On January 23, 2025, President Donald Trump issued Executive Order 14178 titled "Strengthening American Leadership in Digital Financial Technology". In it, he recognized the digital asset industry as a cornerstone of innovation, economic growth, and U.S. international leadership, and declared that a policy of his administration will be to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.
On July 30, 2025, the Trump administration's Working Group on Digital Asset Markets published its long-awaited report on digital assets (the report), setting out a comprehensive blueprint for the future of digital assets in the U.S. The report lays out a vision for how the U.S. can become the global leader in digital financial technology, and how crypto and blockchain can become hallmarks of a new American Golden Age. For businesses, investors and financial institutions — both in the U.S. and abroad — this report signals a significant shift in regulatory approach, market opportunity, and the competitive landscape for digital assets.
Policy vision and objectives
The report reiterates President Trump's stated promise to make the U.S. the "crypto capital of the world." The report is built on several key objectives
- Fostering innovation: encouraging the development and adoption of digital assets and blockchain technology across the economy, recognizing their potential to revolutionize not just finance, but ownership, governance, and economic infrastructure more broadly
- Regulatory clarity and certainty: moving away from "regulation by enforcement" towards technology-neutral rules that provide certainty for innovators, investors, and institutions
- Preserving dollar sovereignty: reinforcing the U.S. dollar's global dominance through the promotion of well-regulated, U.S. dollar-backed stablecoins, and making clear the Trump administration's opposition to a central bank digital currency (CBDC)
- Ensuring fair access and risk mitigation: guaranteeing open access to banking and financial services for lawful digital asset businesses, protecting privacy, and countering illicit finance, all while supporting responsible growth
Core recommendations
The report's recommendations are wide-ranging, spanning market structure, banking, stablecoins, illicit finance, taxation, cybersecurity, and international leadership. Below, we outline the key recommendations.
1. Digital asset market structure
The report calls for a comprehensive overhaul of the U.S. digital asset regulatory framework, with a focus on:
- Clear asset classification: Establishing a taxonomy that distinguishes between digital assets that are securities (regulated by the Securities and Exchange Commission) and those that are not (regulated by the Commodity Futures Trading Commission), representing a departure from the previous administration's policies that broadly characterized digital assets as securities.
- Regulatory coordination and flexibility: Granting the SEC and CFTC the ability to clarify requirements via both formal rulemaking and informal guidance, such as tailored exemptions and temporary safe harbours for emerging models like DeFi and airdrop distributions. The report recommends a "fit-for-purpose" exemption for digital asset securities, a time-limited safe harbour for projects working towards decentralization, and relief for certain airdrops.
- Federal pre-emption: Recommending that federal law pre-empts state-level regulation for SEC- and CFTC-registered intermediaries, reducing fragmentation and compliance costs.
The report criticizes the legal uncertainty and regulatory fragmentation in the digital assets regulatory framework. By clarifying jurisdictional boundaries and providing tailored, principles-based rules, the administration aims to ensure that U.S. digital asset markets become the deepest and most liquid globally, attracting both domestic and international capital.
2. Banking and digital assets
The report recognizes the essential role of banks and credit unions in supporting the digital asset ecosystem, and addresses the regulatory uncertainty that has hindered their participation
- Technology-neutral, risk-based regulation: banks ought to be permitted to participate in digital asset activities like custody, payments and lending without unnecessary regulatory obstacles, as long as they implement sound risk management
- Clarity on permissible activities: agencies are urged to issue detailed guidance on key activities, including digital asset custody, use of third-party service providers, holding stablecoin reserves, and conducting principal activities, such as market-making and lending
- Transparent chartering and account access: regulatory bodies are encouraged to establish clear and transparent procedures, including defined timelines for banks seeking charters, deposit insurance, or access to Federal Reserve accounts, with a presumption of approval if deadlines are not met, except in exceptional cases
- Modernized capital standards: U.S. capital requirements should accurately reflect the risks and opportunities of digital asset activities, and the U.S. should advocate for international standards that do not unfairly penalize U.S. banks
The report is critical of past regulatory approaches — such as "Operation Choke Point 2.0" — that discouraged banks from serving digital asset firms, leading to "debanking" and pushing activity to less regulated jurisdictions. The Trump administration's approach seeks to ensure fair access, encourage innovation, and maintain robust risk management and consumer protection.
