Key Takeaways
Pursuant to Executive Order 14178, a working group today released a 166-page report outlining how the United States can lead the blockchain industry and usher in a "Golden Age of Cryptocurrency."
The report's key messages can be summarized into four main needs: (i) a common classification framework for digital asset markets, (ii) interconnection between the banking and blockchain industries, (iii) accelerated stablecoin adoption, and (iv) guidance on illicit finance and taxation.
In the real world, the momentum for change is increasingly evident, with collaborations between traditional financial institutions (such as JPMorgan Chase) and blockchain-based platforms (such as Coinbase and Robinhood) demonstrating a significant shift toward real-world financial innovation. 1. Countries Recognizing Blockchain's Potential Are Leading the Way In the United States, the government actively recognizes the potential of blockchain and digital assets and is moving forward. On January 23, 2025, President Trump issued Executive Order 14178, "Strengthening American Leadership in Digital Financial Technologies," which clarified regulatory guidelines and encouraged innovation in the field. In response to this order, an interagency working group recently released a 166-page report outlining how the United States can lead the blockchain industry and usher in a "Golden Age of Cryptocurrency." The report reviews the United States' long tradition of technological innovation and assesses the potential of blockchain and digital assets (cryptocurrencies) to fundamentally transform the financial system and asset ownership structures. The report also points out that overly restrictive measures, such as the previous administration's so-called "Operation Choke Point 2.0," have excluded legitimate crypto companies from the banking system and recommends that the government should actively support business activities related to these innovative technologies rather than suppress them. In line with Executive Order 14178, the report emphasizes that U.S. regulators should foster innovation through clear, consistent rules and attract crypto companies to operate domestically. The report urges agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to collaborate on establishing clear standards and a common classification framework to eliminate regulatory gaps. The report also recommends a technology-neutral, flexible regulatory approach for emerging sectors such as decentralized finance (DeFi) to ensure that innovation is not hindered by outdated rules. Meanwhile, Hong Kong is also responding quickly and following suit. In June 2023, the Hong Kong government introduced a formal licensing system for virtual asset exchanges, regulating crypto trading while allowing limited participation by retail investors. In May 2025, Hong Kong passed Asia's most progressive Stablecoin Act, establishing licensing requirements for institutions issuing fiat-pegged stablecoins, effective August 1st. With this "regulated yet innovation-friendly" approach, Hong Kong is expected to stimulate blockchain development and become one of Asia's leading digital asset hubs. 2. Key Messages from the Report, "Strengthening U.S. Leadership in Digital Financial Technology" Since the Trump administration took office, sentiment toward cryptocurrencies in the United States has shifted. As of June 2025, a survey found that 72% of crypto investors support President Trump's policies, and over one-fifth of Americans now own some form of cryptocurrency. Of these investors, 64% stated that the government's supportive stance on cryptocurrencies has made them more inclined to invest in cryptocurrencies than before. This optimism is also spreading among institutional investors: a poll found that 83% of institutional investors plan to increase their allocation to digital assets by 2025. These data suggest that a more welcoming regulatory environment is injecting vitality into the industry. Under the government's banner of "supporting responsible innovation and growth," the report repeatedly emphasizes that by implementing pro-cryptocurrency policies and a clear regulatory environment, the United States can take a leading position in the coming blockchain revolution. The report's key messages can be summarized in four main points. Let's explore them in detail. 2.1 A Common Classification Framework for Digital Asset Markets Must Be Established This section discusses the legal and regulatory classification of digital assets and approaches to improving market structure. Currently, in the United States, there are no clear criteria for determining whether a cryptocurrency is a security or a commodity. This ambiguity has led to jurisdictional conflicts between regulators such as the SEC and the CFTC and created overlapping regulatory frameworks. The report criticizes this, stating that "the lack of a comprehensive classification framework has led to a patchwork of interpretations, leaving well-intentioned parties attempting to comply with regulations feeling like they are navigating a minefield," and emphasizes the urgent need for a clear, consensus-based taxonomy for digital assets. For example, a digital token used for fundraising might be considered a security (an investment contract) when sold, but once sufficiently decentralized, some argue it should no longer be considered a security. Currently, no standard exists to account for this dynamic change during a project's lifecycle. This leaves projects facing significant uncertainty, as it is difficult to predict which laws will apply over time. Against this backdrop, the report takes a positive view of the Digital Asset Market Clarity Act (CLARITY Act), which passed the US House of Representatives with bipartisan support in 2025. The bill divides digital assets into security tokens and non-security (commodity) tokens, explicitly granting the SEC jurisdiction over the former and the CFTC jurisdiction over the latter and the crypto spot market. The bill also includes provisions protecting the rights of Americans to self-custody their assets and engage in peer-to-peer transactions, and recognizes the value of decentralized governance and decentralized finance (DeFi). The report notes that the CLARITY Act will "lay a sound foundation for the structure of the US digital asset market," but also recommends several improvements during the legislative process. First, the report emphasizes the need for clarification of the legal status of fully decentralized protocols and provides factors for lawmakers to consider, such as:
whether a given software protocol exercises any actual "control" over user assets;
whether the protocol can be technically altered or upgraded;
whether there is a centralized operator or governance structure;
whether current regulatory obligations are technically enforceable.
