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Crypto report to outline administration's views on

tokenization

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Report will lay out regulatory, legislative proposals

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Trump courted cash from crypto industry on the campaign

trail

By Hannah Lang

July 30 (Reuters) - A cryptocurrency working group

formed by President Donald Trump is set to release a report on

Wednesday that is expected to outline the administration's

stances on tokenization and market-defining crypto legislation,

among other issues critically important to the digital asset

industry.

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 what rules and laws

should be enacted to advance the policy goals of the pro-crypto

White House.

Those include making sure that the Securities and Exchange

Commission has a framework in place for firms to offer

blockchain-based stocks and bonds, according to one person

familiar with the discussions. The report is also expected to

discuss the administration's wish list for legislation Congress

is currently debating to create broad regulatory guidelines for

cryptocurrency, according to a second person familiar with the

report.

The working group led by Trump official Bo Hines is composed

of several administration officials including Treasury Secretary

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

of Management and Budget Russell Vought.

The White House, Treasury Department and the SEC did not

immediately respond to requests for comment on the report.

"While there have been regulatory regimes in place that have

maybe been piecemeal or have allowed the industry to grow in

certain ways, the recommendations that we expect to see in the

report will be a good roadmap for how to build out crypto as a

continued important part of the economy going forward," said

Rebecca Rettig, chief legal officer at crypto firm Jito Labs.

On the campaign trail, 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 which, 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.

TOKENIZATION, STABLECOINS, MARKET STRUCTURE

Industry participants will be looking closely at what the report

says about tokenization, the process of turning financial assets

- such as bank deposits, stocks, bonds, funds and even real

estate - into crypto assets.

Crypto firms and others have been increasingly discussing the

prospect of tokenizing securities as a new way to facilitate

trading. Coinbase recently told Reuters it was seeking a U.S.

green light from the SEC to offer blockchain-based stocks. The

SEC has yet to weigh in publicly on that request.

Wednesday's report is expected to recognize the need for the

SEC to develop a framework for tokenization, according to a

source familiar with the discussions, but the details of the

language were not immediately clear.

The report will also lay out what the White House would like

to see from market structure legislation working its way through

Congress, according to a separate person with knowledge of the

report. The House of Representatives passed a bill called the

Clarity Act earlier this month that would create a formal

regulatory regime 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, and the White House has said it wants

Congress to pass market structure legislation next, which would

have far wider repercussions for the industry.

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, like 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.