The US President Donald Trump’s Working Group on Digital Assets released its long-promised crypto report outlining policy recommendations for regulating crypto in the United States, including crypto market structure, jurisdictional oversight, banking regulations, promoting US dollar hegemony through stablecoins and taxation of cryptocurrencies.
Establishing a “taxonomy” of digital assets by clearly defining which cryptocurrencies are securities and which are commodities was the first issue outlined in the report, released on Wednesday.
According to recommendations in the document, jurisdictional oversight over digital assets should be shared between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), with the CFTC having oversight over spot crypto markets.
The working group recommended that the SEC and CFTC collaborate on crypto oversight. Commodity tokens should be governed by the CFTC, while other tokens deemed to be securities will be subject to SEC oversight. The authors of the report said a clearly defined crypto market structure would make the US a global leader in digital assets.
“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,” SEC Chair Paul Atkins wrote in response to the report.
Related: Trump’s crypto working group pushes for clearer rules as adoption grows
Banking regulations should be eased, clearly defined
Allowing banks the ability to custody crypto and provide digital asset services to customers was a key policy proposal outlined by the working group.
The group recommended that banking regulators streamline the process to acquire a bank charter and make the requirements more transparent.
Stablecoins and payments were also outlined in the report, touching on the need to embrace stablecoins to protect the US dollar’s hegemony.
As expected, the authors urged Congress to pass the CBDC Anti-Surveillance State Act and prohibit the research and development of a central bank digital currency in the US.
However, the report highlighted many of the features that make stablecoins indistinguishable from CBDCs.
“A unique feature of stablecoins is that stablecoin issuers can coordinate with law enforcement to freeze and seize assets to counter illicit use,” the authors wrote.
Establishing clear regulations around taxation
Finally, the report recommended that Congress establish a custom-tailored tax policy for cryptocurrencies that accounts for the unique features of the asset class, including staking.
“Legislation should be enacted 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,” the report said.
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