White House, SEC provide roadmaps for advancing crypto policy agenda

Topline

• White House releases crypto policy recommendations

• SEC outlines crypto regulatory overhaul

• Create more owners: Employee ownership efforts gaining momentum

• House introduces SBIR/STTR reauthorization as September deadline looms

• Quick hits

Programming note: As Congress breaks for recess, so will the Carta Policy Weekly. We will continue to share more tailored content through our social channels—Holli Heiles Pandol & Anthony Cimino—and are always here to answer questions, talk policy, or just listen to interesting ideas. See you in September. 

White House releases crypto policy recommendations

The President’s Working Group on Digital Assets Markets released its landmark report outlining policy recommendations to bolster growth and innovation in the digital assets industry and ensure the U.S. remains the global leader in this space. The comprehensive set of recommendations covers a wide range of issues—from securities regulation to banking to tax and illicit finance—and details how both the regulatory agencies and Congress can address them. 

The recommendations:

• Congress: Build on CLARITY Act and pass market structure legislation that eliminates gaps in regulatory oversight and provides CFTC the authority to oversee spot markets for digital assets that aren’t securities

• Markets: Use existing authorities to enable trading of digital assets by providing clarity around registration, custody, trading, and recordkeeping, and allow innovative products to reach consumers through the use of tools like safe harbors and regulatory sandboxes

• Banking: Clarify permissible bank activities in custody, tokenization, stablecoin issuance, and blockchain use; promote transparency in the process to obtain bank charters or Fed master accounts; and ensure bank capital rules are aligned with actual risks associated with digital assets

• Stabecoins: Expeditiously implement GENIUS Act regulations to authorize issuance and use of stablecoins and pass legislation to ban central bank digital currency in the U.S.

• Illicit finance: Modernize anti-money laundering/countering the financing of terrorism (AML/CFT) rules and clarify those obligations for actors in the decentralized finance ecosystem

• Tax: Create tax treatments for new digital asset classes similar to those for securities and commodities, and provide guidance on topics related to mining,staking, and de minimis receipts

Why it matters: The U.S. government is all in on crypto. For the first time, the report outlines a cohesive national crypto strategy, resetting the tone from skepticism to one that embraces mainstream adoption, positioning the U.S. to lead the global digital finance race. Both Congress and the federal financial regulators will continue to devote significant resources to implementing the comprehensive list of recommendations to integrate digital assets into mainstream finance. This would provide legal certainty that would help traditional institutions like banks and asset managers participate—but could potentially disrupt their roles in the broader ecosystem, too. 

SEC outlines crypto regulatory overhaul

Following the release of the digital asset report, SEC Chairman Paul Atkins outlined the SEC’s comprehensive strategy—Project Crypto— to realign securities regulation with digital innovation and enable financial markets to move on-chain. Key areas of focus include:

• Token classification: Providing clear guidelines to determine whether a digital asset is a security, and developing disclosures, exemptions, and safe harbors for crypto asset securities

• Tokenization: Working with and providing relief to firms seeking to distribute and trade tokenized securities (the SEC approved in-kind creations and redemptions for crypto ETFs this week) 

• Custody: Preserving the right to use self-custodial digital wallets and modernizing custody requirements for registered intermediaries

• “Super-apps”: Developing a framework that allows non-security crypto assets and crypto asset securities to trade side by side, enabling securities intermediaries to offer a broad range of products and services under one roof with a single license 

• Market intermediation: Updating rules to permit decentralized finance and on-chain software systems 

• Innovation exemption: Allowing innovators to go to market with new business models and services that do not fit contours of existing securities laws

Why it matters: Project Crypto signals a fundamental shift in how the SEC approaches digital asset regulation, moving from an enforcement-first posture to a rules-based framework designed to integrate crypto into the broader U.S. financial system. By providing clear token classification, modernized custody rules, and regulatory pathways for DeFi and tokenized markets, the SEC is laying the groundwork for mainstream adoption of blockchain-based finance. These workstreams will dominate much of the agency’s focus for the foreseeable future.

Create More Owners

Carta’s founding mission remains central to our work—broadening ownership to more investors, more communities, more employees. Congress is pushing this mission, driving legislation that would:

• Improve tax treatment: Lower the corporate tax rate by 3% for large companies that distribute at least 5% of their stock to the lowest-paid 80% of employees

• Lending for ESOP transactions: Establish a $500B loan fund to provide financing for employee ownership transitions

• Independent valuations: Establish a safe harbor relying on a certified appraiser when valuing ESOP

• Lowering barriers: Provide technical assistance for S-corps transitioning to an employee ownership model and ensure they retain their SBA certification

There is more work to do on all these bills, but the proposals are worth noting, as momentum on this issue is building. Why does this matter?

• For the companies: Employee ownership aligns incentives, lowers turnover, increases company productivity and performance, and provides long-term accountability—which helps companies build and solve ambitious and complex problems. 

• For the employees: Ownership enables employees to participate in the profits they create, which leads to unbounded upside. In employee-owned companies, wages rise faster. But even then, salary is finite. Equity appreciation is uncapped and continues to increase even after an employee departs. Both of these prongs are particularly important as wages—while starting to rise as of late—have remained stagnant for all but the highest earners over the last four decades.

• For the community: Creating an ownership economy can help combat increasing income inequality. Broadening ownership, broadens wealth. Research suggests that if private firms shifted to 30% employee ownership, the bottom 90% of the population would see significant gains in wealth, while only the top 1% would see their share shrink. 

House introduces SBIR/STTR reauthorization as September deadline looms

The House released its version of the INNOVATE Act, which reauthorizes and reforms the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which provide non-dilutive funding to early-stage companies and both of which are set to expire September 30. Both the House and Senate versions would streamline the award process and cap cumulative annual submissions and lifetime award levels in an effort to broaden the reach to more companies, not just focus it on those that know how to navigate the program. They also seek to limit foreign influence on recipient companies and bolster national security protections. 

What’s next: House and Senate Republican leaders are working to reconcile their differences but time is limited given congressional recess. Democrats are also pushing their own version, which would permanently reauthorize the programs and boost funding. At this point, a short-term, clean extension of the program is most likely while work toward a longer reauthorization continues.   

Ripples on patent fees: In the background, reports circulated this week that the Commerce Department may upend the existing patent fee structure. Patent holders currently pay three fixed maintenance fees at set intervals. The framework under consideration would instead assess a dynamic fee based on 1 to 5% of the estimated value of the patent. This would be a global first and would likely carry significant financial ramifications for some companies, particularly those in the tech space.

Quick hits

• New Trump tariffs. President Trump signed an executive order significantly raising tariffs on most U.S. trading partners. The increased rates, ranging between 15% and 41%, are set to take effect on Aug. 7. Trump also raised tariffs on Canada from 25% to 35% for goods that are not compliant with the U.S.-Mexico-Canada Agreement. 

• Bipartisan effort to promote artificial intelligence in financial services. The bipartisan, bicameral Unleashing AI Innovation in Financial Services Act promotes AI experimentation and innovation by allowing organizations to test emerging technologies in sandbox-like environments—AI Innovation Labs—without the risk of enforcement while maintaining consumer protections and regulatory oversight. 

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