7toraka

Market makers are specialized financial firms or entities that continuously provide buy (bid) and sell (ask) prices for ETF shares on stock exchanges. They stand ready to buy shares from sellers and sell shares to buyers at publicly quoted prices, ensuring investors can enter or exit ETF positions easily without waiting for a matching counterparty.

Roles of Market Makers in ETF Trading:

Providing Liquidity:
👉Sometimes, there may be more buyers than sellers (or vice versa) for an ETF on the exchange, making it difficult to trade. Market makers fill in this gap by buying from sellers or selling to buyers instantly.
👉This ensures a smooth trading experience with limited price swings due to supply-demand imbalances.
Keeping ETF Price Aligned with Value (NAV):
👉ETFs have an underlying value called Net Asset Value (NAV), which represents the value of the assets the ETF holds.
👉Market makers help keep the ETF’s market price close to its NAV by engaging in arbitrage.
👉Example: If ETF shares trade above NAV (at a premium), a market maker can create new ETF shares by delivering the underlying basket of assets to the ETF provider, then sell those shares at the higher price, making a profit and bringing prices down closer to NAV.
👉Conversely, if shares trade below NAV (at a discount), market makers buy shares and redeem them with the ETF provider for the underlying assets, pushing prices back up.

Creation and Redemption Mechanism:
👉Market makers work closely with Authorized Participants (APs), often large banks or financial institutions with the exclusive right to create or redeem ETF shares in large blocks.
👉When demand for an ETF increases, market makers/APs create new shares by delivering the underlying assets to the fund.
👉When demand decreases, they redeem shares for the underlying assets, maintaining equilibrium.

Why Market Makers Matter

👉They boost liquidity, enabling investors to buy or sell ETF shares at any time with small bid-ask spreads.
👉They reduce price volatility by preventing ETF prices from drifting too far from the underlying asset values.
👉They enable ETFs to trade efficiently and fairly, similar to stocks, enhancing investor confidence in the ETF market.

An Exchange-Traded Fund (ETF) is like a basket of assets like stocks, bonds, or cryptocurrencies, that investors buy shares of, similar to buying stocks. Instead of owning the actual assets yourself, you own a portion of the fund which holds those assets.

🤷How Does a Bitcoin ETF Work?

Spot Bitcoin ETF (Example: IBIT by BlackRock)
Imagine a fund manager buys 1,000 Bitcoins and stores them securely. This fund is then divided into shares, and each share represents a small fraction of those Bitcoins. If the price of Bitcoin rises, so does the value of each share.
👉You buy shares of this ETF on a regular stock exchange via your broker.
👉You don’t need to worry about wallets, private keys, or security risks of holding Bitcoin directly.
👉The ETF price moves almost in real-time with Bitcoin’s market price.
👉Market makers help maintain the link between ETF shares' price and the actual
Bitcoin price by creating or redeeming shares as demand changes.
👉Example: If Bitcoin is $30,000 and the ETF breaks the fund into 1 million shares, each share might be worth roughly $30 (minus fees).

Bitcoin Futures ETF (Example: BITO by ProShares)

Instead of holding Bitcoins directly, this ETF invests in futures contracts, which are agreements to buy or sell Bitcoin at a set price in the future.

👉The ETF’s price tracks Bitcoin’s expected future price, not the current price.
👉This involves less risk of theft or loss since no actual Bitcoin is held.
👉However, the ETF price can deviate from actual Bitcoin prices due to how futures expire and roll over.
👉Useful for investors wanting exposure without holding Bitcoin but aware of potential price disconnects compared to spot price.

Key Components Inside a Bitcoin ETF

👉Underlying Asset: Actual Bitcoin (spot ETFs) or Bitcoin futures contracts (futures ETFs).
👉Shares: Represent fractional ownership in the fund’s total Bitcoin holdings or futures contracts.
👉Custodians: Specialized entities manage and secure the underlying Bitcoin assets, often using “cold storage” (offline hardware wallets) to prevent hacking.
👉Market Makers: Facilitate liquidity and arbitrage to keep ETF prices aligned with Bitcoin’s market value.
👉Management Fees: Cover the fund operation costs, typically a small annual percentage.

Why Use Bitcoin ETFs?

