In his latest effort to loosen regulation around digital assets, US president Donald Trump has signed a resolution which frees decentralized crypto exchanges from having to track and report user activity.

The requirement was put in place by the US Internal Revenue Service at the end of former President Biden’s administration due to the decentralized finance (DeFi) nature of digital assets, as reported by CoinDesk. Representative Mike Carey, an Ohio Republican, had led efforts to get rid of the requirement, and his proposals, now termed as the Carey Bill, have finally been signed into law by President Trump.

““The DeFi Broker Rule needlessly hindered American innovation, infringed on the privacy of everyday Americans, and was set to overwhelm the IRS with an overflow of new filings that it doesn’t have the infrastructure to handle during tax season,” Carey said in a statement.

One of the key arguments against the requirement was that it “far exceeded the scope of the Infrastructure Investment and Jobs Act’s (IIJA) instructions to IRS and the Department of the Treasury regarding the establishment of rules for digital asset exchanges.” Representative Carey’s office has said.

US-only stablecoin

As US government efforts to introduce a regulatory framework for digital assets gain pace, tether, one of the world’s most traded cryptocurrencies, has hinted at introducing a US-only stable coin.

According to the FT, Tether bosses have been involved in the current discussions in the US around regulating crypto, and the current administration considers stablecoins an important instrument. Despite having around $144 billion worth of tokens in circulation globally, the firm does not accept US-based customers. But chief executive Paolo Ardoino has told the FT this could change once there is more clarity from the US administration around the future of crypto regulation.

The revelation comes at at time the firm is trying hard to improve its image and distance itself from accusations such as being the go-to cryptocurrency for international criminals.

Ardoino was quoted by the FT saying: “We are the only ones that on-board the FBI, on-board the US Secret Services. We work directly with the [Department of Justice] and we don’t wait for court orders to act, but we actually have a direct connection with the law enforcement.”

Core principles for crypto legislation

And we stay with the US, where two senior lawmakers have outlined six core principles which they believe should form the basis of any future regulatory framework for digital assets in the country.

Writing for CoinDesk, the two congressmen have criticized the former Biden administration for a lack of clarity on crypto regulation which, they argue, has turned investors and innovators away from the US and to other destinations.

The six core principles they have highlighted include:

• First, any future legislation should promote and not discourage innovation. The opinion piece criticizes the Biden administration for doing the opposite on this particular point.
• Second, legislation should address the key question of whether specific digital assets qualify as securities or non-securities. Lawmakers have called for a clear classification of assets.
• Third, the issuance of new digital assets and their sale should come under the jurisdiction of the SEC. Investors’ protection should be ensured, and developers should disclose all relevant information that investors need.
• Fourth, there should be similar regulatory requirements for centralized, custodial exchanges and intermediaries facilitating transactions with non-security digital assets, with the Commodity Futures Trading Commission (CFTC) having the authority to impose requirements on both.
• Fifth, customer funds should be kept separate with qualified custodians, and should be protected during bankruptcy.
• Sixth, the decentralized nature of digital assets should be protected by legislation and they should not be exposed to requirements which are typical of centralized finance. Also, individuals must have the right to self-custody their digital assets.

We have covered the story in more detail.

New EU crypto rules

Away from the US, regulators in the EU have announced a new set of stringent rules and requirements around digital assets including crypto. The new rules are aimed at discouraging insurers from holding digital assets, and those doing so will face tough penalties, as reported by the FT.

The announcement comes at a time when other destinations, including the US and the UK, are working hard to establish regulatory frameworks and incorporate crypto further into their financial systems and markets.

But it seems like the EU is still wary of the unpredictable and unstable nature of digital assets, hence going for a more precautionary approach in its regulation.

The new recommendations by the European Insurance and Occupational Pensions Authority (EIOPA) include that “a one-to-one capital requirement be applied consistently to all crypto holdings of EU (re)insurers.”

The agency has argued in an article that: “Crypto assets are a relatively new assets class in finance and their regulatory treatment is still evolving.”

EIOPA has warned that “empirical analysis of historical crypto asset data suggests that current capital weight options – such as the 80% stress level applied to intangible assets – in fact underestimates the risks associated with crypto exposures.”

Europeans open to crypto

Despite stringent regulation around the digital assets industry, latest studies reveal that awareness and adoption of crypto continues to increase across Europe.

In its latest annual study into crypto assets and the Web3 industry in France and Europe, ADAN has revealed that 10% of French people currently hold crypto, and another 33% plan to acquire digital assets this year.

“The sector is gaining legitimacy, particularly due to the rise of new access channels like Revolut, which has become the second-largest acquisition platform (24% of users),” the study has found.

According to the study, current crypto asset adoption rates in other countries are: United Kingdom (19%), the Netherlands (17%), and Belgium (17%).

Laurent Ovion, President of ADAN said: “While the adoption of crypto assets is stabilizing after several years of growth, public interest remains strong and Web3 use cases continue to develop.”