The Trump Administration’s January 23, 2025, Executive Order on “Strengthening American Leadership in Digital Financial Technology” [1] launched this administration’s effort to overhaul U.S. cryptocurrency policy, establishing an ambitious 180-day mandate for comprehensive regulatory reform. On July 30, 2025, the President’s Working Group on Digital Asset Markets (PWG) delivered its highly anticipated report of the same name [2] – the culmination of six months of unprecedented policy transformation that has already reshaped the American digital asset landscape. From the immediate cessation of enforcement actions to signing the first crypto bill into law, the Trump Administration and Congress have moved with remarkable speed to accomplish their goal of making America the “Crypto Capital of the world.” [3]

The PWG Report is not a starting point but rather the capstone of a rapid and deliberate policy reorientation. It provides a detailed blueprint for legislation and regulation intended to cement the administration’s goal of establishing the United States as a global leader in digital finance. In addition to providing a primer on digital assets, “Crypto 101,” and the digital asset ecosystem, the Report boasts over 160 pages of policy discussion and recommendations related to digital asset market structure; banking and digital assets; stablecoins and payments; countering illicit finance; and taxation.

The Path to the Report: A Regulatory Reset and “Crypto Week” in Congress

The groundwork for the PWG Report was laid by a dramatic departure from the previous regulatory regime, which has often been characterized as “regulation by enforcement.” President Trump promptly revoked pre-existing digital asset executive orders and policy frameworks upon taking office, and instructed a whole-of-government effort to replace regulatory ambiguity with clearer, pro-crypto frameworks. [4] This began with federal agencies, but recently extended to significant progress in Congress, as well.

The policy transformation was evident across several federal agencies. Under then-Acting Chairman Uyeda, the SEC announced its “Crypto 2.0” efforts with the formation of a new Crypto Task Force on January 21, 2025. [5] Within weeks of announcing the Crypto Task Force, approximately 89 cryptocurrency enforcement cases were either dropped or frozen, including high-profile SEC lawsuits against major exchanges Coinbase and Kraken, which were dismissed without penalty.

According to the SEC Crypto Task Force, it received over 200 written public submissions, [6] facilitated 171 public meeting requests, [7] and hosted five industry roundtables [8] to develop its recommendations and coordination with relevant regulators across the government. The policy transformation extended beyond the SEC, as well, with the OCC and FDIC unwinding restrictive guidance that had effectively prevented banks from engaging with digital assets. The coordinated approach and agency findings are reflected in the Report, as well.

It stands to reason that if the Trump Administration was able to quickly reverse Biden-era digital assets regulation and enforcement, many of President Trump’s policies and executive orders would be equally vulnerable to future changes in administration. However, Congressional leadership is aligned with the Trump Administration’s pro-crypto agenda.

The week of July 14, 2025, designated as “Crypto Week” by House leadership, led to significant legislative milestones for the digital assets and crypto industry. The centerpiece was the passage and presidential signing of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act – the first major federal cryptocurrency legislation to become law. [9] The GENIUS Act establishes a comprehensive regulatory framework for payment stablecoins, requiring 1:1 reserve backing, monthly audits, and anti-money laundering compliance while creating a dual federal-state chartering system. [10] With bipartisan support (House 308-122, Senate 68-30), the law provides regulatory clarity that enables banks, credit unions, and non-bank issuers to participate in the $238 billion stablecoin market.

In addition to the GENIUS Act becoming law, the House passed the Digital Asset Market Clarity Act (CLARITY Act) with bipartisan support (294-134). The legislation would establish clear jurisdictional boundaries between the SEC and CFTC, creating a pathway for digital assets to transition from securities to commodities based on network decentralization. Similar recommendations are included in the PWG Report. The Anti-CBDC Surveillance State Act also advanced, seeking to permanently prohibit the Federal Reserve from issuing a central bank digital currency. Senate leadership has expressed confidence in passing the remaining bills by September, with the administration’s support.

