U.S. Unveils Crypto Regulatory Framework to Clarify Oversight and Safeguard Dollar Dominance

The U.S. government has unveiled a comprehensive regulatory framework for digital assets, aiming to clarify jurisdictional boundaries, promote innovation, and preserve the dominance of the U.S. dollar. The Trump Working Group on Digital Assets released its long-awaited policy report, which outlines a detailed approach to classifying and regulating cryptocurrencies. The framework proposes a clear taxonomy distinguishing between securities and commodities, assigning oversight to the SEC and CFTC accordingly. This distinction is intended to provide regulatory clarity and reduce ambiguity in enforcement, according to the report [1].

The report also emphasizes the importance of stablecoins in maintaining the U.S. dollar’s global influence and explicitly opposes the development of a central bank digital currency (CBDC). It highlights the potential for stablecoin issuers to collaborate with law enforcement, such as freezing assets for investigations. Additionally, the document supports expanding the role of traditional banks in the crypto ecosystem by easing regulatory hurdles and improving transparency, which could allow financial institutions to offer custodial services and broader access to digital assets [1].

Tax reform is another key component of the report, with recommendations for a tailored tax regime that addresses the unique features of digital assets, including staking. The working group argues that adapting existing securities and commodities tax laws will better suit the nuances of digital assets, ensuring compliance while supporting innovation [1].

In a related development, a blockchain platform affiliated with President Trump invested $10 million in Falcon Finance to advance stablecoin infrastructure. The funding aims to enhance the interoperability and liquidity of Falcon USD (USDf) and World Liberty Financial USD (USD1), a stablecoin launched earlier this year by a Trump-linked firm. Falcon Finance plans to use the investment to develop shared liquidity infrastructure, multichain compatibility, and faster conversions between the two tokens. USD1 will also serve as collateral on Falcon’s synthetic dollar platform [1].

The partnership builds on recent milestones, including the use of USD1 to facilitate a $2 billion investment from MGX into Binance. However, both stablecoins have faced recent volatility, with USDf briefly depegging to $0.9783 in early July and USD1 trading as low as $0.9954. While both tokens have since partially recovered, their price stability remains under scrutiny [1].

Critics have raised concerns about the political influence of Trump-affiliated crypto ventures, warning that these ties could impact the development of future crypto legislation. A recent Bloomberg report estimated that crypto-linked initiatives contributed at least $620 million to Trump’s personal wealth, bringing his total estimated fortune to over $6 billion [1].

The release of the policy report and the associated investment highlight the growing integration of digital assets into mainstream financial systems, while also underscoring the regulatory and economic challenges that remain. As the U.S. seeks to maintain its leadership in financial innovation, the proposed framework signals a strategic effort to balance oversight with opportunity.

Source: [1] White House Shares Long-Awaited Crypto Policy Report (https://coinpaper.com/10270/white-house-shares-long-awaited-crypto-policy-report)