U.S. Crypto Report Proposes Dual Regulatory Framework for Digital Assets

The U.S. crypto regulation report, issued by the President’s Working Group on Digital Assets, outlines a structured approach to overseeing digital assets while balancing innovation and investor protection [1]. The report emphasizes a dual regulatory framework where the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) share oversight responsibilities. Specifically, the SEC will govern securities tokens, while the CFTC will handle commodity tokens and oversee spot markets [1]. This division seeks to clarify roles, reduce regulatory ambiguity, and establish a robust market foundation.

Banking reforms are also central to the report’s recommendations. It proposes easing restrictions to allow traditional banks to custody and offer services for cryptocurrencies. By streamlining the process for acquiring bank charters and increasing transparency in requirements, the report aims to integrate digital assets more seamlessly into the traditional financial system [1]. These changes are expected to boost institutional adoption and foster competition in the emerging crypto banking sector.

Tax policies receive significant attention, with the report urging Congress to treat digital assets as a unique asset class with tailored tax rules. This would address crypto-specific features such as staking and bring clarity to how gains, losses, and rewards are taxed. The goal is to ensure fairness and simplify compliance for investors and businesses [1].

Stablecoins are highlighted as a critical component of the digital asset landscape due to their role in maintaining the dominance of the U.S. dollar in digital payments. The report underscores how stablecoin platforms can collaborate with law enforcement to freeze illicit assets, drawing parallels with central bank digital currencies (CBDCs). However, while the report advocates for stablecoin development, it also notes that Congress has been urged to avoid pursuing CBDCs [1].

The report highlights the importance of a clear market structure in positioning the U.S. as a global leader in digital assets. By clearly defining which tokens fall under securities or commodities and assigning appropriate regulatory oversight, the U.S. can reduce uncertainty and attract innovation [1]. The proposed regulatory clarity is expected to deter fraudulent practices and market manipulation while encouraging responsible growth in the crypto sector.

Banking regulation changes are anticipated to significantly influence the adoption of cryptocurrencies. By allowing trusted financial institutions to custody and manage digital assets, the report aims to build confidence among traditional investors and institutional players [1]. Lowering barriers to entry through streamlined chartering processes will also encourage new players to enter the market, fostering competition and innovation in the crypto banking sector.

The report’s recommendations reflect a balanced approach to regulating digital assets without stifling innovation. By assigning clear regulatory responsibilities, streamlining banking access, and providing tax clarity, the U.S. aims to create a competitive and investor-protected environment [1]. These measures are intended to solidify the U.S.’s leadership in the global digital asset space and ensure long-term stability and growth.

Source: [1] US Crypto Report Suggests Possible Regulatory Framework for Bitcoin Oversight and Stablecoin Policies [https://en.coinotag.com/us-crypto-report-suggests-possible-regulatory-framework-for-bitcoin-oversight-and-stablecoin-policies/]