3. Stablecoins and payment innovation
Stablecoins are identified as a cornerstone of payment innovation and a tool for maintaining U.S. dollar dominance, a key objective of the report
- Implementing the GENIUS Act: the report calls for the full implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, which we discuss in more detail here, which sets comprehensive standards for stablecoin issuance, reserves, disclosures and licensing
- Onshore innovation and reciprocity: requiring stablecoin issuers to be U.S.-licensed or to meet comparable foreign standards and encouraging cross-border flows through regulatory reciprocity
- Clarifying regulatory status: payment stablecoins issued by U.S.-licensed entities should be explicitly defined as neither securities nor commodities, to remove regulatory ambiguity and support adoption
Notably, the report is explicit in its opposition to a U.S. CBDC, citing risks to privacy and financial stability, and instead positions private sector stablecoins as the preferred vehicle for digital dollar payments. This approach is designed to reinforce the global role of the U.S. dollar, promote innovation, and ensure the U.S. remains at the forefront of payment technology.
4. Countering illicit finance
The report addresses the dual imperative of protecting the U.S. financial system from illicit finance risks while preserving the rights of lawful users
- Modernising the BSA/AML/CFT framework: legislative updates to the Bank Secrecy Act (BSA) and related regulations are recommended to address the unique risks in the digital asset ecosystem, including clarifying which participants in the digital asset sector — such as exchanges, stablecoin providers and DeFi platforms — must comply with AML/CFT requirements
- Enhanced information sharing: the Treasury should expand public-private information sharing programs to improve detection and disruption of illicit finance, while protecting civil liberties and data privacy
- Expanding the treasury's enforcement tools: legislative updates to grant the Treasury authority to impose special measures on certain digital asset transactions, enabling more effective targeting of foreign exchanges and illicit actors
The report acknowledges the challenges posed by cross-border activity, anonymity-enhancing technologies, and regulatory arbitrage, but emphasizes the need to balance risk mitigation with the protection of lawful users' privacy and rights. It also recognizes that overbroad or ill-fitting regulation could drive activity underground or offshore, undermining both innovation and effective oversight.
5. Taxation and reporting
The report recognizes that the rapid growth of digital assets has outpaced existing tax laws, creating uncertainty for taxpayers and regulators
- Clarifying tax treatment: issuing guidance on the timing and character of income from staking, mining, airdrops and hard forks; the treatment of digital asset loans; and the application of mark-to-market and wash sale rules
- Improved third-party reporting: implementing robust information reporting requirements for digital asset brokers, aligned with international standards to prevent tax evasion and ensure transparency
- Legislative updates: amending tax laws to treat digital assets as a new class of assets, with rules tailored to their unique characteristics
The report notes that clear and consistent tax treatment is essential for both compliance and the growth of the digital asset sector. Uncertainty in tax rules historically has been a barrier to entry and a source of risk for both individuals and businesses.
The report also has additional recommendations for cybersecurity, calling for principles-based cybersecurity standards, and urges the U.S. to take a leadership role in shaping international regulatory frameworks for digital assets, working with major financial centers and international bodies to promote a level playing field and to protect national interests.
Takeaways for Canadian businesses and investors
For Canadian businesses and investors, the U.S.'s new approach to digital asset regulation carries several important implications.
With a clear policy to support innovation, regulatory clarity and dollar sovereignty, the U.S. is positioning itself as the global leader in digital financial technology. Canadian firms operating cross-border or serving U.S. clients should expect a more predictable and innovation-friendly regulatory environment south of the border, which may influence Canadian policy and market dynamics.
The U.S.'s embrace of stablecoins, clear asset classification, and technology-neutral regulation will likely accelerate the development of new products, services and business models. Canadian businesses should be prepared for increased competition from U.S.-based firms, but also for new opportunities to partner, innovate and access deeper, more liquid markets.
As the U.S. moves to pre-empt state-level regulation and align with international standards, Canadian firms should monitor developments closely and engage with policymakers to ensure cross-border activity remains efficient and compliant. Enhanced information-sharing, AML/CFT standards, and tax reporting requirements will require robust compliance frameworks and proactive engagement with both U.S. and Canadian regulators.
President Trump's Executive Order 14178 and the accompanying report mark a decisive shift in U.S. digital asset policy, with a focus on innovation, regulatory clarity, and global leadership. For Canadian businesses and investors, the message is clear: the U.S. is open for digital asset business, and the competitive landscape is evolving rapidly. Staying informed, agile and engaged will be essential to capitalizing on the opportunities — and navigating the challenges — of this new era in digital finance.
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