The Financial Era of Crypto Assets

The boundaries between the finance and blockchain industries have begun to blur, and leaders from both sides are starting to cooperate.

Written by: xparadigms

Compile: Block unicorn

Key Points

According to Executive Order 14178, a task force today released a 166-page report outlining how the United States is leading the Blockchain industry and ushering in the "golden age of cryptocurrency."

The key information in the report can be summarized into four main requirements: (i) a universal classification framework for the digital asset market, (ii) the interconnection between the banking and blockchain industries, (iii) accelerating the adoption of stablecoins, (iv) guidelines for illegal finance and taxation.

In the real world, the momentum for change is becoming increasingly evident, as the collaboration between traditional financial institutions (such as JPMorgan Chase) and blockchain-based platforms (such as Coinbase and Robinhood) signifies a significant shift towards real financial innovation.

1. Countries Recognizing the Potential of Blockchain are Leading

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 America's Leadership in Digital Financial Technology," which outlined regulatory guidelines and encouraged innovation in the field. According to the order, a cross-departmental working group recently released a 166-page report outlining how the United States can lead the Blockchain industry and usher in the "Golden Age of Cryptocurrency."

The report reviews the long-standing tradition of the United States in technological innovation and assesses how blockchain and digital assets (cryptocurrencies) have the potential to fundamentally change the financial system and the structure of asset ownership. The report also points out that overly strict measures, such as the previous government's so-called "Operation Choke Point 2.0," have excluded legitimate crypto companies from the banking system, and suggests that the government should actively support business activities related to these innovative technologies in the future, rather than suppressing them.

In the spirit of Executive Order 14178, the report emphasizes that U.S. regulators should promote innovation and attract crypto companies to operate domestically through clear and consistent rules. The report urges agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to collaborate in establishing clear standards and a common classification framework to eliminate regulatory gaps. The report also recommends a technology-neutral and flexible regulatory approach for new areas such as decentralized finance (DeFi), ensuring that innovation is not hindered by outdated rules.

At the same time, Hong Kong is also responding quickly and imitating. In June 2023, the Hong Kong government introduced a formal licensing system for virtual asset exchanges, allowing retail investors limited participation while regulating crypto trading. In May 2025, Hong Kong passed Asia's most progressive "Stablecoin Act," which established licensing requirements for institutions issuing fiat-pegged stablecoins, effective from August 1. With this "regulated but innovation-friendly" approach, Hong Kong is expected to stimulate Blockchain development and become one of Asia's leading digital asset centers.

2. Key Information from the Report "Strengthening America's Leadership in Digital Financial Technology"

Since the Trump administration took office, the sentiment towards cryptocurrencies in the United States has changed. 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. Among these investors, 64% indicated that the government's supportive stance on cryptocurrencies makes 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 in 2025.

These data indicate that a friendlier regulatory environment is injecting vitality into the industry. Under the government's banner of "supporting responsible innovation and growth," the report emphasizes repeatedly that by implementing policies that support cryptocurrency and a clear regulatory environment, the United States can take the lead in the upcoming Blockchain revolution.

The key information in the report can be summarized into four main points. Let's examine them one by one.

2.1 A universal classification framework for digital asset markets must be established.

This section discusses the legal and regulatory classifications of digital assets and ways to improve market structure. Currently, in the United States, there are no clear guidelines to determine whether a cryptocurrency is a security or a commodity. This ambiguity has led to jurisdictional conflicts between regulators (such as the SEC and CFTC) and has left gaps in regulatory overlap. The report criticizes: "The lack of a comprehensive classification framework has led to a chaotic variety of interpretations, making good-faith participants who are trying to comply with regulations feel as if they are walking through a minefield," emphasizing the urgent need to establish a clear and consensus-based classification system for digital assets.

For example, digital tokens used for fundraising may be considered securities (investment contracts) when sold, but once they are sufficiently decentralized, some believe they should no longer be considered securities. Currently, there is no standard that can explain this dynamic change during the project lifecycle. This creates significant uncertainty for projects, as it is difficult for them to predict which laws will apply over time.

In this context, the report views positively the "Digital Asset Market Clear Act (CLARITY Act)" which was passed with bipartisan support in the U.S. House of Representatives in 2025. The act categorizes digital assets into security tokens and non-security (commodity) tokens, clearly granting the SEC jurisdiction over the former and the CFTC jurisdiction over the latter and the crypto spot market. The act also includes provisions to protect Americans' rights to self-custody assets and engage in peer-to-peer transactions, and recognizes the value of decentralized governance and decentralized finance (DeFi).

