This week in federal digital asset policy, all eyes are on the White House as the President’s Working Group on Digital Assets 180-day report is expected to be released as a comprehensive set of regulatory recommendations and legislative proposals to advance digital asset and blockchain policy, as required under the January 23, 2025 Executive Order on Strengthening American Leadership in Digital Financial Technology. Watch this space for my analysis.

Last week, in the Senate, Banking Committee Chair Tim Scott (R-SC), Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY), and Senators Bill Hagerty (R-TN) and Bernie Moreno (R-OH) released their market structure discussion draft and an RFI for stakeholders to provide insight into a broad range of related questions. The House passed the Financial Technology Protection Act to establish a working group on terrorist and illicit use of digital assets.

Also last week, the Senate Agriculture Committee was scheduled to vote on the confirmation of Brian Quintenz to lead the CFTC. The Committee has a one-vote Republican majority, and the Quintenz vote is expected to fall along party lines. Last week, one Republican Senator’s flight was delayed arriving into DC, therefore, the vote was postponed.

Read more below

Congress

Hearings

• Last week
  • On July 22, the House Homeland Security Cybersecurity and Infrastructure Protection Subcommittee will hold a hearing on Fully Operational: Stuxnet 15 Years Later and the Evolution of Cyber Threats to Critical Infrastructure.
• This week
  • On July 28, the Senate Agriculture, Nutrition and Forestry Committee announced a markup to vote on the nomination of Brian Quintenz to be chairman and commissioner of the Commodity Futures Trading Commission. (Update: The confirmation vote for Brian Quintenz was postponed.)

Legislation

• Senate Banking Committee Chair Tim Scott (R-SC), Senate Banking Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY), and Senators Bill Hagerty (R-TN) and Bernie Moreno (R-OH) released an initial discussion draft of digital asset market structure legislation covering issues under the Banking Committee’s jurisdiction. The draft is intended to “build on the strong foundation for digital asset legislation established by the CLARITY Act” and is “aimed at strengthening concepts established in the CLARITY Act and expanding on those ideas to further encourage innovation and regulatory clarity for digital assets.” (Discussion draft)

• The Senators also issued a Request for Information (RFI) for stakeholders to submit feedback on the draft and provide insight into a broad range of related questions, including investor protection, preemption, trading venues and market infrastructure, banking, custody, and illicit finance. Responses are due by August 5. (RFI)

• The Financial Technology Protection Act, sponsored by Rep. Zach Nunn (R-IA) passed the House under suspension. The bill would establish a working group to study and report on terrorist and illicit use of digital assets and other related emerging technologies and develop proposals to improve anti-money laundering and counterterrorist financing efforts. (Text)

• The Stop Agency Fiat Enforcement of Guidance (SAFE Guidance) Act, sponsored by Rep. Dan Meuser (R-PA), passed out of the House Financial Services Committee. The SAFE Guidance Act would require financial regulatory agencies to include a disclaimer on regulatory guidance stating it does not carry the force of law and that noncompliance does not constitute a legal violation. The legislation is intended to prevent regulators from using informal guidance to coerce banks into blacklisting lawful industries. (Text)

• Sens. Amy Klobuchar (D-MN) and Bernie Moreno (R-OH) introduced a bill to prevent the theft of catalytic converters and other precious metal car parts, which includes a provision making it unlawful to sell or purchase a catalytic converter for cash or a digital asset. (Text)

• Rep. Max Miller (R-OH) released a framework for his digital asset tax proposal, including creating a new de minimis exemption for small crypto transactions; adding digital assets to wash sale rules; allowing digital asset traders to opt for mark-to-market accounting; clarifying the tax timing and character of staking and mining rewards; codifying the tax treatment of airdrops and hard forks; allowing digital assets to be held in qualified retirement plans; and clarifying the tax treatment of lending platforms and liquidity pools. (Framework)

Publications and Events

• Senate Banking Chair Tim Scott (R-SC) and Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY) published an op-ed in Cointelegraph entitled, “Crypto entrepreneurs were fleeing America, but we can bring them back.” They conclude, “The digital asset revolution is rewriting the rules of finance, whether or not America participates. We have the ability to be architects of advancement or be bound to the decisions of other countries. The US can continue to be paralyzed by apprehension, or it can remember that the nation was founded on bold and ambitious actions. This is the moment that will shape the US financial system for generations to come — it’s best to not squander it.” (Op-ed)