Core Recommendations of the President’s Working Group Report

Building on congressional and agency work, the PWG Report focuses on five core pillars: market structure, banking and financial services, stablecoins and payments, illicit finance, and taxation. [11]

1. Re-architecting the Digital Asset Markets Structure for Clarity [12]

The Report focuses one of the longest-running challenges for the digital assets industry: clarifying the jurisdictional maze between the SEC and CFTC. 

With the CLARITY Act already passing in the House with bipartisan support, the Report strongly recommends that the Senate also pass the CLARITY Act, which would formally grant the CFTC authority over spot markets for digital assets that are not securities. The legislation creates a pathway for digital assets that may have been initially offered as securities (i.e., as part of an investment contract) to transition into “digital commodities” regulated by the CFTC once their networks become sufficiently decentralized. The Report also urges the SEC and CFTC to use their existing rulemaking authority to provide guidance on registration, custody, and trading practices, offering a bridge to compliance while legislation is pending.

In addition to several specific recommendations on how regulators can prepare for the passage of the CLARITY Act, the Report advocates for regulatory sandboxes and safe harbors to allow firms to test new products, particularly in the Decentralized Finance (DeFi) space, under regulatory supervision.

2. Modernizing Banking and Financial Services [13]

Another central theme of the Report is the full integration of digital assets into the traditional banking system. Banks traditionally engaged with the digital assets industry through either providing core banking products and services to digital asset market participants or through facilitating customer access to digital asset markets through services such as custody, trade execution, and settlement. However, market events and regulatory uncertainty has stalled adoption. Many of the recommendations in the Report are framed as dismantling a de facto policy of discouraging banks from serving the crypto industry.

To accomplish its policy objectives, the Report calls for a “technology-neutral” regulation, a principle that is intended to ensure that banks are not penalized for serving lawful digital asset businesses. The Report recommends that federal banking regulators (the Federal Reserve, FDIC, and OCC) formally clarify and expand the scope of permissible digital asset activities for banks. For financial institutions, this is a significant development, opening the door to developing new business lines. The key areas identified for clarification include:

• Asset Custody: Providing clear rules for how banks can custody digital assets for their clients;
• Stablecoin Services: Holding reserves for regulated stablecoin issuers; and
• Asset Tokenization: Using blockchain technology to tokenize traditional financial assets.

The Report also calls for aligning bank capital requirements with actual, demonstrable risk of digital assets, a direct repudiation of more conservative models like the SEC’s Staff Accounting Bulletin 121 (SAB 121), which was revoked by the new SEC administration. These changes, the Report argues, will make it more economically viable for banks to hold digital assets on their balance sheets.

3. Integrating Dollar-Backed Stablecoins and Payments [14]

Beyond supporting stablecoin services in banks, the Report elevates U.S. dollar-backed stablecoins as a key to modernizing payments and preserving the dollar’s global status. Now that the GENIUS Act has been signed into law, the Report provides recommendations for its expeditious implementation, which establishes a robust federal framework for issuance, reserve management, and oversight by banking regulators. The regulatory framework under the GENIUS Act provides a clearer opportunity for banks and licensed trust companies to become issuers or to provide custody and reserve management services for other issuers, creating a new, regulated payment rail.

Despite supporting dollar-backed stablecoins, the Report recommends that Congress permanently prohibit the Federal Reserve from issuing a Central Bank Digital Currency (CBDC), citing risks to individual privacy, financial freedom, and the stability of the dual banking system. This outcome is likely, as the Anti-CBDC Surveillance Act already passed in the House during Crypto Week and is likely to find support in the Senate.

4. Combatting Illicit Finance [15]

The Report acknowledges the risk of illicit finance but argues that a modernized regulatory framework can mitigate risks without stifling innovation. 

The PWG calls for a review of the Bank Secrecy Act (BSA) to ensure it provides clear, tailored obligations for the full spectrum of digital actors. The Report also recommends that Congress clarify the AML/CFT obligations of actors within the DeFi ecosystem. This remains one of the most complex challenges, as it requires applying entity-based compliance rules to decentralized protocols. While the Report does not offer a definitive solution, it signals that this will be a major focus of regulatory efforts.