The report points out that the Clear Act for the digital asset market will "lay a good foundation for the structure of the US digital asset market," but also suggests some improvements during the legislative process. First, the report emphasizes the need to clarify the legal status of fully decentralized protocols and provides lawmakers with factors to consider, such as:

• Does the given software protocol implement any actual "control" over user assets;
• Can this protocol be technically modified or upgraded;
• Are there centralized operators or governance structures;
• Can the current regulatory obligations be technically enforced?

Based on these standards, true decentralized projects cannot be regulated in the traditional intermediary manner, thus a new approach is needed. Regulatory bodies should establish a flexible framework that can achieve policy goals without stifling innovation.

The report hopes that the clear legislation for the digital asset market can provide this foundation and urges Congress to pass the bill swiftly. At the same time, the report suggests that regulatory agencies take immediate action using existing authorities during the transition period to increase regulatory clarity for market participants.

2.2 The banking industry and the blockchain industry should be interconnected.

This section discusses the integration of the banking industry with the cryptocurrency sector and proposes policy recommendations for U.S. banks to expand their involvement in digital assets under prudent regulation. The report mentions that the previous administration attempted to cut off banking services to cryptocurrency companies — the so-called "Operation Choke Point 2.0" policy — and criticizes this as a misguided attempt to stifle a legitimate industry by pushing it outside the banking system.

The report points out that this top-down pressure has led many American crypto companies to face issues such as the closure of bank accounts, resulting in consumer harm and the growth of unregulated "shadow" markets as an unintended side effect. The report emphasizes that banks can gain a lot in terms of efficiency and cost savings by utilizing Blockchain. For example, integrating distributed ledger technology into payment and settlement systems can enable round-the-clock real-time payments and atomic settlement of transactions, eliminating business hour restrictions and reducing costs associated with central clearinghouses. Some major banks have already taken steps in this direction, testing their own digital dollar tokens or blockchain platforms for bond settlement.

The suggestions in this section include:

• Clarify the cryptocurrency-related activities permitted by banks and restore initiatives such as the Regulatory Innovation Office to guide banks' actions in this area.
• Enhance the transparency of the banking charter and Federal Reserve account processes to facilitate new entrants and not unfairly block existing banks from servicing crypto clients.
• Link bank capital requirements to actual risks and develop regulatory guidelines for new risk exposures such as tokenized assets.

Stablecoins should be regarded as innovative digital tools and actively promoted.

This section focuses on the role of stablecoins in the innovation of digital payments and the consolidation of the dollar's dominant position. Stablecoins are crypto assets with stable value, designed to maintain a 1:1 peg with fiat currencies like the dollar. Due to their price stability, they effectively serve as digital cash within the crypto ecosystem.

The report assesses that the widespread use of dollar-pegged stablecoins can modernize payment infrastructure and help the United States move away from outdated traditional payment networks. For example, using stablecoins for international remittances or securities settlement can achieve near-instant processing without the need for intermediary banks, and significantly reduce costs. This will also enhance the international influence of the dollar. Currently, dollar-pegged stablecoins hold a significant share of global crypto trading volume, with a circulating value of hundreds of billions of dollars. 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 "Guidance and Establishment of the American Stablecoin Innovation Act" (referred to as the GENIUS Act) passed by Congress this year. The Act (i) establishes a system for private dollar stablecoin issuers approved and regulated by the Federal Reserve, (ii) prohibits the Federal Reserve from developing a Central Bank Digital Currency (CBDC), thereby confirming a preference for private sector-led digital dollar innovation. The report praises the GENIUS Act for "incorporating an innovation-friendly framework into federal law" and strongly urges the Treasury Department and other relevant agencies to faithfully and promptly implement the Act.

The report also points out that while establishing rules for stablecoins, it is necessary to address tax issues. According to current U.S. tax law, the definition of stablecoins is unclear, and their tax treatment may vary depending on whether they are considered currency or property. The report argues that this ambiguity creates a burden for participants, and therefore, once a federal regulatory framework for stablecoins is established, tax laws should be updated to clarify the classification of stablecoins and eliminate uncertainty.

The core message of this section can be summarized as: "Actively promote stablecoins as a means of innovating the digital dollar, and firmly oppose central bank digital currencies, as they threaten the freedoms and financial stability of the United States." Regarding stablecoins, the report urges the implementation of the newly passed GENIUS Act and suggests that additional legislation may be introduced if necessary to enhance privacy protection and consumer safeguards.

The report also emphasizes that the United States should take the lead in establishing global standards for stablecoins and promoting innovation in cross-border payments.

2.4 Must establish guidelines for illegal finance and taxation.

This section discusses the illegal financial risks associated with cryptocurrencies (money laundering, terrorism financing, tax evasion, etc.) and the measures to address them. The report points out that "to embrace innovation while ensuring national security, we must modernize anti-money laundering (AML) regulations," and analyzes the shortcomings of the current system.