👉Simplifies investing in Bitcoin with traditional brokerage accounts.
👉Avoids managing digital wallets and private keys.
👉Provides regulatory oversight and investor protections.
👉Allows Bitcoin exposure in retirement accounts and other traditional financial vehicles.
👉Easier liquidity compared to directly buying and selling Bitcoin on crypto exchanges.

#crypto

The current landscape for investment firms and hedge funds in the US crypto economy is undergoing a transformative shift toward regulatory clarity and a crypto-friendly framework. Key developments include the passage of major crypto legislation like the GENIUS and CLARITY Acts, and regulatory initiatives led by the SEC under Chair Paul Atkins such as "Project Crypto," which aim to modernize securities laws to foster innovation and capital formation in digital asset markets. Investment firms can expect clearer rules distinguishing digital commodities
(regulated by the CFTC) and tokenized securities or investment contracts (regulated by the SEC), allowing for flexible registration and compliance strategies.
This new framework facilitates integration of crypto assets into mainstream finance, enabling regulated products like Bitcoin and Ethereum ETFs, and expanding institutional access to staking rewards and tokenized securities. The FDIC has also removed previous roadblocks for banks engaging in crypto activities, further easing institutional participation.
The shift is characterized by a move away from aggressive enforcement and uncertainty seen under the prior administration to proactive regulation that balances innovation with consumer protection. This regulatory clarity is expected to drive increased institutional investment, innovation, and market depth in the US crypto sector.

Regulatory Framework and Key Legislation

👉The CLARITY Act establishes an asset-based system clarifying which agency regulates crypto businesses—CFTC for digital commodities and SEC for tokenized
securities, allowing dual or flexible registration.
👉The GENIUS Act provides further clarity around stablecoins and broader crypto regulation.
👉The SEC's Project Crypto is a sweeping reform initiative to modernize securities laws to support crypto innovation and capital formation with clear regulation and
exemptions.
These laws reflect a push to treat crypto platforms like other financial institutions, incorporating strong AML and KYC protections.

Opportunities for Investment Firms and Hedge Funds

👉Approval of Bitcoin and Ethereum spot ETFs and anticipated new staked ETFs provide institutional investors accessible, regulated crypto exposure.
👉Tokenized securities on blockchain gain clearer regulatory treatment, encouraging
hedge funds to explore new investment vehicles.
👉Enhanced regulatory certainty will enable better risk assessment, fund structuring, and compliance planning.
👉Banks are now more permissive regarding crypto-related activities, reducing
friction for institutional crypto custody and trading.

Market and Economic Implications
👉A clearer regulatory framework reduces legal risks and supports sustainable growth for crypto investment firms.
👉Regulatory integration is expected to deepen liquidity and market sophistication.
👉The US aims to become a global leader in regulated digital asset markets, attracting capital domestically and internationally.
👉However, increased crypto adoption also calls for vigilance against conflicts of
interest and maintaining consumer protections to avoid repeating past financial sector pitfalls.
Overall, the US crypto investment landscape for hedge funds and investment firms
is entering a phase of clarity, opportunity, and institutionalization under a crypto-friendly yet regulated environment. This enables sophisticated asset management and innovation with an aligned legal framework.

The Trump family has developed a substantial presence in the cryptocurrency space, including meme coins, crypto exchanges, stablecoins, and large bitcoin holdings. Their ventures have significantly increased their wealth, with crypto assets reportedly accounting for a major portion of their net worth. The family's companies also actively collaborate with large crypto industry players and have raised billions for crypto acquisitions and initiatives. Additionally, some of Trump's sons hold board positions in affiliated crypto enterprises. Their activities have attracted both admiration and concerns about conflicts of interest.

List of Trump Family Crypto Businesses:

Trump Media and Technology Group (TMGT)
👉TMGT owns media properties and has expanded into cryptocurrency, amassing roughly $2 billion in bitcoin and related assets.
👉The group announced a $6.42 billion fundraising to acquire digital tokens, notably the Cronos token from Crypto.com.
👉TMGT partnered with Crypto.com to integrate its token and crypto wallet into TMGT platforms.
👉TMGT trades publicly under the ticker DJT.

World Liberty Financial
👉Founded by the Trump family as a crypto venture, World Liberty offers its own proprietary token called $WLFI and a stablecoin named USD1.
👉The family reportedly owns a 60% stake and a large number of $WLFI tokens.
👉Eric Trump and Donald Trump Jr. are involved on the board of affiliated companies.
👉World Liberty announced large-scale deals such as a $1.5 billion purchase plan backed by a publicly traded tech company, and a $2 billion investment from an Abu Dhabi-backed firm in the USD1 stablecoin to buy Binance stakes.

