Secrecy Act (BSA) related to anti-money laundering and countering the financing of terrorism (AML/CFT) for traditional financial institutions providing digital asset services; and provide guidance to help clarify AML/CFT obligations and expectations with regards to providing digital asset services.
- The Working Group also called on Congress to codify principles regarding BSA obligations for money transmitters. Of note, the Working Group recommends that “[a] software provider that does not maintain total independent control over value should not be considered as engaged in money transmission for purposes of the BSA.”
- Administer a strategic bitcoin reserve and national digital asset stockpile consistent with President Trump’s March 6, 2025 executive order (for more information, see this Latham blog post), both of which should be capitalized by forfeited digital assets owned by the US government. Treasury (along with the Commerce Department) should also develop strategies to acquire additional bitcoin “in ways that are budget neutral and do not impose incremental costs on [US] taxpayers.”
- Evaluate whether and how existing guidance from Treasury’s Financial Crimes Enforcement Network (FinCEN) related to the digital asset sector3 should be rescinded, modified, or updated to reflect legislative and regulatory changes. Further, to consider whether additional guidance would be helpful for particular market segments or for application of particular BSA obligations.
- Issue a request for information to solicit Office of Foreign Assets Control (OFAC) sanctions compliance feedback from digital asset industry participants, “to understand ongoing developments and innovations and gaps in existing OFAC guidance as well as to identify opportunities for enhanced private sector collaboration.” Additionally, to consider updating OFAC’s existing guidance related to digital assets.4
- In collaboration with the Internal Revenue Service (IRS), update the IRS FAQs on digital assets and issue guidance on the tax treatment of certain products and arrangements involving digital assets (e.g., whether a trust holding digital assets that stakes those assets and receives staking rewards can qualify as an investment trust treated as a grantor trust; whether wrapping and unwrapping transactions are taxable transactions; whether digital assets or payment stablecoins are subject to the wash sale rule; and tax treatment of de minimis receipts of digital assets, such as airdrops, staking, hard forks, and mining rewards).
Endorsements and Initiatives
Officials have committed to acting swiftly to implement the Report’s recommendations, demonstrating their alignment with the administration’s strategy to establish the US as the global leader in digital assets.
- Treasury Secretary Scott Bessent praised the Report, stating that it represents the “grading rubric we will use to measure our success in delivering on the President’s promise to anchor the U.S. as the world’s leader in crypto.” Contrasting the current administration’s approach to the previous administration’s “four-year siege” of the digital asset industry, he announced that “America’s digital asset frontier is open again,” inviting crypto entrepreneurs and builders to start blockchain-based companies, launch protocols, and hire employees in the US.
- SEC Chair Paul Atkins applauded the Report, stating that it reflects his long-held conviction that “a rational regulatory framework for digital assets is the best way to catalyze American innovation, protect investors from fraud, and keep our capital markets the envy of the world.” He also noted that the agencies comprising the PWG “must unleash the transformative potential of digital asset technology, safeguard our financial stability, and protect investors,” and that he “stand[s] ready to help get the job done.”
- To that end, on July 31, Chair Atkins announced “Project Crypto,” which he described as an SEC-wide initiative to modernize the securities laws to foster capital formation in the digital asset markets and “enable America’s financial markets to move on-chain.” Project Crypto will employ formal notice and comment rulemaking and other interpretive or exemptive authorities to overhaul the securities laws that govern certain digital assets and digital asset service providers. Chair Atkins has “direct[ed] the SEC’s policy divisions to work with the Crypto Task Force, led by Commissioner Peirce, to swiftly develop proposals to implement the PWG’s recommendations.”
- On August 1, the SEC also announced that its Crypto Task Force will host a series of roundtables across the country to solicit information and feedback to help shape the SEC’s crypto policymaking efforts.
- Acting CFTC Chair Caroline D. Pham welcomed the Report, stating that it “represents a unified approach under the Trump Administration to usher in a golden age of crypto.” She said that “the CFTC stands ready to fulfill our mission to promote responsible innovation, safeguard our markets and ensure they remain the envy of the world.”
- To that end, on July 31, Acting Chair Pham announced that the CFTC “will kick off a crypto sprint to start implementation of the recommendations in the [PWG Report].” She commented that the CFTC “will work closely with SEC Chairman Paul Atkins and Commissioner Hester Peirce to achieve Project Crypto.”
- Further, on August 4, Acting Chair Pham announced that the first initiative in the CFTC’s Crypto Sprint would be to solicit feedback on a plan to allow “for trading spot crypto asset contracts that are listed on a CFTC-registered futures exchange.” The proposal that supervisory authority and oversight of spot crypto assets be extended to the CFTC (without disturbing SEC jurisdiction over spot crypto securities) broadly aligns with the regime contemplated by the digital asset market structure bill under consideration in the Senate (i.e., the CLARITY Act; for more information, see the Latham US Crypto Policy Tracker).
- On the legislative front, House Committee on Financial Services Chairman French Hill stated that in the wake of the Report, the Senate must work “expeditiously” to enact crypto market structure legislation. He noted that he was “pleased to see the Working Group’s strong support of the CLARITY Act,” and will collaborate with the Senate and the administration “to make the President’s full vision a reality.”
Conclusion
These immediate efforts across federal agencies and legislative bodies reflect the administration’s unified commitment to rapidly advance a comprehensive regulatory framework to enable and support digital assets in the US. By prioritizing clarity and consistency across the agencies, and emphasizing the need to act quickly, the Report serves as a pivotal first step toward achieving President Trump’s objective of maintaining US leadership in blockchain innovation, capital formation, and regulatory standard setting.
