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Trump's report urges Congress to enhance crypto

legislation

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Regulators encouraged to create exemptions for digital

assets

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Trump courted cash from crypto industry on campaign trail

(Updates throughout with details and quotes from report, adds

hyperlinks)

By Hannah Lang

July 30 (Reuters) - A cryptocurrency working group

formed by President Donald Trump on Wednesday outlined the

administration's stances on market-defining crypto legislation

and called on the U.S. securities regulator to create new rules

specific to digital assets.

In a factsheet ahead of a landmark report, the White House

urged Congress to move forward with legislation that would

create a formal

crypto regulatory regime

, but implored lawmakers to include additional provisions in

the bill. Those include allowing trading platforms to also

custody crypto and providing a tailored disclosure regime for

issuers of crypto securities.

The White House also encouraged the U.S. Securities and

Exchange Commission and the Commodity Futures Trading Commission

to use their existing authorities to "immediately enable the

trading of digital assets at the federal level."

Shortly after taking office in January, Trump ordered the

creation of a crypto working group tasked with proposing new

regulations, making good on his campaign promise to overhaul

U.S. crypto policy.

Wednesday's report is a culmination of the task force's work so

far and its first public findings. In line with Trump's January

executive order, it will lay out several new policies from tax

provisions to capital markets rules that it says should be

enacted to advance the policy goals of the pro-crypto White

House.

The working group led by Trump official Bo Hines includes

several administration officials, including Treasury Secretary

Scott Bessent, SEC Chair Paul Atkins, and Director of the Office

of Management and Budget Russell Vought.

On the campaign trail last year, Trump courted crypto cash by

pledging to be a "crypto president" and promote the adoption of

digital assets. That is in stark contrast to former President

Joe Biden's regulators, who, in a bid to protect Americans from

fraud and money laundering, cracked down on the industry. The

Biden administration sued exchanges Coinbase, Binance,

and dozens more, alleging they were flouting U.S. laws. Trump's

SEC has since dropped those cases.

MARKET STRUCTURE, TOKENIZATION, SEC

Wednesday's report comes just two weeks after the House of

Representatives passed a bill called

the Clarity Act

that would create a broad regulatory guidelines for crypto,

and the U.S. Senate is considering its own version of the

measure.

Earlier this month, Trump signed into law a bill to create

federal rules for stablecoins, a type of cryptocurrency pegged

to the U.S. dollar. That move was hailed as a major win for the

digital asset industry, but the White House has said it wants

Congress to pass market structure legislation like the Clarity

Act next, which would have far wider repercussions for the

industry.

The report will ask lawmakers to consider several

additional measures in the final version of the bill, which

could influence ongoing discussions on Capitol Hill.

The White House said that Congress should provide the CFTC

with the authority to oversee crypto spot markets, and should

recognize the potential of decentralized finance technology,

referring to blockchain-based platforms that allow users to

transact without intermediaries.

The report will also offer several recommendations for the

SEC and the CFTC, encouraging the regulators to use safe harbors

and regulatory sandboxes to allow "innovative financial products

to reach consumers without bureaucratic delays."

That could include tokenization, which is the process of

turning financial assets - such as bank deposits, stocks, bond

funds and even real estate - into crypto assets.

Crypto firms and others have been increasingly discussing

the prospect of tokenization. Coinbase recently told Reuters it

was seeking a green light from the SEC to offer blockchain-based

stocks. The SEC has yet to weigh in publicly on that request.

The crypto sector has for years argued that existing U.S.

regulations are inappropriate for cryptocurrencies and has

called for Congress and regulators to write new ones that

clarify when a crypto token is a security, commodity, or falls

into another category, such as stablecoins.

The president's support for the crypto industry has sparked

conflict-of-interest concerns, which at times have threatened to

derail congressional crypto legislation. Trump's family has

launched cryptocurrency meme coins, and the president also holds

a stake in World Liberty Financial, a crypto platform. The White

House has denied that any conflicts of interest are present.