The President's Working Group on Digital Assets Markets put out a gigantic document yesterday, digging into all the ways that policy could evolve to catch up with the digital asset industry.

Why it matters: The breadth of the recommendations illuminates how behind the U.S. is on grappling with how far-reaching blockchain technology already is.

• The report includes recommendations for everything from securities and commodities regulation, to banking, taxation, countering illicit finance, payments, insurance and cybersecurity.

What's inside: The report goes into enormous detail on all kinds of subjects, including an explanation up front on basic concepts in the blockchain technology stack.

• Big picture, the report points various agencies in directions the White House believes would enable policy where the industry could grow without enabling bad actors to take advantage of regular people.

Reality check: There are a lot of balls in the air here.

• At the end of the report, it restates all the recommendations found throughout in one place for easy perusal. That alone runs 20 pages.

My thought bubble: One can't help but come away from the report wondering why so many of these issues have been neglected until now, but also without worrying that mistakes might be made if policymakers move on so many fronts so quickly.

• For example, Coin Center, which focuses on the freedom to write code and digital privacy, put out a small thread of critiques of the report — places where the group's chief worries tinkering could go awry.

Zoom in: The president's working group argues, in a section of recommendations labeled "Long Term Considerations," that it makes sense to authorize trading venues to unify roles traditionally performed by several firms.

• "Combining exchange and broker services allows for economies of scale and reduces operational complexity by permitting straight-through processing of customer orders with the same technology stack," the report argues.
• The prior administration was consistently critical of such arrangements, which have long been disallowed in traditional trading.

What they're saying: "A rational regulatory framework for digital assets is the best way to catalyze American innovation, protect investors from fraud, and keep our capital markets the envy of the world," SEC chair Paul Atkins said in a statement after the report's release.

What we're watching: GENIUS and CLARITY — the stablecoin legislation that passed and the market structure bill that's up next.

• On GENIUS, the White House urges banking regulators to work quickly so the U.S. can start approving new stablecoins. (See below 👇)
• On CLARITY, the report praises the work so far, though it offers recommendations for improving it, almost as if it's implicitly endorsing it as the vehicle to get through to final passage.

The bottom line: The Trump administration's approach to crypto policy has been head-spinning since he returned to office, and it doesn't appear to be slowing down.

"Start your companies here. Launch your protocols here. And hire your workers here. You'll be glad you did."

The GENIUS Act, the law signed by President Trump to authorize the issuance and use of payment stablecoins in the United States, is not yet effective.

Why it matters: That means there's not a way for a financial institution to put in an application with the Fed to offer a stablecoin.

• Which is why we haven't seen announcements for new stablecoins from big companies.

Between the lines: "The statute creates the framework, and then the rules, the regulations that are implemented under that statute, help drive that framework and create the outer bounds," Jason Cabral, a partner at law firm Gibson Dunn with a focus on its fintech and digital assets practice, tells Axios.

• At a basic level, the rules will define the process for applying to be a stablecoin issuer.
• Is it a form on the website, or do they need to send a letter? What does it need to say? What do they need to show? All of that should be detailed in rules.

What we're watching: The law will become effective one way or another 18 months after the president signed it.

• However, it could go into effect faster — 120 days after the relevant regulators have promulgated the required regulations.

Reality check: Publishing regulations isn't instant.

• At a minimum, there's a notice and comment period following a draft, typically of 60 days. Then, the agencies review comments and amend.
• Cabral noted that public comment periods for new rules have a way of surfacing surprises for policymakers.
• So even if banking regulators publish draft rules on Monday, realistically, it still looks like six months at least until the rules are live.

The bottom line: "The final regulatory framework for U.S. payment stablecoin issuers is a ways away," Cody Carbone, executive director at the Digital Chamber, tells Axios.

Worthy of your time: Gibson Dunn wrote a detailed client alert about GENIUS.

👜 In-kind redemptions of crypto to ETFs have been approved, which means an investor could trade some bitcoin, for example, for an equivalent amount of a spot bitcoin ETF. (SEC)

🦑 Kraken, the U.S. exchange that reaches much of Europe, is reportedly looking at a $15 billion valuation when it IPOs. (The Information)

⚖️ Stable, another layer-1 focused on stablecoins, has raised $28 million to advance adoption of Tether's USDT. (The Block)

🌪️ Privacy was a big theme in the closing arguments for the trial of one of the Tornado Cash developers, Roman Storm, in Manhattan. (DL News)

🤺 Meanwhile, in a similar case, founders of the Samourai Wallet mixing service pled guilty to one charge: conspiracy to operate an unlicensed money transmitter. (Decrypt)

It must be strange times at the Commodities Futures Trading Commission, the smaller of the country's two regulators of financial trading (alongside the SEC).

State of play: The two commissioners helming the agency now (there should be five) have both stated their plan to leave.

• Brian Quintenz, a former commissioner, has been nominated to take over, but the White House asked the Senate ag committee to hold off on voting his nomination to the floor of the Senate for final confirmation, committee staff told Axios earlier this week.

The latest: Politico reports the hesitancy might have been driven by the founders of the crypto exchange Gemini, the Winklevoss brothers, who have been ardent supporters of President Trump. The two reportedly don't believe Quintenz is the right guy.

What we're watching: What happens when a new chair finally gets confirmed.

• Said another way: Can the CFTC operate with only one commissioner?

Short answer: Yes.

• The establishing statute makes clear that absences don't impair remaining commissioners' ability to function, Cody Carbone, executive director of the Digital Chamber, tells Axios.

Yes, but: "We would be supportive of a full commission. I think it gives more weight," Carbone said, noting that in the prior Trump administration, they had a full complement of commissioners.

• The White House might have reason to keep some empty commission seats. They could help the administration make deals, Carbone pointed out.
• For example, the minority party is meant to be represented on the commission. At some point, the White House might be able to offer to make nominations for those spots in exchange for something else it wants Democrats to bend on.

The bottom line: It will be weird if there's only one CFTC commissioner. But it can still operate.