White House Unveils Crypto Policy to Clarify Regulation and Boost Bank Participation

The White House has released a much-anticipated crypto policy report outlining a comprehensive regulatory framework for digital assets in the United States. The report proposes a clear taxonomy to distinguish between cryptocurrencies classified as securities and those treated as commodities, assigning oversight to the SEC and CFTC accordingly. This aims to clarify jurisdiction and enhance collaboration between the two agencies, ensuring stronger investor protection and a more stable market structure [1]. The report emphasizes the importance of regulatory clarity in maintaining the U.S.’s leadership in financial innovation [2].

A key focus of the policy is to facilitate broader bank participation in the digital asset ecosystem. It recommends easing regulatory hurdles for banks seeking to obtain charters, enabling them to custody digital assets and offer related services to clients [3]. This would allow traditional financial institutions to serve as gateways to crypto markets, promoting wider adoption and integration.

The report also highlights the strategic role of stablecoins in maintaining the U.S. dollar’s global dominance, while rejecting the development of a central bank digital currency (CBDC). It notes that stablecoin issuers can support law enforcement by freezing or seizing assets, aiding in the fight against illicit activities [4]. However, the report does not propose a U.S. CBDC, despite the growing interest in such digital currencies globally.

In terms of taxation, the policy calls for Congress to enact a new regime tailored to digital assets, including provisions specific to staking. The report suggests adapting existing tax laws for securities and commodities to better reflect the unique nature of cryptocurrencies [5].

Alongside the policy release, a blockchain platform affiliated with Donald Trump announced a $10 million investment in Falcon Finance to enhance stablecoin infrastructure. The funding is intended to improve the interoperability and liquidity between Falcon USD (USDf) and World Liberty Financial USD (USD1), a stablecoin launched by Trump-linked World Liberty Financial (WLFI) in March [6]. Falcon Finance plans to use the investment to build infrastructure for shared liquidity, multichain compatibility, and rapid token conversions. USD1 will also serve as collateral on Falcon’s synthetic dollar platform [7].

Despite the partnership’s ambitions, both stablecoins have recently experienced volatility. Falcon’s USDf briefly depegged to $0.9783 on July 8, while USD1 fell to $0.9954 earlier this week. Critics in Washington have raised concerns about the political influence of Trump-affiliated digital assets, warning that such ties may affect the progress of crypto legislation [8].

Sources:

[1] [White House Shares Long-Awaited Crypto Policy Report](https://coinmarketcap.com/community/articles/688b31a232fd41286026cd54/)