Based on these criteria, truly decentralized projects cannot be regulated in the manner of traditional intermediaries and therefore require a new approach. Regulators should develop a flexible framework that achieves policy objectives without stifling innovation.
The report hopes that the Digital Asset Market Clarity Act will provide this foundation and urges Congress to pass it swiftly. At the same time, the report recommends that regulators use their existing authorities to take immediate measures during the transition period to increase regulatory clarity for market participants. 2.2 The Banking and Blockchain Industries Should Interconnect This section discusses the integration of the banking and crypto industries and offers policy recommendations for US banks to expand their involvement in digital assets under prudential oversight. The report mentions the previous administration's attempt to cut off banking services to crypto companies—the so-called "Chokepoint 2.0" policy—and criticizes it as a misguided attempt to stifle a legitimate industry by pushing it outside the banking system. The report notes that this top-down pressure has led to many US crypto companies facing bank account closures, resulting in consumer harm and the growth of unregulated "shadow" markets as unintended side effects. The report emphasizes that banks can gain significant efficiencies and cost savings by leveraging blockchain. For example, integrating distributed ledger technology into payment and settlement systems can enable 24/7 real-time atomic settlement of payments and transactions, eliminating operating hours restrictions and reducing the costs associated with central clearing houses. Some major banks have already taken steps in this direction, testing their own digital dollar tokens or blockchain platforms for bond settlement.
Recommendations in this section include:
Clarify banks’ permitted crypto-related activities and revive initiatives such as the Office of Regulatory Innovation to guide banks’ actions in this area.
Increase transparency in the bank charter and Federal Reserve account processes to facilitate new entrants and unfairly prevent incumbent banks from serving crypto customers.
Tie bank capital requirements to actual risks and develop supervisory guidance for new risk exposures such as tokenized assets. 2.3 Stablecoins Should Be Considered an Innovative Digital Tool and Actively Promoted This section focuses on the role of stablecoins in digital payment innovation and consolidating the dominance of the US dollar. Stablecoins are stable crypto assets designed to maintain a 1:1 peg to fiat currencies such as the US dollar. Due to their virtually invariable price fluctuations, they effectively serve as digital cash within the crypto ecosystem. The report assesses that widespread use of dollar-pegged stablecoins could modernize payment infrastructure and help the United States transition away from outdated legacy payment networks. For example, using stablecoins for international remittances or securities settlements could enable near-instant processing, eliminating the need for intermediary banks and significantly reducing fees. This will also enhance the international influence of the US dollar. Currently, dollar-pegged stablecoins account for a significant share of global crypto trading volume, with tens of billions of dollars in circulation. The report emphasizes that to lead this trend, the United States must establish a clear federal regulatory framework for stablecoins. In this context, the report highlights the Guiding and Establishing United States Stablecoin Innovation Act (GENIUS Act), passed by Congress this year. This act (i) establishes a system for private US dollar stablecoin issuers to be approved and regulated by the Federal Reserve and (ii) prohibits the Federal Reserve from developing a central bank digital currency (CBDC), thereby affirming a preference for private-sector-led digital dollar innovation. The report praises the GENIUS Act for "enshrining an innovation-friendly framework into federal law" and strongly urges the Treasury Department and other relevant agencies to implement it faithfully and without delay. The report also notes that while establishing stablecoin regulations, it is necessary to address tax issues. Under current US tax law, the definition of stablecoins is unclear, and their tax treatment may differ depending on whether they are considered currency or property. The report argues that this ambiguity creates a burden for participants, and therefore, once federal regulation of stablecoins is established, tax laws should be updated to clarify their classification and eliminate uncertainty. The core message of this section can be summarized as: "Actively promote stablecoins as a means of digital dollar innovation and firmly oppose central bank digital currencies because they threaten American freedom and financial stability." Regarding stablecoins, the report urges implementation of the newly passed GENIUS Act and recommends the introduction of additional legislation, if necessary, to strengthen privacy protections and consumer safeguards. The report also emphasizes that the United States should take the lead internationally in developing global standards for stablecoins and promoting innovation in cross-border payments. 2.4 Guidance on Illicit Finance and Taxation Must Be Developed This section discusses the illicit financial risks (money laundering, terrorist financing, tax evasion, etc.) associated with cryptocurrencies and measures to address them. The report states that "to embrace innovation while safeguarding national security, we must modernize anti-money laundering (AML) regulations" and analyzes the shortcomings of the current system. Because crypto transactions are anonymous, borderless, and executed in real time, the report acknowledges that enforcing laws designed for the traditional banking industry, such as the Bank Secrecy Act (BSA) or the Travel Rule, is challenging. For example, criminals may use decentralized exchanges or mixers to repeatedly swap or split funds, making transactions difficult to trace. The report cites specific cases—such as the abuse of decentralized finance (DeFi) by North Korean hacker groups in 2022 and ransomware attackers demanding cryptocurrency payments—to illustrate that current AML