The five major departments of the US jointly released: A plain language interpretation of the "White House Encryption Policy Report"

The White House has just released the "Encryption Policy Report"; today we will interpret it:

the broader context behind

The Trump administration signed a new executive order (EO 14178) in early 2025, requiring the restructuring of encryption policy and the establishment of a unified strategy.

This report is the result of this command, jointly launched by the Treasury Department, SEC, CFTC, the Federal Reserve, and the White House economic team.

Key content of the report (interpreted in plain language)

1. The United States wants to be the leader in "on-chain finance".

The United States does not want to fall behind and aims to continue being the global leader in the digital finance sector, especially in Bitcoin, stablecoins, and on-chain assets.

What should we do? We need clearer regulations, more freedom for innovation, and greater willingness for capital investment.

2. Stablecoins: Allowed, but under regulation.

As long as you want to issue a stablecoin "pegged to the US dollar", such as USDC or future commercial bank stablecoins, you must:

• Get a license;
• Have sufficient cash reserves;
• Can be redeemed in a timely manner;
• Accept audits;
• Protect consumers;
• Prohibition of "bragging".

This part is somewhat similar to the practices in Hong Kong and the European Union, but it encourages private enterprises to innovate more (the government does not engage in official stablecoins).

3. SEC and CFTC: Stop fighting and clarify what each is responsible for

Now everyone is confused about which coins are under the jurisdiction of the SEC and which are under the CFTC.

The report suggests that Congress should legislate to clarify the boundaries as soon as possible:

• Securities (like stocks) fall under the SEC;
• Commodity types (such as Bitcoin) fall under CFTC;
• Establish a separate licensing mechanism for stablecoins, trading platforms, etc.

4. Clearly say "no": The United States will not implement CBDC.

The White House clearly stated: We will not issue a central bank digital dollar (CBDC).

Why? Because:

• Invasion of privacy;
• Give too much power to the government;
• Does not conform to the "spirit of the American free market."

This is the core position of the Republican Party in recent years.

5. Encryption tax and pensions should also be "on the chain".

The report also mentioned:

• The IRS is set to release new guidelines to clarify:
• How do you report taxes;
• How to calculate the money you earn on the chain;
• Which are "income" or "capital gains";
• Employers may consider allowing encryption assets to appear in retirement accounts (401k), but they must be mainstream coins that meet safety standards.

6. Blockchain Infrastructure: Don't rely solely on VCs, there needs to be government investment.

The report suggests using national funds to support the following directions:

• On-chain settlement system;
• Government compliance tools (Regulatory Technology);
• encryption audit;
• Privacy technologies such as zero-knowledge proofs.

There may be a new "on-chain DARPA" or national innovation center.

7. The US reserves Bitcoin? Not explicitly stated, but implied.

The report does not explicitly state that "the US government wants to buy Bitcoin".

But when it comes to "long-term stable Bitcoin policies can strengthen the diversification of national strategic assets," it has led the market to interpret: does the government also want to stock up a bit?

In summary: this report tells us

• The United States will not ban encryption, but will regulate and institutionalize it;
• The government does not engage in CBDC but encourages private stablecoins;
• The Congress needs to pass supporting regulations as soon as possible, otherwise the SEC and CFTC will continue to take action;
• The United States hopes to dominate the global "encryption finance."