$TRUMP and $MELANIA Meme Coins
👉Released as meme cryptocurrencies linked directly to President Trump and his family.
👉These coins have generated hundreds of millions in revenue.

American Bitcoin
👉A distinct Bitcoin mining operation involving Trump's sons Eric and Donald Jr.
These crypto initiatives collectively represent a large share of Trump-related wealth and form a significant crypto empire with various public and private deals ongoing. The Trump family's crypto activities are not just investment-related but also operational with intended political and financial services ambitions.

Bitcoin treasury companies are publicly traded firms that treat Bitcoin as a primary corporate asset, holding a majority of their value in Bitcoin rather than traditional reserves like cash or bonds. These companies raise capital by issuing stock, bonds, or other securities to buy Bitcoin, providing investors with regulated, indirect exposure to Bitcoin prices.
Different from traditional companies holding Bitcoin as a small strategic hedge; treasury companies focus primarily on aggressive Bitcoin accumulation.
Prominent examples include MicroStrategy, Tesla, Block, and others holding sizable Bitcoin reserves, sometimes representing billions of dollars in assets.

How They Influence Bitcoin Prices:
👉Collectively hold around 3-4% of total Bitcoin supply, creating significant market demand as they acquire Bitcoin.
👉Buying activity by these companies can impact daily Bitcoin price moves, sometimes by up to 9% on purchase days.
👉Capital they raise ("dry powder") represents latent buying power that could potentially push Bitcoin prices higher if fully deployed, with estimates indicating a potential $42,000 boost per Bitcoin.
👉Premiums on their stock relative to Bitcoin holdings incentivize continuous Bitcoin accumulation, reinforcing positive demand cycles.
👉Impact varies depending on their ongoing buying activity, market conditions, and investor sentiment, making them important but not sole market movers.

Strategic and Legal Context:
👉Their business model is a novel corporate treasury strategy combining traditional capital markets with cryptocurrency investment.
👉They navigate complex securities laws, custody requirements, and accounting standards for digital assets. The rise of these companies represents increased institutional acceptance and a shift in corporate finance towards digital assets.
👉They provide regulated, accessible Bitcoin exposure to investors who may face restrictions on direct cryptocurrency ownership, broadening Bitcoin's institutional footprint.
In sum, Bitcoin treasury companies serve as a bridge between traditional capital markets and the cryptocurrency ecosystem, driving both corporate innovation in treasury management and meaningful demand pressures on Bitcoin prices. Their growing presence marks a significant evolution in Bitcoin’s role as a corporately held asset and investment opportunity.

The political overview of U.S. crypto policy from previous administrations to the current Trump administration in 2025 shows a significant evolution from skepticism and hostility to strong support and active promotion.

Previous American Governments:
Earlier administrations, including Trump's first term, generally took a cautious or even hostile stance toward cryptocurrencies. They imposed strict regulations and enforcement actions that limited the growth of the crypto industry. The Biden administration continued regulatory crackdowns and set cautious policies toward digital assets.
Trump Administration in 2025:
In contrast, the Trump administration in 2025 has made a dramatic 180-degree turn in crypto policy, embracing cryptocurrency as an essential part of the American economy and innovation landscape.
👉Upon inauguration, President Trump signed an executive order supporting the responsible growth and use of digital assets and blockchain technology across all sectors of the economy.
👉He established a Presidential Working Group on Digital Asset Markets chaired by a crypto-savvy venture capitalist to develop a comprehensive federal regulatory framework for digital assets, including stablecoins.
👉The administration repealed certain Biden-era crypto policies perceived as obstacles and began rolling back regulatory crackdowns, signaling openness to the widespread adoption of blockchain.
👉The administration introduced ambitious initiatives such as creating a Strategic Bitcoin Reserve and expressed interest in making the U.S. the "crypto capital of the world."
👉Major pro-crypto legislation like the GENIUS Act was signed into law, providing clarity and support to the stablecoin market and broader industry.
👉The administration actively involved agencies like the SEC and CFTC to facilitate crypto trading, market structure reforms, and regulatory clarity.
This policy shift reflects a libertarian approach with limited regulatory interference, promoting innovation and integration of cryptocurrencies into the broader financial system while reducing protections traditionally aimed at retail investors.
Overall, the current government under Trump in 2025 represents a landmark policy
reversal, positioning the United States to lead global digital asset innovation—a sharp departure from the skepticism and restrictive measures of previous governments. This shift aims to embed crypto as a foundational element of the U.S. economy and financial system with broad bipartisan legislative support emerging in Congress.