5. A New Paradigm for Digital Asset Taxation [16]

Finally, the Report speaks to concerns about applying tax laws to digital assets. 

The most significant tax recommendation is for Congress to enact legislation that formally treats digital assets as a new and distinct class of property for federal income tax purposes. This would subject digital assets to a modified set of rules similar to those for securities or commodities, including applying wash sale rules and mark-to-market accounting rules. The Report urges the Treasury and the IRS to immediately publish clear guidance on several complex issues, such as the tax treatment of staking rewards and cross-chain “wrapped” assets, to reduce the burden on taxpayers in the interim.

The Path Forward and Actions Already Taken

Although most of the recommendations in the Report have been in process for several months, it is a comprehensive consolidation of the Trump Administration’s policy on digital assets and actions taken to date. Given the strong alignment on digital assets policy across all federal agencies, it’s no surprise that, within 24 hours after the Report was published, SEC Chairman Paul Atkins announced “Project Crypto,” [17] an initiative that implements many of the Report’s recommendations.

For traditional financial institutions, the Report signals a clear invitation to participate in the digital asset economy within a federally regulated and supervised environment. However, the path forward requires navigating both legislative and regulatory processes. The passage of the CLARITY Act in the Senate remains a critical hurdle, and the subsequent agency rulemaking will likely be a complex, multi-year process. Financial institutions should begin preparing now, by evaluating the strategic opportunities, assessing the compliance requirements, and engaging with the policymakers as the new rules of the road are written.

[1] Executive Order, Strengthening American Leadership in Digital Financial Technology (January 23, 2025) [hereinafter, “Trump Digital Assets EO”], available at https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/.

[2] Report and Recommendation, Strengthening American Leadership in Digital Financial Technology, President Trump’s Working Group on Digital Asset Markets (July 30, 2025) [hereinafter, “PWG Report”], available at https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf; see also, Fact Sheet. The President’s Working Group on Digital Asset Markets Releases Recommendations to Strengthen American Leadership in Digital Financial Technology, White House (July 30, 2025), available at https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-the-presidents-working-group-on-digital-asset-markets-releases-recommendations-to-strengthen-american-leadership-in-digital-financial-technology/.

[3] Fact Sheet, President Donald J. Trump Signs GENIUS Act into Law, White House (July 18, 2025), available at https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/.

[4] See Trump Digital Assets EO (revoking Executive Order 14067 on “Ensuring Responsible Development of Digital Assets” and instructing the Secretary of the Treasury to revoke the Department of Treasury’s “Framework for International Engagement on Digital Assets”).

[5] Press Release, SEC Crypto 2.0: Acting Chairman Uyeda Announces Formation of New Crypto Task Force, U.S. Securities and Exchange Commission (January 21, 2025), available at https://www.sec.gov/newsroom/press-releases/2025-30.

[6] Crypto Task Force Written Input, U.S. Securities and Exchange Commission, available at https://www.sec.gov/about/crypto-task-force/crypto-task-force-written-input.

[7] Crypto Task Force Meetings, U.S. Securities and Exchange Commission, available at https://www.sec.gov/about/crypto-task-force/crypto-task-force-meetings.

[8] Crypto Task Force Roundtables, U.S. Securities and Exchange Commission, available at https://www.sec.gov/about/crypto-task-force/crypto-task-force-roundtables.

[9] Fact Sheet, President Donald J. Trump Signs GENIUS Act into Law, White House (July 18, 2025), available at https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/.

[10] Id. 

[11] See generally PWG Report.

[12] See PWG Report, pp.42-61.

[13] See PWG Report, pp.62-86.

[14] See PWG Report, pp.87-98.

[15] See PWG Report, pp.99-122.

[16] See PWG Report, pp.123-140.

[17] Speech, American Leadership in the Digital Finance Revolution, Paul S. Atkins, SEC Chairman (July 31, 2025), available at https://www.sec.gov/newsroom/speeches-statements/atkins-digital-finance-revolution-073125.