Due to the anonymous, borderless, and real-time nature of cryptocurrency transactions, the report acknowledges that enforcing laws designed for traditional banking, 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, as well as ransomware attackers demanding cryptocurrency payments—to illustrate that the current AML framework needs to be updated to address these new strategies.

At the same time, the report repeatedly emphasizes that AML/CFT enforcement must not be abused in a way that deviates 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, regulatory agencies themselves should operate under democratic oversight and transparency, and clearly formulate guidelines to avoid unfairly restricting legitimate businesses and users.

The latter part of this section presents suggestions for addressing the ambiguity and uncertainty of digital asset taxation. The report points out that, although the IRS generally classifies cryptocurrency as property, specific tax guidelines have not yet been established for new activities such as staking, mining, airdrops, or token wrapping, and this lack of clarity has caused significant confusion for taxpayers. The report urges the IRS and the Treasury Department to issue clearer and more practical tax guidance and recommends considering the establishment of a minimum tax exemption for small cryptocurrency transactions to avoid penalizing users for everyday payments made with cryptocurrency.

3. More people should better understand cryptocurrency

Many countries and companies—taking the United States as a primary example—are racing to announce and implement Blockchain strategies, not merely to follow the trend, but because they foresee the trajectory of the market and have prepared in advance. In the United States, companies like Messari, Delphi, Galaxy Research, and rwa.xyz continue to provide high-quality research to help institutions formulate forward-looking strategies aimed at 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 basic understanding and preparation for the blockchain industry—especially stablecoins—still seems insufficient. Discussions about stablecoins tend to focus on the failure of Terra or debates about why stablecoins do not work, with arguments always revolving around issuance rather than real-world applications. However, stablecoins have demonstrated various use cases globally, and South Korea should not only focus on issuance but also develop products that integrate them into daily life. Achieving this requires policy support and a clear regulatory environment.

Due to the fact that the blockchain industry (especially stablecoins) is still in its early stages, it is indeed difficult to point out specific success stories to demonstrate the rationale for its adoption. However, this is precisely why it is so important to maintain an open attitude—essentially saying "let's seriously examine and try to understand this". Only by starting to understand now can we hope to keep up with the rapidly changing pace.

4 Everything is now ready

The boundaries between the finance and blockchain industries have begun to blur, with leading players from both sides starting to collaborate. A typical example is the partnership between JPMorgan Chase, the largest bank in the United States, and the cryptocurrency exchange Coinbase. JPMorgan announced that its credit card customers can convert reward points into USDC on Coinbase's Base Blockchain. The bank will also link customer accounts directly to the Coinbase platform, enabling seamless, almost instant exchanges between fiat currency and cryptocurrency. This marks a milestone integration between traditional banks and cryptocurrency exchanges, indicating that major financial institutions now recognize digital assets as a legitimate component of their financial services.

This trend is not limited to banks and exchanges. Coinbase has also partnered with Morpho to expand into on-chain finance—specifically the decentralized finance (DeFi) space. Through this collaboration, users can deposit their held Bitcoin via the Coinbase app and use it as collateral to borrow USDC for everyday spending. This demonstrates an asset utilization strategy that traditional finance cannot achieve. In fact, investors can manage their daily cash flow while continuing to hold Bitcoin, indicating that blockchain-based financial innovation has entered a practical stage.

Another development is occurring in the fintech sector. The popular trading platform Robinhood is launching its own Layer-2 Blockchain to provide the infrastructure for on-chain issuance and trading of listed and private stocks. The Robinhood chain will eventually connect with the Ethereum ecosystem. This means that fintech platforms will no longer just provide brokerage services, but can utilize their own blockchain to handle a wider range of on-chain financial assets. In short, a new trend is emerging where traditional fintech platforms are adopting Blockchain to achieve asset ownership and liquidity in unprecedented ways.

Unfortunately, unlike these global financial innovation cases, South Korea is still lagging behind. There have not yet been specific cooperation or merger initiatives among banks, exchanges, fintech startups, and DeFi projects in South Korea. South Korean institutions may need to at least try a private Blockchain platform (such as JPMorgan's private Kinexis network) to gain practical experience. Major countries and financial institutions around the world have been outlining a Blockchain-driven financial blueprint and actively participating in cooperation. If South Korea continues to do nothing, all domestic discussions will inevitably remain at the theoretical stage and will never be put into practice.

Of course, implementing Blockchain is not easy, and it is understandable to be cautious when its market impact is still unclear. However, avoiding issues due to uncertainty or endlessly delaying action is not the best choice. The transformation of the financial system driven by Blockchain has already begun, and leaders are learning quickly and accelerating their development. The only remaining question is when and how other countries will decide to join this wave.

The momentum of change is becoming increasingly clear, and now the puzzle pieces have come together. This is precisely the time to fundamentally deepen our understanding of the Blockchain industry and to seriously think about and take action to adopt it.