On August 7, 2025, President Donald Trump signed an executive order titled "Democratizing Access to Alternative Assets for 401(k) Investors", which expands investment options in 401(k) and defined contribution plans to include cryptocurrencies, private equity, real estate, commodities, and other alternative assets. The goal is to provide ordinary retirement savers access to asset classes previously limited to wealthy and institutional investors, potentially boosting diversification and returns.
Key Directives in the Executive Order
👉The U.S. Department of Labor (DOL) is directed to reexamine and clarify its fiduciary guidance under the Employee Retirement Income Security Act (ERISA) regarding alternative investments, including the issuance of appropriate safe harbors to protect fiduciaries from litigation risk.

👉 The Securities and Exchange Commission (SEC) is instructed to revise regulations and guidance to enable participant access to alternative assets in defined contribution plans.

👉 The Treasury Department and other federal agencies are tasked with collaborating to remove barriers and align regulations facilitating alternative asset investment access.

👉 Fiduciaries will retain discretion to decide if including alternative assets fits the best interests of plan participants while balancing risk and return.
New Guidelines and Regulatory Steps
👉The DOL rescinded its 2022 guidance warning against crypto in 401(k)s, shifting to a facts-and-circumstances prudence standard for fiduciary evaluation under ERISA.

👉 The DOL has 180 days to propose new guidance or rules outlining fiduciary criteria for offering alternative assets, balancing potential higher costs with diversification and long-term returns.

👉 Safe harbors may be developed to reduce fiduciary litigation exposure when prudent processes are followed.

👉 The SEC will adjust regulations to support broader access to private equity, cryptocurrencies, real estate, and other alternative investments within workplace retirement plans.

👉 Plan sponsors will be encouraged to revise plan documents and investment policies to set allocation limits (e.g., crypto exposure capped below 10%) and improve participant disclosures and education.

👉 Alternative asset access may be structured through professionally managed funds or brokerage windows to address valuation, liquidity, and compliance challenges.

👉 ERISA fiduciary duties of prudence, loyalty, and diversification remain paramount, requiring diligent due diligence and risk management.
Implications
👉This policy shift may unlock new capital avenues for sectors like private equity and digital assets and provide savers new diversification and growth opportunities.

👉 It adds complexity and risks for fiduciaries and participants, making education and oversight critical.

👉 The rollout timeline suggests regulatory guidance and plan adjustments will unfold over months.

👉 Market participants, fiduciaries, and regulators will watch closely for litigation risks and participant protections amid expanded alternative investment offerings.
This executive order and the respective regulatory developments represent a major modernization of retirement plan investing, allowing broader participant access to alternative assets while underscoring the need for prudent fiduciary management and clear regulatory guardrails.

The CLARITY Act, officially known as the Digital Asset Market Clarity Act of 2025, is a landmark U.S. law designed to bring clarity and order to digital asset regulation by clearly defining the roles of the SEC and CFTC over different types of crypto assets. This act was passed by the U.S. House of Representatives on July 17, 2025, and is now being considered by the Senate.
The Act replaces the ambiguous Howey Test with a new classification system based on asset characteristics and decentralization levels,creating three main categories:
👉Digital Commodity: Commodities such as Bitcoin, Ethereum, utility tokens, and decentralized mature blockchain assets fall under the exclusive jurisdiction of the CFTC. This includes extending registration requirements for digital commodity exchanges, brokers, and dealers, along with provisional registration status to ease transitional compliance.
👉Investment Contract Asset: These are tokens functioning as securities, mainly early-stage projects or centrally managed tokens with profit expectations, governed by the SEC's registration, reporting, and enforcement rules.
👉Mature Blockchain System: This transitional status allows blockchain projects to achieve a fully decentralized state within four years, enabling them to be treated as digital commodities rather than securities, thus reducing regulatory burdens.

👉The Act grants the CFTC exclusive authority over antifraud and antimarket manipulation enforcement in digital commodities, including spot (cash) markets, which was previously unclear.

