Trump administration unveils first crypto regulation framework

The cryptocurrency sector has operated without clear regulations for years. Recently, President Donald Trump formed a working group focused on digital assets, which has now released its first report. This marks a significant shift, as the current administration is proposing specific regulatory guidelines for cryptocurrencies, rather than applying traditional financial rules.

Formation of the working group

In January, President Donald Trump signed an executive order establishing a task force dedicated to cryptocurrency. The group is led by Bo Hines and includes Treasury Secretary Scott Bessent, SEC Chair Paul Atkins, and Russell Vought from the Office of Management and Budget. Their objective is to develop a regulatory framework tailored to the cryptocurrency industry.

First public report

The working group released its first report via a White House fact sheet. It outlines proposed regulatory measures for the crypto industry, including:

• Support for new legislation specific to digital assets
• Allowing exchanges to provide custody services
• Creating tailored disclosure rules for token issuers
• Enabling federal-level trading authorisation through the SEC and CFTC

The White House has called for clearer regulations for digital assets and urged the Securities and Exchange Commission (SEC) to develop rules specifically for cryptocurrencies, rather than applying traditional securities classifications. Congress has also been encouraged to pass legislation allowing platforms to both trade and hold digital assets, potentially streamlining operations for users and exchanges.

Clarity Act and related proposals

The Clarity Act recently passed the House and is now under review in the Senate. The working group has recommended several additions to the final version, including:

• Formal recognition of decentralised finance (DeFi) platforms
• Granting the Commodity Futures Trading Commission (CFTC) authority over spot markets
• Adjusting disclosure requirements for crypto projects

Currently, trading and storing digital assets often require separate platforms. The group has proposed allowing exchanges to also serve as custodians. This would simplify the process for users but would also increase regulatory responsibilities for those platforms.

Federal oversight of digital asset trading

The group has recommended that digital asset trading be authorised at the federal level. This would involve the SEC and CFTC using their existing authority to create a unified regulatory framework, replacing the current patchwork of state-level rules. A new law has also been signed to establish federal regulations for stablecoins—digital assets pegged to the US dollar. This represents the first formal legal framework for stablecoins under the current administration.

The report includes proposals to simplify the tax treatment of cryptocurrency gains and losses. It also suggests making it easier to issue and trade tokenised assets, such as blockchain-based stocks and bonds. The report acknowledges the role of DeFi in expanding access to financial services and highlights the need for regulatory mechanisms to ensure user protection, even in decentralised systems.

Comparison of policy approaches

The report contrasts the current administration’s approach with that of the previous one, noting a shift from enforcement-based actions to a more regulatory and policy-driven framework. This includes the dismissal of certain legal cases and a change in public messaging.

It also positions the US regulatory approach in the context of international developments. Regions such as Europe and Asia have already implemented or are advancing their cryptocurrency regulations. The report suggests that the US aims to re-establish its leadership in global cryptocurrency policy.

The Senate will continue reviewing the Clarity Act, and additional legislation related to tokenisation and taxation is expected. The working group will remain active in shaping crypto policy through 2025, with the goal of establishing a comprehensive regulatory framework by year-end.