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.

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