👉The SEC maintains jurisdiction over the registration and oversight of investment contract assets, including primary offerings and issuers. It also keeps antifraud authority over securities-related transactions on SEC-registered platforms.
👉For stablecoins intended as payment methods, the Act assigns primary supervisory authority to banking regulators, though both the CFTC and SEC retain antifraud enforcement powers over their respective platforms.
👉 The CLARITY Act preempts state-level securities laws for digital commodities, designating these as covered securities, thereby harmonizing regulation across states.
👉 It also revises accounting rules (replacing SAB 121) to facilitate traditional financial institutions’ custody of digital assets, encouraging broader institutional participation.

Impact and Significance
The CLARITY Act concludes the long-standing regulatory ambiguity by:
👉 Providing a clear, functional framework that allocates the CFTC as the primary regulator for commodities and spot markets and the SEC as the overseer of security tokens and primary offerings.
👉Creating a legal pathway for projects to transition to decentralized, mature blockchain systems, fostering innovation and compliance.
👉Enhancing investor protections with clear disclosure and registration rules while promoting market integrity through defined antifraud enforcement.
👉Aligning U.S. digital asset regulation with international standards, increasing the U.S. competitiveness in the global crypto market.
This legislative clarity is expected to reduce compliance risks, promote innovation, and provide a more stable environment for crypto investors, exchanges, and developers in the U.S.

The GENIUS Act (Guiding and Establishing National Innovation in U.S. Stablecoins Act) is the first comprehensive federal regulatory framework in the U.S. tailored specifically for stablecoins. Passed by the Senate on June 17, 2025, and signed into law by President Donald Trump on July 18, 2025, the Act represents a major step toward legitimizing and regulating stablecoins as digital payment tools within the U.S. economy.
It aims to reduce regulatory uncertainty, enhance consumer protections, and encourage the broader adoption of stablecoins by banks and fintech companies alike.
Key Provisions and Regulatory Framework
Licensing and Permitted Issuers
👉The Act restricts the issuance of payment stablecoins to “permitted payment stablecoin issuers,” which includes subsidiaries of insured depository institutions (banks, credit unions) with approval from their primary federal regulator, federally qualified nonbank issuers approved by the OCC, and state-qualified issuers with less than $10 billion in issuance approved by a certified state regulator.

👉 Once a state-qualified issuer exceeds $10 billion in stablecoin issuance, it must transition to federal oversight.

👉 Non-financial companies looking to issue stablecoins must satisfy a more rigorous approval process.
Reserve Requirements
👉 Issuers must maintain full reserves backing all outstanding stablecoins on at least a 1:1 basis.

👉 Permitted reserve assets include U.S. coins and currency, demand deposits at insured institutions, short-term U.S. Treasury securities, and certain money market funds.

👉 Reserves cannot be pledged or reused except to meet redemption requests.

👉 Monthly public disclosure of reserve assets composition, total number of outstanding stablecoins, and redemption policies is required, certified by the issuer’s CEO and CFO, and verified by an external registered public accounting firm. False certifications carry criminal penalties.
Transparency and Customer Protection
👉 Monthly public reporting is required on issuance and redemption activity.

👉 Segregation of customer assets and restrictions on commingling enhance customer protection.

👉 In insolvency or bankruptcy, stablecoin holders’ claims receive priority over other creditors.

👉 Redemption rights must be clear, timely, and effective, allowing holders to redeem stablecoins for an equivalent monetary value.
Supervisory and Compliance

👉 Federal and state regulators share supervisory responsibilities depending on the issuer’s size and structure.

👉 Issuers are subject to regulations aligned with the Bank Secrecy Act, including AML and CFT measures.

👉 Regulators have the power to conduct examinations, enforce compliance, and mandate rulemaking on capital, liquidity, and risk management.

👉 Issuers must have mechanisms to comply with lawful orders to seize, freeze, or burn stablecoins when necessary.
Legal Clarifications and Market Impact
👉 The Act amends existing securities laws to clarify that compliant payment stablecoins are neither securities nor commodities, removing prior legal ambiguities.

👉 It aims to maintain U.S. leadership in the global digital asset economy by fostering demand for U.S. Treasuries through mandated reserve holdings.
Enforcement Timeline
👉 The Act’s key provisions take effect on the earlier of January 18, 2027, or 120 days after final regulations issuance.