• Reps. Tom Emmer (R-MN) and Nick Begich (R-AK) published an op-ed in CoinDesk entitled, “The Senate Must Finish the Job on America’s Pro-Crypto Future,” concluding, “The Senate must send the Anti-CBDC Surveillance State Act and the CLARITY Act to President Trump’s desk so that the United States doesn’t just participate in the digital asset revolution, but leads it. This isn’t a Republican issue or a Democratic issue. It’s an American issue. Whether you’re from Minnesota or Alaska, whether you’re 18 or 80—when done right, this technology empowers individuals, strengthens financial sovereignty, and unlocks opportunity for all. It’s the future. And now, we must finish the job.” (Op-ed)

• The New Democrat Coalition Innovation & Technology Working Group, led by Working Group Chair Sam Liccardo (D-CA), AI Task Force Chair Valerie Foushee (D-NC), and Digital Assets Task Force Chair Brittany Pettersen (D-CO), unveiled the New Dem Innovation Agenda, a platform to “spur groundbreaking research, create new businesses and jobs, and help more people achieve the American Dream.” (Agenda)(Press release)

• Sen. Ed Markey (D-MA) and Rep. Steve Cohen (D-TN) hosted a virtual roundtable discussion on “The Data Center Next Door: Hidden Costs and Harms of Artificial Intelligence and Cryptomining” to discuss the effects of rapid data center development on climate and communities. Markey also released a publication detailing stories of people impacted by data centers. (Press release)(Storybook)

Trump Administration

Securities and Exchange Commission (SEC)

• The SEC is soliciting candidates for all five Public Company Accounting Oversight Board (PCAOB) positions, including Chairperson. The PCAOB oversees audits of the financial statements of public companies, brokers, and dealers through registration, standard setting, inspection, and disciplinary programs. (Statement)

Noteworthy Quotes and Events

ADMINISTRATION

Securities and Exchange Commission (SEC)

• SEC Commissioner Hester Peirce delivered remarks on regulatory sandboxes to the City of London Corporation at Guildhall, saying, “Much of my thinking about a potential sandbox has been in connection with crypto. Blockchain technology, given its early stage and potential for transforming the way our financial system and perhaps other systems work, is ripe for experimentation. The SEC’s Crypto Task Force has received written comment on the issue of sandboxes. The topic of fostering experimentation also comes up in some of the Task Force’s meetings with the public. Market participants are looking to experiment with bitcoin and other crypto assets, stablecoins, non-fungible tokens, digital identity solutions, collateral management, and tokenization of securities and assets such as real estate, among other issues. Blockchain allows for increased transparency, enhanced efficiency, lower costs, increased liquidity, and decentralization. In recent years, many use cases for the technology likely remained unexplored in the face of regulatory hostility or died in the labyrinth of regulatory ambiguity before they could achieve commercial success. The unique challenges and opportunities raised by blockchain technology and crypto assets and their borderless nature would lend themselves well to a mechanism for facilitating experiments and could help to identify where and how existing regulations might need to change in response. Because market participants are exploring numerous models, a sandbox for tokenizing securities might make sense. Building in cross-border interoperability will be easier now than later when business models have matured. I head back to the US today with the hope that the Crypto Task Force can collaborate with the FCA in coordination with our domestic colleagues across the government and in the context of the Administration’s broader cooperation with the United Kingdom.” (Remarks)

• SEC Commissioner Caroline Crenshaw issued a statement on the SEC Status Report in the Climate-Related Disclosure Rules Litigation, saying, “The Commission’s Status Report, filed today, states plainly enough that it has no intention of revisiting the Rules at this time. That, however, is where our responsiveness ends. The Status Report goes on to argue that we cannot expound on what the Commission’s future plans might be in the event the rulemaking petitions are denied, because we would be ‘prejudging’ those policy decisions. And, the Status Report explains, any future rulemaking should benefit from a court ruling on our statutory authority.” (Statement)

