White House Encryption Report: A Comprehensive Strategy for U.S. Leadership in Digital Finance

On July 30, 2025, the White House released a significant "Encryption Report," drafted by the President’s Working Group on Digital Asset Markets, outlining the strategic planning for the United States' future in the digital financial technology sector. The report is not only a response to President Trump’s commitment to "make the United States the global encryption capital" at the beginning of his tenure but is also seen as the institutional starting point for the United States to enter the "encryption golden age."

This encryption report is formulated based on Executive Order 14178 signed by Trump, titled "Enhancing America's Leadership in Digital Finance Technology," covering six major areas: legislative proposals, regulatory reform, modernization of the banking system, dollar stablecoin strategy, anti-money laundering upgrades, and tax policy optimization.

##Building the Structure of the Digital Asset Market: Institutional Precedence The encryption report points out that the United States must establish a "highly applicable, transparent, and fair" market structure to lead in the global digital asset competition. To this end, the report recommends:

• The Congress passed legislation granting the Commodity Futures Trading Commission (CFTC) the authority to regulate the spot market for non-securities digital assets, thereby filling the regulatory gap;
• Embrace decentralized finance (DeFi) technology and support its integration with traditional financial systems;
• Require the SEC and CFTC to provide clear guidelines for the federal registration, custody, clearing, and record-keeping of digital asset transactions using their existing authorities.

##Modernization of the Digital Banking System: From Blockade to Openness The report clearly opposes the previous "covert blockade" actions against the encryption industry, such as the infamous "Operation Choke Point 2.0," and states that this policy has been terminated. In the future, the banking system will be allowed to:

• Provide services such as digital asset custody, stablecoin issuance, and tokenized asset support;
• The process of transparent bank license application and reserve bank account acquisition;
• Establish capital requirements based on actual risks rather than "the blockchain itself." This marks the gradual establishment of crypto-friendly banking policies, which are expected to attract a large number of digital asset institutions back to the United States.

##Stablecoin Strategy: Strengthening the Position of the Dollar In order to maintain the core position of the US dollar in the global payment system, the White House signed the "GENIUS Act" on July 18, 2025, which establishes the first federal-level regulatory framework for stablecoins. The encryption report further proposed:

• The Ministry of Finance and relevant banking regulatory agencies need to accelerate the implementation of the GENIUS Act;
• Congress should pass the "Anti-CBDC Surveillance State Act" to explicitly prohibit the issuance of central bank digital currency (CBDC) in the United States, in order to protect privacy and civil liberties. This policy combination of "supporting private stablecoins + banning government-issued CBDCs" demonstrates strong support for market-driven encryption payments.

##Balancing the Crackdown on Illegal Finance and Privacy Protection The report emphasizes the importance of anti-money laundering (AML) and combating the financing of terrorism (CFT), while also pointing out the need to avoid over-regulation that infringes on the rights of legitimate users. Key recommendations include:

• Clarify the compliance boundaries for participants in decentralized finance;
• Support for user self-custody rights;
• Prevent regulatory agencies from abusing their power to interfere with citizens' legitimate actions. This demonstrates the U.S. government's attempt to strike a balance between "security" and "freedom."

##Digital Asset Taxation: From Barrier to Incentive The current digital asset tax system lags behind market development, and the report suggests:

• The IRS has issued tax guidance on new activities such as wrapping transactions and de minimis value receipts;
• Review the historical tax policies for activities such as mining and staking;
• Define digital assets as a new asset class, adapt the tax system logic of securities or commodities, and include them within the scope of the "wash sale rule".

##Conclusion The "White House Encryption Report" not only reflects the U.S. government's positive attitude towards digital assets but also serves as a systematic blueprint for institutional transformation. Whether it is regulatory authorization, banking reform, stablecoin strategy, or tax policy, the core goal is to rebuild America's dominant position in the global digital finance ecosystem, ensuring safety and transparency.

For industry participants, the signals conveyed by this report are clear: the United States is accelerating its embrace of encryption finance and is striving to take the lead in establishing rules and mastering the pace in global competition. The direction of U.S. encryption policy in the coming years will profoundly impact the global market landscape.