👉 Violation of compliance leads to prohibition on offering or selling payment stablecoins outside the permitted framework.

The President’s Working Group on Digital Asset Markets (PWG) July 2025 report, titled "Recommendations to Strengthen American Leadership in Digital Financial Technology," is a comprehensive 163-page document that lays out the Trump administration’s detailed agenda for creating a unified, innovation-friendly regulatory framework for the U.S. digital asset ecosystem. This report responds directly to Executive Order 14178 signed in January 2025, outlining over 100 regulatory and legislative recommendations. The report aims to propel the U.S. to global leadership in blockchain and digital assets while addressing risks such as illicit finance and cybersecurity threats.
Introduction and Policy Rationale

The report opens by emphasizing that digital assets are becoming a foundational pillar of the future financial system. Growing international competition, the rapid adoption of blockchain infrastructure, and increasing financial crime risks drove the urgent need for coordinated federal action. The PWG, which includes senior officials from the Treasury, Justice Department, Commerce, Homeland Security, SEC, CFTC, and the National Security Council, stresses the importance of balancing innovation and security.
Digital Asset Ecosystem Overview

The report provides an extensive overview of the digital asset market, covering:

👉The rise of stablecoins, tokenized financial instruments, and decentralized finance (DeFi).
👉Market participants such as custodians, exchanges, wallet providers, and protocol developers.
👉The fragmentary current regulatory environment across various federal and state jurisdictions, noted as a barrier to responsible growth and innovation.

Market Structure and Regulatory Framework

A central pillar of the report is the call for a fit-for-purpose federal regulatory framework:

👉It urges Congress to clarify the division of oversight between the SEC and CFTC, recommending that digital assets classified as securities be regulated by the SEC, while others fall under the CFTC.
👉The report supports legislation like the CLARITY Act, which passed the House, to define digital asset market structures and establish statutory pathways for registration, custody, and trading.
👉Related agencies are encouraged to use interpretive guidance, safe harbors, and no-action relief to provide near-term clarity while Congress works on long-term legislation.
Banking and Blockchain Innovation

The report highlights:

👉Financial institutions exploring tokenized deposits, blockchain-based clearing and settlement, and stablecoin-backed payments.
👉Regulatory uncertainty and inconsistent supervisory expectations as obstacles to adoption.
👉Recommendations for stronger interagency coordination, updated supervisory frameworks, and regulatory sandboxes to facilitate experimentation with blockchain technology in banking.
Stablecoins and the GENIUS Act

The report places strong emphasis on stablecoins, underscoring:

👉The importance of the GENIUS Act (recently enacted legislation) and swift
Treasury and banking regulator rulemaking to implement its provisions.
👉Required compliance measures include transaction monitoring, sanctions
compliance, proper reserve management, redemption rights, and auditability.
👉The report warns about risks from foreign-issued stablecoins to U.S. monetary sovereignty.
👉It mandates freeze-and-reissue features in large stablecoin systems to support law enforcement needs.

Combating Illicit Finance

The report dedicates over 20 pages to national security and illicit finance risks:

👉Digital assets' misuse by ransomware groups, darknet marketplaces, and sanctions evaders.
👉Calls for DOJ, Treasury, DHS, SEC, and CFTC to prioritize enforcement actions.
👉Recommendations that Congress update the National Stolen Property Act to classify digital assets as “property.”
👉Proposals to expand anti-tip-off laws to include virtual asset service providers and enable asset forfeiture even without traceable provenance, like cash.
Cybersecurity and Infrastructure Security

The report highlights growing cyber threats:

👉State-sponsored hacking groups exploiting vulnerabilities in smart contracts and infrastructure.
👉Recommendations for digital asset firms to enforce cybersecurity standards such as multi-factor authentication, code audits, role separation, and secure custody practices.
👉Calls for regulatory bodies to develop and enforce these standards.

Encouraging Private Sector Collaboration

The report emphasizes the importance of public-private partnerships:

👉Encourages blockchain intelligence firms, financial institutions, and protocol
developers to share typologies, pilot compliance models, and participate in regulatory sandboxes.
👉These efforts are essential for fostering lawful innovation while enabling real-time risk management.
Implementation Outlook and Public Statements

👉The report calls for swift congressional action and agency rulemaking.
👉Treasury Secretary Scott Bessent described it as a "grading rubric" for American leadership in digital assets.
👉SEC Chairman Paul Atkins announced "Project Crypto," an initiative aligning
securities laws with digital asset realities, promoting innovation while protecting investors. See U.S. SEC "Super-App".
👉The report reflects a whole-of-government approach, moving beyond the piecemeal federal efforts of prior administrations toward a coordinated and forward-looking digital asset policy.