Treasury Department

• In remarks before the Federal Reserve Capital Conference, Secretary Scott Bessent said, “Some argue that in the past, regulatory weakening occurred when regulators failed to keep pace. And yet, the financial regulators have not, up to now, kept pace with digital assets or comprehended how their regulation by reflex was undermining the community bank model. Post-mortems to recent crises have been more self-serving exercises designed to support longstanding political agendas rather than honest, searching assessments about how to improve the system. Rather than reflexively regulate anything that hits the headlines, we need to instead be more explicit about our vision for the financial system. Defining that vision requires value judgments. And so, it cannot be a purely technocratic exercise. Instead, defining a path forward requires leadership with a broad perspective and coordination across the whole of government. The Treasury Department is perfectly positioned to provide that leadership… To be clear, the bank regulators must continue to carry out their statutory mandates—maintaining safety and soundness, protecting consumers, and mitigating risks to financial stability. Rationalizing and tailoring regulation does not have to amount to regulatory weakening. But in parallel, Treasury will convene interagency consultations to define a strategic policy direction. To that end, Treasury will encourage bank regulators to consider how proposed rules will impact growth… We will be vigilant against debanking of customers based on religious or political views on either side of the aisle. We will reject international standard setting that does not advance America’s interests. We will support innovation both within and outside the financial system. We will drive alignment between our illicit finance program and our national security priorities. And we will ensure the big questions of the day are answered consistent with America’s long-term interests. This includes the regulation of digital assets, the future of housing finance, and financial sector support for the onshoring of US manufacturing. In all these efforts, Treasury’s most important contribution might simply be to reinforce the urgency of reform. To that end, the department will break through policy inertia, settle turf battles, drive consensus, and motivate action to ensure no single regulator holds up reform.” (Remarks)

White House

• Bo Hines, Executive Director of the President’s Working Group on Digital Assets, tweeted, “The President’s Working Group on Digital Assets has completed the 180-day report. It will be released publicly on July 30th. America is now leading the way on digital asset policy.”

CONGRESS

• In her opening statement at a Senate Foreign Relations Committee hearing on Transnational Criminal Organizations, Ranking Member Jeanne Shaheen (D-NH) said, “The United States has had a long, bipartisan tradition of combating drug cartels but despite decades of different approaches and billions in investment, criminal cartels are as strong as ever today. They have expanded beyond drugs to operate illicit, multi-billion-dollar networks across international borders—including our own. They smuggle migrants and illegally mine gold, they run scams and launder profits using cryptocurrencies and they use violence, as the Chairman has said, to terrorize communities, not only across Latin America but across much of the world.”

• Rep. Zach Nunn (R-IA) tweeted, “The House unanimously passed my Financial Technology Protection Act this week—a bipartisan bill to stop terrorists from using crypto to fund attacks. We’re cutting off bad actors without sacrificing innovation or your privacy.”

• Nunn also tweeted, “We laid the groundwork for U.S. crypto leadership last week. Today, we’re making sure that innovation can’t be weaponized by terrorists or foreign adversaries. My bipartisan bill secures our digital future and protects American lives.”

• Rep. Tom Emmer (R-MN) tweeted, “It’s true. The passage of our pro-crypto bills in the House last week was nothing short of historic. And we’re just getting started.”

• Sen. Cynthia Lummis (R-WY) tweeted, “’We released a discussion draft to help give investors and the digital asset industry the certainty they deserve to ensure this vital industry innovates on American soil.’”

• Lummis also tweeted, “Today, SenatorTimScott, berniemoreno, SenatorHagerty and I led our colleagues in releasing the discussion draft for market structure legislation that will serve as the foundation for making the U.S. the crypto capital of the world.”

• Lummis also tweeted, “Comprehensive market structure legislation is the key to making America the crypto capital of the world.”

• Sen. Ted Budd (R-NC) tweeted, “The Senate’s market structure bill would provide the crypto industry with regulatory certainty needed to unlock new investments & innovation. Grateful for the inclusion of my provisions to ensure self-custody of digital assets & address illicit use of financial technologies.”

• House Committee on Agriculture tweeted, “To secure the full promise of stablecoins—and of American crypto innovation more broadly—the Senate must also pass the Digital Asset Market Structure Clarity (CLARITY) Act.”

• Rep. Buddy Carter (R-GA) tweeted, “Nuclear energy is key to powering America’s future. With AI and crypto surging, we need every electron available to lead in these areas.”

• Rep. Tom Emmer (R-MN) tweeted, “The GENIUS Act is a major win for American leadership in digital finance. But, on its own, it’s not enough.”

• Senate Majority Leader John Thune tweeted, “Digital assets are the future, and we must ensure America is at the forefront. Thanks to the work of SenLummis, SenatorHagerty, and SenatorTimScott, the GENIUS Act will help make America the crypto capital of the world.”

What I’m Reading This Week

• The world should follow Trump’s lead on stablecoins, The Economist

• Crypto lobbying skyrockets under Trump; 27 firms file first-ever lobbying forms, Miriam Waldvogel, The Hill

About Zero One Strategies

Zero One Strategies is a boutique government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.

The practice focuses on key areas such as artificial intelligence, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.

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