systems need to be updated to address these new strategies. The report also repeatedly emphasizes that AML/counter-terrorist financing (CFT) enforcement must not be misused in ways that deviate from the legal intent. If AML regulations are used for political purposes or to stifle specific industries, it will only erode trust in the financial system. Therefore, regulators themselves should operate under democratic oversight and transparency and clearly establish guidance to avoid unfairly restricting legitimate businesses and users. The final section offers recommendations for addressing ambiguity and uncertainty in the taxation of digital assets. The report notes that while the US Internal Revenue Service (IRS) generally classifies cryptocurrencies as property, it has not yet established specific tax guidance for new activities such as staking, mining, airdrops, or token wrapping. This lack of clarity has caused significant confusion for taxpayers. The report urges the IRS and Treasury Department to issue clearer and more practical tax guidance and recommends considering establishing a minimum tax exemption for small crypto transactions to avoid penalizing users for using cryptocurrencies for everyday payments. 3. More people should better understand cryptocurrencies. Many countries and companies—with the United States as a prime example—are rushing to announce and implement blockchain strategies, not simply because they are following trends but because they foresee the market's trajectory and are preparing ahead of time. In the United States, companies such as Messari, Delphi, Galaxy Research, and rwa.xyz consistently provide high-quality research to help institutions develop forward-looking strategies for blockchain and digital assets. Protocols like Ondo Finance and Morpho have built secure on-chain financial services, while companies like BitGo and Coinbase provide reliable infrastructure that enables institutions to invest in crypto assets. In contrast, South Korea's fundamental understanding and preparation for the blockchain industry, particularly stablecoins, remains lacking. Discussions about stablecoins tend to focus on the failure of Terra or debates about why stablecoins won't work, with the debate revolving around issuance rather than real-world applications. However, stablecoins have demonstrated diverse use cases globally, and South Korea should focus not only on issuance but also on developing products that integrate them into everyday life. Achieving this requires policy support and a clear regulatory environment. Because the blockchain industry, particularly stablecoins, is still in its early stages, it's difficult to point to specific success stories to justify its adoption. However, this is precisely why maintaining an open mind—essentially, saying, "Let's take a hard look and try to understand this"—is so important. Only by beginning to understand now can we hope to keep pace with the rapid pace of change. 4. Everything is now in place. The lines between the financial and blockchain industries are beginning to blur, with leading players on both sides collaborating. A prime example is the partnership between JPMorgan Chase, the largest US bank, and Coinbase, the crypto exchange. JPMorgan Chase announced that its credit card customers can convert their rewards points into USDC on Coinbase's Base blockchain. The bank will also link customer accounts directly to the Coinbase platform, enabling seamless and near-instant conversions between fiat and cryptocurrencies. This landmark integration between a traditional bank and a crypto exchange demonstrates that major financial institutions now recognize digital assets as a legitimate component of their financial services. This trend extends beyond banks and exchanges. Coinbase has also partnered with Morpho to expand into on-chain finance, also known as decentralized finance (DeFi). Through this partnership, users can deposit their Bitcoin holdings through the Coinbase app and use them as collateral to borrow USDC for everyday expenses. This demonstrates an asset utilization strategy not possible in traditional finance. Investors can effectively manage their daily cash flow while continuing to hold Bitcoin, demonstrating that blockchain-based financial innovation has reached a viable stage. Another development is occurring in the fintech sector. The popular trading platform Robinhood is launching its own Layer-2 blockchain, providing infrastructure for the on-chain issuance and trading of public and private stocks. The Robinhood Chain will eventually connect to the Ethereum ecosystem. This means that fintech platforms will no longer be limited to providing brokerage services but will instead be able to use their own blockchains to handle a wider range of on-chain financial assets. In short, a new trend is emerging in which traditional fintech platforms are adopting blockchain to enable unprecedented asset ownership and liquidity. Unfortunately, unlike these global examples of financial innovation, South Korea is still lagging behind. There have been no concrete collaborations or mergers between South Korean banks, exchanges, fintech startups, and DeFi projects. South Korean institutions may need to at least experiment with a private blockchain platform (such as JPMorgan Chase's private Kinexis network) to gain practical experience. Major countries and financial institutions around the world are already sketching out blueprints for blockchain-driven finance and actively collaborating. If South Korea continues to inaction, all domestic discussions will inevitably remain theoretical and never materialize. Of course, blockchain implementation is no easy task, and caution is understandable while its market impact remains uncertain. However, avoiding issues or endlessly delaying action due to uncertainty is not the best option. The blockchain-driven transformation of the financial system has already begun, and leaders are rapidly learning and accelerating development. The only question remaining is when and how other countries decide to join this wave. The momentum for change is increasingly clear, and now that the puzzle pieces are coming together, it's time to fundamentally deepen our understanding of the blockchain industry and to seriously consider and take action to adopt it.
Kikyo
Weatherly
Alex
Miyuki
Weiliang