The United States President Donald Trump’s Working Group on Digital Assets unveiled its long-anticipated crypto report detailing policy suggestions for regulating cryptocurrency in the US, encompassing crypto market structure, jurisdictional governance, banking regulations, bolstering US dollar supremacy through stablecoins, and taxation of digital currencies.
Creating a “taxonomy” of digital assets by distinctly identifying which cryptocurrencies are classified as securities and which as commodities was the initial matter addressed in the report, unveiled on Wednesday.
Per the suggestions in the document, jurisdictional governance over digital assets should be a shared responsibility between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), with the CFTC maintaining oversight of spot crypto markets.
The working group proposed that the SEC and CFTC work together on crypto governance. Commodity tokens should fall under the jurisdiction of the CFTC, whereas other tokens identified as securities will fall within the SEC’s domain. The contributors to the report indicated that a well-defined crypto market structure would position the US as a global frontrunner in digital assets.
“An effective regulatory framework for digital assets is essential to stimulate American innovation, safeguard investors against fraud, and maintain our capital markets as a global benchmark,” SEC Chair Paul Atkins stated in reaction to the report.
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Banking regulations should be relaxed and clearly delineated
Allowing financial institutions to hold crypto and offer digital asset services to clients was a significant policy suggestion put forth by the working group.
They recommended that banking regulators simplify the process to secure a bank charter and enhance clarity regarding the requirements.
Stablecoins and transactions were also discussed in the report, addressing the necessity to adopt stablecoins to safeguard the US dollar’s dominance.
As anticipated, the authors urged Congress to enact the CBDC Anti-Surveillance State Act and ban the research and development of a central bank digital currency in the US.
Nevertheless, the report underlined several characteristics that render stablecoins similar to CBDCs.
“A distinctive aspect of stablecoins is that their issuers can collaborate with law enforcement agencies to freeze and seize assets to combat unlawful usage,” the authors noted.
Establishing explicit regulations regarding taxation
Ultimately, the report suggested that Congress create a customized tax framework for cryptocurrencies that considers the unique aspects of this asset class, including staking.
“Legislation should be developed that regards digital assets as a new category of assets, subject to modified versions of tax regulations applicable to securities or commodities for federal income tax purposes,” the report asserted.
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