Report Released by Presidential Working Group Expresses Optimism Regarding Digital Asset Markets

At a Glance

• The report urges Congress and regulators to provide clear authority for the SEC and CFTC over digital asset markets, implement a registration regime for market participants, and adopt technology-neutral, fit-for-purpose frameworks that promote responsible growth and onshoring of digital asset infrastructure in the U.S.
• Strong support is expressed for U.S. dollar-backed stablecoins (with rapid implementation of the GENIUS Act) while explicitly opposing a U.S. Central Bank Digital Currency (CBDC); additional recommendations include modernized AML/CFT frameworks, open banking access, targeted tax clarity and NIST-led technical standards for security and post-quantum cryptography readiness.

On July 30, the president’s Working Group on Digital Asset Markets released a report titled “Strengthening American Leadership in Digital Financial Technology,” which provides a comprehensive roadmap to promote responsible growth in U.S. digital assets and blockchain technology. 

Congress and regulatory agencies are urged to create legislation, policies and rules that promote regulatory clarity with respect to digital assets to encourage digital asset infrastructure to move to the United States. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are called upon to promote the trading of digital assets, and Congress is encouraged to enact legislation that clearly grants these agencies the authority to regulate digital asset markets. Furthermore, the report calls for the implementation of a registration regime for market participants, under either the SEC or the CFTC.

The report proposes a multi-pillar approach which would include: 

1. A technology-neutral, fit-for-purpose federal market structure 
2. Strong support for U.S. dollar-backed stablecoins, including faithful, expeditious implementation of the new GENIUS Act, and an explicit prohibition on Central Bank Digital Currencies (CBDCs) 
3. Open banking access and risk-based supervision 
4. Modernized AML/CFT and sanctions frameworks that protect lawful self-custody and privacy 
5. Targeted tax clarity
6. National Institute for Standards and Technology (NIST)-led technical standards, including post-quantum cryptography (PQC) readiness.

Report Elements

Market Structure

The report urges the SEC and CFTC to use existing authority to immediately enable federal-level trading of digital assets, adopt fit-for-purpose, technology-neutral frameworks, and consider time-limited safe harbors and exemptions (e.g., for digital asset securities, certain airdrops, and decentralization trajectories). It also calls for modernizations to alternative trading systems (ATS), national market systems (NMS) and transfer-agent rules, and contemplates a conditional “innovation exemption” and carefully managed vertical integration subject to safeguards. Congress is encouraged to grant the CFTC clear authority over spot markets in non-security digital assets, direct coordinated SEC/CFTC standards (e.g., portfolio margining) and preempt inconsistent state regimes for SEC/CFTC-registered intermediaries.

Stablecoins & CBDC 

The report supports U.S. dollar-backed payment stablecoins and calls for faithful, rapid implementation of the GENIUS Act (licensing, reserves, redemption, disclosures) to advance dollar competitiveness domestically and globally, including cross-border payments. By contrast, it explicitly opposes a U.S. CBDC and urges the U.S. to discourage CBDC adoption abroad due to privacy, financial stability and sovereignty risks.

Banking Access 

The report details agency actions reversing prior constraints on bank engagement with digital assets (e.g., rescission of SAB 121; OCC Interpretive Letters 1183/1184; FRB/FDIC/OCC updates); clarifies permissibility for custody, stablecoin-related activities and distributed ledger technology (DLT)-based payments; and encourages technology-neutral, risk-based oversight (including capital and liquidity calibration aligned to actual asset/activity risk) and more transparency for Reserve Bank master-account access.

DeFi 

The report proposes objective factors — control over assets, ability to modify code, degree of centralization/management and practical ability to comply — as the basis for tailored obligations, coupled with sandbox and safe-harbor approaches.

AML/CFT Modernization 

It recommends tailoring Bank Secrecy Act (BSA) obligations for digital asset actors (including certain foreign actors whose conduct affects the U.S.), withdrawing or updating older proposals (e.g., the 2020 “unhosted wallet” or “noncustodial wallet”), enabling lawful information sharing (e.g., IVAN, 314(a)/(b)), encouraging privacy-preserving digital identity tools, and ensuring OFAC/DOJ focus on illicit actors — not lawful self-custody and peer-to-peer activity.

Tax Clarity 

The report calls for targeted guidance and, where needed, legislation addressing: cooperative alternative minimum tax (CAMT) treatment of unrealized gains; timing of income from staking/mining; extending wash-sale/constructive-sale rules to actively traded fungible digital assets; §1058 treatment for digital-asset lending; stablecoin tax characterization; Crypto-Asset Reporting Framework (CARF) implementation; and harmonization of §6038D with Report of Foreign Bank and Financial Accounts (FBAR).

Standards & Security 

It tasks NIST to lead pre-standardization work and international engagement on wallet security, bridges/interoperability, incident response and crypto-agility/PQC migration.

Tone 

The report is deliberately pro-innovation: it affirms lawful self-custody and peer-to-peer transactions, emphasizes technology-neutral rules over “regulation by enforcement,” and seeks to onshore activity, jobs and innovation while maintaining robust consumer protection, financial integrity and national security controls.

For More Information

Please reach out to the authors of this client alert if you have any questions. Read the full report.