#crypto

The Executive Order titled "Strengthening American Leadership in Digital Financial Technology," signed by President Trump in January 2025, provides crucial context about the composition and focus of the President's Working Group on Digital Asset Markets (PWG) and sheds light on the Federal Reserve's (Fed) notable absence from it.
Reason for Federal Reserve's Absence
The Executive Order establishes the PWG to develop a federal regulatory framework for digital assets, including stablecoins and a potential national digital asset stockpile. The PWG includes heads of key government agencies such as the Treasury, SEC, CFTC, Commerce, Homeland Security, Justice, and others critical to digital asset innovation and market oversight. However, the Fed is not included in the official membership.
The reason for this exclusion is rooted in the administration's policy stance articulated in the Executive Order, which emphasizes promoting private-sector innovation in digital assets, protecting economic liberty, and explicitly prohibiting the establishment, issuance, circulation, and use of Central Bank Digital Currencies (CBDCs) in the U.S. The order directs agencies to take measures to protect Americans from CBDCs, which are seen as threats to financial stability, privacy, and U.S. dollar sovereignty. This framework limits the Fed's role since CBDC initiatives fall under its purview, and the administration's stance is to prohibit such developments.
Thus, the Fed is deliberately sidelined from PWG activities to prevent central bank-led digital currency projects from overshadowing private innovation and market-driven stablecoins.
Federal Reserve's Position
The Fed has maintained a cautious, low-profile approach to crypto regulation. Historically, it investigates CBDC feasibility and oversees financial stability but has refrained from assertive regulation of crypto markets. The Fed has neither publicly opposed nor criticized the PWG's formation or its exclusion. However, the Fed has also distanced itself from assertive crypto regulation by withdrawing from certain joint regulatory statements, signaling a more restrained role consistent with the administration's policy.
Public and Industry Opinion
Public opinion on the Fed's absence from the PWG is mixed. Proponents of the
administration’s approach argue that excluding the Fed promotes innovation by reducing bureaucratic hurdles and preventing central bank overreach. They applaud the emphasis on private-sector stablecoins and lighter-touch regulation that supports entrepreneurial growth and U.S. leadership in blockchain technology.
Conversely, critics worry that sidelining the Fed may undermine systemic financial
oversight and stability. They emphasize the Fed's central role in monetary policy and argue that its absence from crypto policymaking risks regulatory fragmentation and unchecked risks in digital asset markets. Some fear that excluding the Fed leaves oversight gaps that could jeopardize market integrity and consumer protection.
#crypto

David Sacks, President Trump's crypto and AI czar, faced scrutiny after Trump's announcement of a U.S. strategic crypto reserve featuring cryptocurrencies linked to companies in which Sacks had investments. Critics alleged Sacks stood to benefit financially from the policy.

Sacks responded by denying any conflict of interest. He stated that he had divested from all personal crypto-related holdings before joining the administration, including his stake in Multicoin Capital. The question remained about whether his venture capital firm, Craft Ventures, had retained its investment in Bitwise, a crypto index fund manager linked to assets in the reserve plan.
A source close to Craft Ventures later confirmed that the firm exited its Bitwise position prior to the start of the administration, with their website updated to reflect the exit in January 2025. Craft Ventures, Bitwise, and Sacks have not publicly commented on the exit, citing ongoing government clearance processes.
Sacks dismissed the controversy on social media, calling the idea that successful businesspeople join government to make more money a "lazy and stupid narrative," emphasizing that government service involves significant disruption and divestiture of business interests.
Despite Sacks' reassurances, conflict of interest concerns remain in the crypto community, especially given Trump's own crypto holdings linked to the reserve. On top of this, White House memos revealed that Sacks and Craft Ventures divested over $200 million in crypto-related investments, including Bitcoin, Ethereum, Solana, Coinbase, Robinhood, and several crypto-focused venture funds, before he took office. A waiver was granted acknowledging the extensive divestment and confirming that residual holdings were minimal.
This divestment move was aimed at preventing conflicts of interest as Sacks helped guide crypto policy, including the creation of a legal framework for the crypto industry and overseeing the new Strategic Bitcoin Reserve funded through confiscated assets, not taxpayer money.

