The report proposes defining digital assets as either securities or commodities, assigning oversight to the SEC and CFTC accordingly. It also supports expanded bank participation in crypto markets. Additionally, it mentions the strategic role of stablecoins when it comes to preserving the US dollar’s dominance and rejects the need for a central bank digital currency. The report also calls for tax reforms specific to digital assets like staking. In parallel, a Trump-affiliated blockchain firm invested $10 million in Falcon Finance to develop stablecoin infrastructure.
Trump Working Group Drops Crypto Framework
The long-anticipated crypto policy report from President Donald Trump’s Working Group on Digital Assets was finally released, and it offers a sweeping vision for the regulation of digital assets in the United States. The report lays out a comprehensive framework that aims to clarify the regulatory environment for cryptocurrencies, encourage innovation, and strengthen the position of the US in the global digital economy.
Front page of the crypto policy report
One of the key priorities of the report is the establishment of a clear "taxonomy" of digital assets. The working group calls for a straightforward definition distinguishing which cryptocurrencies should be classified as securities and which should be treated as commodities.
Advisors in Trump’s Working Group on Digital Assets (Source: Associated Press)
This distinction will help establish jurisdictional clarity between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). According to the recommendations, the CFTC should take primary oversight of spot crypto markets and commodity tokens, while the SEC will continue to regulate securities tokens. The report argues that collaboration between the two agencies will ensure better investor protection and a more stable market structure.
In a statement responding to the report, SEC Chair Paul Atkins placed a lot of emphasis on the importance of regulation when it comes to maintaining the US’s leadership role in financial innovation. He believes that a rational regulatory framework is critical for protecting investors and maintaining the strength of US capital markets.
Statement from Paul Atkins
Banking reform is another major focus of the report, which advocates for allowing banks to more easily participate in the digital asset ecosystem. The working group recommends easing the path for banks to obtain charters and calls for better transparency in regulatory requirements. This will allow banks to safely custody digital assets and offer services to clients, and will open up access to crypto markets through traditional financial institutions.
The report also shed some light on the strategic importance of stablecoins in preserving the dominance of the US dollar in the global economy. While it opposes the creation of a central bank digital currency (CBDC), the working group points to the overlapping functionalities of stablecoins and CBDCs. The report acknowledges that stablecoin issuers have the capacity to cooperate with law enforcement by freezing or seizing assets, which could help combat illicit activities.
Finally, the report addresses the need for tailored taxation policies for digital assets. It calls on Congress to establish a new tax regime that reflects the unique characteristics of cryptocurrencies, including provisions specific to staking. The proposed framework will adapt existing securities and commodities tax laws to better suit the nuances of digital assets for federal income tax purposes.
Altogether, the report essentially provides a blueprint for integrating digital assets into the US regulatory and financial system, while still protecting national interests and promoting technological innovation.
Trump-Linked Firm Invests $10M in Falcon Finance
In other Trump-related crypto news, a blockchain platform affiliated with the US President made a $10 million investment in Falcon Finance to boost the development of stablecoin infrastructure. The two companies confirmed the news on Wednesday.
Press release
The move is intended to boost the liquidity and interoperability between Falcon USD (USDf) and World Liberty Financial USD (USD1), which is a stablecoin that was launched in March by Trump-linked World Liberty Financial (WLFI). Falcon Finance plans to use the funds to build infrastructure for shared liquidity, multichain compatibility, and fast conversions between the two tokens. USD1 will also be accepted as collateral on Falcon’s synthetic dollar platform.
The partnership builds on an earlier milestone in which USD1 was used to settle a $2 billion investment from MGX into Binance. Zak Folkman, co-founder of WLFI, stated that the goal of the collaboration is to offer a more reliable and adaptable digital dollar infrastructure for both retail and institutional users. Falcon Finance is known for its overcollateralized model, and will incorporate USD1's reserve-backed design to provide additional support for its synthetic stablecoin system.
Despite the ambitious vision, both stablecoins recently faced some price instability. Falcon’s USDf briefly depegged to $0.9783 on July 8 before recovering by July 14, while USD1 fell to $0.9954 earlier this week and still has to fully regain its peg as of press time.
USD1’s price action over the past 7 days (Source: CoinMarketCap)
Meanwhile, the growing role of Trump-affiliated digital assets is raising eyebrows in Washington. Critics warn that the political ties to these ventures could influence or hinder the progress of emerging crypto legislation. A recent Bloomberg report even estimated that crypto-linked initiatives contributed at least $620 million to Trump’s personal fortune, which is now valued at over $6 billion.
