08.04.2025|Alex Grieve
The Presidential Working Group on Digital Assets 180-Day Report (“the report”), released last week, is a landmark roadmap for the future of digital assets. Commissioned by President Trump’s January 23, 2025 Executive Order on Strengthening American Leadership in Digital Financial Technology, the report outlines bold, detailed steps to establish the United States as the global leader in crypto innovation.
The report doesn’t just lay out ideas; it aligns stakeholders in the legislative and executive branches in pursuit of establishing regulatory clarity for crypto as quickly as possible. Though agencies and legislators aren’t legally bound to act on its suggestions, there’s reason to believe they will: Treasury Secretary Scott Bessent and his team, bank regulators at the OCC, Federal Reserve Board, and FDIC, and the leadership of the SEC and CFTC all contributed substantial input to this manifesto. Additionally, the White House has remained in close contact with Congress as it has passed crypto legislation, and the President’s involvement has already proven to have significant influence in getting bills like the GENIUS Act over the finish line.
If the reports’ recommendations take hold, the U.S. stands to cement its position as both a financial technology trailblazer and a responsible regulator. By setting out a clear vision for what American crypto leadership looks like all in one document, disparate actors across the government now have a shared directive upon which to execute.
Policymakers have their blueprint for accelerating growth and unlocking crypto’s full potential. The next move is theirs.
The report frames decentralized finance (DeFi) as fundamentally different from traditional, centralized finance, pointing to several key factors. Decentralized protocols, per the report, primarily provide services like lending and trading on a peer-to-peer basis, rather than through a central intermediary which has control and custody over customer assets, and total control over platform upgrades and use. Regulatory compliance therefore must be such that DeFi developers are not subject to the same requirements as are the operators of centralized platforms.
This distinction is anything but technical: it bucks a trend in the federal government over the past several years of forcing DeFi into a traditional finance-shaped box. This trend has resulted in the misguided prosecutions of developers and baseless enforcement actions against growing ecosystems. Its reversal in the White House report is momentous.
Why it matters: A one-size-fits-all model doesn’t work for DeFi. Recognizing DeFi’s unique attributes preserves innovation, ensures regulatory effectiveness, and supports the ongoing growth and security of decentralized financial infrastructure.
What comes next: Regulators have the option to provide no action relief for DeFi at any time. Legislators can and should also amend legislation or introduce new legislation to include protections for DeFi users.
The current Bank Secrecy Act (BSA) framework was built for centralized institutions and falls short when applied to decentralized platforms with little or no control over user funds. For example, prosecutors have twisted the law to prosecute developers of neutral tools. The report, in contrast, calls on Congress to codify principles regarding how control over an asset impacts BSA obligations. Specifically, the states that a software provider that does not maintain total independent control over value should not be considered as engaged in money transmission for purposes of the BSA.
Why it matters: Aligning BSA rules with the realities of decentralized technology reduces compliance uncertainty and prevents unnecessary burdens upon developers.
What comes next: Regulators should issue rulemaking that gives the crypto industry a clear path to comply with the Bank Secrecy Act without disrupting innovation, such as reiterating or updating the 2019 FinCEN guidance. Congress could also codify changes to the BSA’s Section 18 USC 1960 as part of the National Defense Authorization Act (NDAA), crypto market structure legislation, or other legislation.
A detailed taxonomy outlined in the document classifies digital assets into categories such as security tokens, tokenized securities, and digital commodities. This long-awaited clarity sets the stage for applying regulations consistently across different asset types. Under the last administration, Chairman Gary Gensler would frequently invent, mix, and match terms in different enforcement actions — even ones filed within days of each other. That era is now over.
Why it matters: Clearly defined terminology for digital assets eliminates regulatory confusion, streamlines compliance, and reduces legal risks. This clarity also bolsters market confidence, drives capital into American companies, and fosters the development of new financial products.
What comes next: Several pieces of market structure legislation introduced over the past several years have included definitions for key terms, though none align fully with the definitions laid out in the White House report. Both chambers of Congress will now ideally work to refine key terms to align with this report before any final market structure bill makes it to the President’s desk.
Another series of recommendations seek to assign explicit authority over non-security digital asset markets to the Commodity Futures Trading Commission (CFTC) while narrowing the Securities and Exchange Commission’s (SEC) jurisdiction to digital securities. This clearly distinguishes each agency’s role and streamlines collaboration between them. SEC Chair Paul Atkins underscored this commitment to clarifying digital asset jurisidxtion in his speech announcing “Project Crypto” on July 31st, in which he plainly stated that “most crypto assets are not securities.”
Why it matters: Clear boundaries between regulatory agencies reduce inefficiencies and regulatory arbitrage. Businesses benefit from simpler compliance and lower costs, founders can know where they stand without hiring an army of lawyers, and investors gain the certainty needed to participate confidently in the market.
What comes next: Ultimately, defining the boundary between the CFTC and SEC is the core of any market structure legislation, whether that be the CLARITY Act or a new Senate bill. That means this decision is in the hands of Congress, which must determine whether to follow the White House’s recommendation.
The report proposes detailed crypto-specific tax guidance, explicitly outlining which issues require legislation versus which can be alleviated by the IRS and Treasury. Some of the specific recommendations include:
Why it matters: Resolving long-standing ambiguities in crypto taxation simplifies compliance and reduces uncertainty for institutions and individual investors alike. Clear rules make markets more efficient and encourage broad-based adoption of digital assets.
What comes next: Congress may consider a tax bill later this year or fold some of the recommended changes into a new budget reconciliation package. Many proposals, however, like guidance on staking and NFT classification, can be addressed by the IRS under its existing authority. The report outlines which issues it believes the IRS can quickly resolve on its own, and which require congressional action.
The administration explicitly calls for supporting innovation in banking technologies in the report, enabling banks to safely engage with digital assets. This marks a shift away from overly restrictive measures that previously limited banks' ability to interact with crypto markets, proposing clear standards that maintain safety and soundness while eliminating unreasonable barriers for banks to service crypto companies and manage digital assets.
Why it matters: Enabling banks to innovate and actively participate in the digital asset space increases market access and financial inclusion. Meanwhile, the emphasis on safety and soundness ensures that innovation does not compromise the stability of the broader financial system. Operation Choke Point 2.0 is well and truly over.
What comes next: Regardless of a shift in approach between the Biden and Trump administrations, the White House report’s recommendations must be codified in law or at the very least explicitly stated in guidance from bank regulators like the OCC, Federal Reserve Board, and the FDIC. These regulators have already begun to take steps in the right direction — the Federal Reserve Board withdrew supervisory guidance which required banks to seek pre-approval or non-objection letters in May, for example, following similar reversals from the FDIC and OCC. However, there is still more to be done.
Rules are often seen as the enemy of innovation. They’re framed as restrictions on what builders can’t do, rather than guidance on what they can.
But in crypto, the reality is the opposite. This is an industry so dynamic and transformative that it outgrew existing rules on day one, and has been penalized for that ever since. For crypto, new rules made to accommodate its innovations don’t stifle progress, but help forge a path forward.
The 180-day report marks a turning point because it lays out that path, not just for the coming months, but potentially for years ahead. It’s a comprehensive roadmap spanning Congress, financial and banking regulators, the IRS, the DOJ, and more. On critical questions, such as dividing oversight between the SEC and CFTC, the report removes ambiguity and signals where the White House stands. On other issues, like tax reform, it goes even further, offering not just policy positions but clear, procedural steps for implementation.
The White House’s position on these various policy issues is explained in detail, leaving little room for confusion amongst the relevant stakeholders. It is now on lawmakers and regulators to put the White House’s plans into action.
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