The Trump administration released a digital asset policy report, indicating the direction for regulating the encryption industry.

In January of this year, Trump requested the establishment of a digital asset market working group and submitted a report outlining suggestions for a digital asset regulatory framework. This long-awaited report was finally released on Wednesday (July 30). This detailed 166-page digital asset policy report frequently mentions keywords such as encryption, cryptocurrency, Bitcoin, DeFi, and Ethereum.

The report outlines a broad regulatory roadmap for cryptocurrencies, presenting policy recommendations that involve multiple crypto-related areas, which can be mainly divided into five categories:

1. Positioning the United States as a leader in the digital asset market

The working group suggests that Congress further enact legislation based on the bipartisan agreement on the CLARITY Act:

• Authorize the CFTC to regulate the spot market for non-security digital assets, closing regulatory gaps.
• Embrace DeFi technology and recognize its potential to integrate into mainstream finance.

At the same time, the SEC and CFTC should leverage their existing powers:

• Launch digital asset trading at the federal level, clarifying issues such as registration and custody.
• Use tools such as safe harbors and regulatory sandboxes to promote the development of innovative financial products.

2. Modern Digital Asset Banking Regulation

The report points out that the government has terminated "Operation Choke Point 2.0" and is committed to ending regulatory measures that refuse to provide banking services to the digital asset industry. It is recommended that regulatory agencies take the following measures:

• Restart the cryptocurrency innovation work and clarify the activities that banks can undertake in custody, tokenization, and other areas.
• Improve the transparency of the process for obtaining a banking license or reserve bank master account.
• Ensure that banking capital rules are consistent with the actual risks of digital assets.

3. Strengthening the Status of the US Dollar

• The Ministry of Finance and banking institutions should faithfully and promptly implement the GENIUS Act.
• Congress should pass the "Anti-Central Bank Digital Currency Surveillance Act" to protect privacy and civil liberties.

4. Combatting Illegal Finance in the Digital Age

• The Ministry of Finance and relevant regulatory agencies should clarify the obligations and reporting of the Bank Secrecy Act (BSA).
• Congress should emphasize the importance of self-custody and clarify the anti-money laundering/anti-terrorist financing obligations of participants in the DeFi ecosystem.
• Regulatory authorities should prevent abuse of power against the lawful activities of law-abiding citizens and protect citizen privacy.

5. Ensure the fairness and predictability of digital asset taxation

• The Ministry of Finance and the National Taxation Bureau should issue guidelines on topics such as corporate alternative minimum tax and packaged transactions.
• Review the previously released guidelines on tax treatment for activities such as mining and staking.
• Congress should enact legislation to classify digital assets as a new asset class and make corresponding modifications to tax rules.

The industry generally views the report as a positive signal for Trump’s encryption agenda. Ji Kim, CEO of the Crypto Innovation Council, stated that this report marks a government-wide effort to ensure that the United States maintains its leading position in the golden age of cryptocurrency. Rebecca Rettig, legal counsel at Jito Labs, also believes that this roadmap provides guidance for achieving regulatory transparency in the U.S. crypto industry.

However, despite the report being seen as a "major victory" for the encryption industry, it did not disclose new initiatives or provide in-depth explanations of specific policy measures. Some pending questions still exist, such as the future scale of federal government cryptocurrency reserves. In addition, Congress has yet to pass the market structure bill, which imposes many restrictions on the industry.

Although this report may have "fallen short of expectations," U.S. officials stated that they have laid a solid foundation for the establishment of a regulatory framework. In the future, as more information is released and legislation progresses, the regulatory environment for the encryption industry is expected to become clearer.