#crypto

Who is David Sacks??? He serves as the Chair of the President's Working Group on Digital Asset Markets (PWG) under the Trump administration, a role he assumed following his appointment as Special Advisor for Artificial Intelligence and Crypto. The PWG was established by an executive order signed by President Trump in January 2025 with the goal of developing a comprehensive federal regulatory framework for digital assets in the United States. As chair, Sacks leads the group in coordinating regulatory and legislative recommendations to foster innovation, clarify
rules, and strengthen American leadership in the rapidly evolving digital asset ecosystem.
Sacks is a well-known Silicon Valley venture capitalist and technology industry veteran, with a background that includes founding and investing in various tech startups, including early involvement at PayPal and Craft Ventures. His appointment aligns with his deep expertise in both the tech and crypto sectors and his advocacy for a "pro-innovation" regulatory approach that aims to integrate digital assets into mainstream finance.
Despite his prominent role, Sacks has faced scrutiny regarding potential conflicts of interest due to his personal investments in AI and cryptocurrency companies. Critics have raised concerns about the potential for the administration's policies to disproportionately benefit wealthy insiders or selectively influence crypto asset markets. In response, Sacks has taken steps to divest certain holdings and has emphasized transparency and fairness in the formulation of policies.
Under Sacks’ leadership, the PWG released a major report in July 2025 outlining over 100 regulatory and legislative recommendations aimed at establishing a coherent framework for digital assets, emphasizing regulatory clarity, industry growth, and the protection of market participants. The group notably excludes some banking regulators such as the Federal Reserve, focusing instead on a unified, forward-looking approach involving agencies like the SEC, CFTC, and the Department of the Treasury.
In summary, David Sacks as chair of the PWG plays a pivotal role in shaping the Trump administration’s ambitious agenda to position the U.S. as a global leader in blockchain innovation and digital financial technology, while navigating the challenges posed by public scrutiny and ethical concerns.
#crypto

As of 2025, the global landscape of Central Bank Digital Currencies (CBDCs) is rapidly evolving, with significant developments across multiple countries and regions. Here is an overview of the current state worldwide:

Countries with Fully Launched CBDCs:
Eleven countries have fully launched CBDCs, including China with its Digital Yuan, Nigeria, and the Bahamas, marking tangible adoption of these digital currencies.
Advanced Development and Pilots:
Globally, 134 countries and currency unions (covering 98% of global GDP) are exploring or developing CBDCs. Of these, 66 countries are in advanced phases such as pilots and launches. Among G20 nations, every country is involved in CBDC research, with 19 in advanced stages, including Brazil, Japan, India, Australia,Russia, and Turkey.
Regional Collaborations and Cross-Border Trials:
Countries like Australia, Singapore, and New Zealand are conducting cross-border CBDC trials, aiming to streamline international payments. The Eastern Caribbean Central Bank operates a regional CBDC pilot (DCash) across seven island nations.
Noteworthy Projects and Legal Frameworks:
The European Central Bank finalized a Digital Euro regulatory framework with pilots in Germany, France, and Italy.
Japan passed a Digital Currency Act addressing consumer protections and legal tender status.
Sweden plans full deployment of its e-Krona in 2026 following successful pilots.

Technological Innovations:
China's Digital Yuan includes programmable payments enabling smart contract functionalities. The UAE is preparing to launch the Digital Dirham as legal tender, introducing fintech licensing regulations for digital wallets. The Bank of England introduced a privacy framework for the Digital Pound.
Financial Inclusion and Policy Objectives:
Many CBDCs focus on expanding financial inclusion especially in rural and underserved areas, interoperability with existing payment systems, and maintaining monetary sovereignty while ensuring cyber resilience.
Challenges and Considerations:
Central banks balance designing resilient systems against cyber risks, data privacy concerns, adoption rates, and coexistence with existing fast payment systems and e-money networks. Adoption is expected to vary widely by country, influenced by local constraints and economic structure.
This global push toward CBDCs reflects a transformative move in how money and payments are managed, aiming for digital efficiency, inclusivity, and security while evolving financial landscapes.
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