Four Pillars: The U.S. Embraces the "encryption Gold Era", How Will South Korea Follow Suit?

The momentum of change is becoming increasingly evident, as the puzzle gradually comes together, now is the key moment to gain a deeper understanding of the Blockchain industry.

Written by: Heechang Four Pillars

Compiled by: Shenchao TechFlow

Key Points

The 14178th Executive Order Task Force released a 166-page report today outlining how the United States is leading the Blockchain industry and embracing the "Crypto Golden Age."

The core content of the report can be summarized into four key points: (i) establishing a unified classification framework for the digital asset market; (ii) the interconnection between the banking industry and the Blockchain industry; (iii) accelerating the adoption of stablecoins; (iv) formulating guidelines for illegal financial activities and taxation.

In the real world, the momentum for change is becoming increasingly evident. The collaboration between traditional financial institutions (such as JPMorgan Chase) and blockchain-based platforms (such as Coinbase and Robinhood) is demonstrating an important trend towards practical financial innovation.

Although countries like the United States are at the forefront in this field, South Korea should also take more action and maintain an open attitude—essentially saying, "Let’s seriously study and try to understand all of this." Only by starting to understand now can we avoid being left behind in the wave of rapid change.

1. Those who recognize the trend of Blockchain will be the first to act

In the United States, the government is actively recognizing the potential of blockchain and digital assets and is making significant progress. On January 23, 2025, President Donald Trump issued Executive Order 14178, "Strengthening America's Leadership in Digital Financial Technologies," which established clear regulatory guidelines and encouraged innovation in the sector. According to this order, the Executive Order 14178 working group released a 166-page report today outlining how the United States can lead the blockchain industry and embrace the "Crypto Golden Age."

The report reviews the long-standing tradition of technological innovation in the United States and assesses how Blockchain and digital assets (cryptocurrencies) have the potential to fundamentally change the financial system and asset ownership structure. The report also points out that overly restrictive measures, such as the previous government's so-called "Operation Choke Point 2.0," have excluded legitimate and compliant crypto companies from the banking system. The report suggests that future governments should actively support business activities related to these innovative technologies rather than suppress them.

The report embodies the spirit of Executive Order 14178, emphasizing that U.S. regulators should promote innovation through clear and consistent rules to attract cryptocurrency companies to operate domestically. The report urges agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to collaborate in establishing clear standards and a unified classification framework to eliminate regulatory gaps. At the same time, the report recommends adopting a technology-neutral and flexible regulatory approach in emerging areas such as decentralized finance (DeFi) to ensure that innovation is not hindered by outdated rules.

Source: Strengthening U.S. Leadership in Digital Financial Technology - The White House

At the same time, Hong Kong also responded quickly and followed suit. In June 2023, the Hong Kong government officially established a formal licensing system for virtual asset exchanges. The bill aims to regulate cryptocurrency trading while allowing retail investors to participate to a limited extent. In May 2025, the bill passed Asia's most cutting-edge "Stablecoin Act," which establishes licensing requirements for institutions issuing stablecoins pegged to fiat currencies. It will officially take effect on August 1, 2025. Thanks to this "regulatory and innovation-friendly coexistence" approach, Hong Kong is expected to promote Blockchain development and become one of Asia's leading digital asset centers.

2. Report on Strengthening the United States' Leadership Position in the Digital Financial Technology Sector

Since the Trump administration took office, the sentiment towards cryptocurrency in the United States has changed. A survey conducted as of June 2025 shows that 72% of cryptocurrency investors support President Trump's related policies, and more than one-fifth of Americans now hold some form of cryptocurrency. Among these investors, 64% stated that the government's pro-crypto stance makes them more inclined to invest in cryptocurrency than before. This optimistic sentiment is also spreading to institutional investors: a poll shows that 83% of institutional investors plan to increase their allocation to digital assets in 2025.

The data indicates that a more favorable regulatory environment is injecting new vitality into the cryptocurrency industry. Under the government's slogan of "supporting responsible innovation and growth," the report repeatedly emphasizes that by implementing friendly cryptocurrency policies and establishing a clear regulatory environment, the United States is expected to seize a leading position in the upcoming Blockchain revolution.

The core content of the report can be summarized into four main points. Let us explore them in depth one by one.

2.1 Establishing a Unified Classification Framework for Digital Asset Markets

This section discusses the legal and regulatory classification of digital assets, as well as methods to improve market structure. Currently, there is no clear standard in the United States to define whether a certain cryptocurrency is a security or a commodity. This ambiguity has led to jurisdictional conflicts between regulatory agencies (such as the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC)) and has left gaps of regulatory overlap. The report points out that "the lack of a comprehensive classification framework has resulted in a chaotic variety of interpretations, making good-faith participants attempting to comply with regulations feel as if they are walking through a minefield," highlighting the urgent need for a clear and unified classification system for digital assets.

For example, digital tokens used for fundraising may be seen as securities (investment contracts) when sold, but once they are sufficiently decentralized, some believe they should no longer be considered securities. Currently, there is no standard that can account for this dynamic change throughout the project lifecycle. This creates significant uncertainty for projects, as they find it difficult to predict which laws will apply over time.

In this context, the report endorses the proposed "Digital Asset Market Clarity Act" (CLARITY Act). The act was passed in 2025 with bipartisan support in the U.S. House of Representatives. The CLARITY Act categorizes digital assets into security tokens and non-security (commodity) tokens, clearly granting the U.S. Securities and Exchange Commission (SEC) jurisdiction over the former, and the U.S. Commodity Futures Trading Commission (CFTC) jurisdiction over the latter and the cryptocurrency spot market. The act also includes provisions protecting the rights of Americans to self-custody assets and engage in peer-to-peer transactions, and recognizes the value of decentralized governance and decentralized finance (DeFi).

The report points out that the CLARITY Act will "lay a solid foundation for the structure of the U.S. digital asset market," but also suggests some improvements in the legislative process. First, the report emphasizes the need to clarify the legal status of fully decentralized protocols. The report provides lawmakers with several factors to consider, such as:

• Does the given software protocol exercise any actual "control" over user assets;
• Can the protocol be changed or upgraded technically;
• Is there a centralized operator or governance structure;
• And whether the current regulatory obligations can be technically enforced.

In light of these standards, the report suggests that truly decentralized projects cannot be regulated like traditional intermediaries, and therefore a new approach is needed. Regulators should develop a flexible framework that achieves policy goals while avoiding stifling innovation.

The report hopes that the "Clarity Act" can provide a foundation in this regard and urges Congress to swiftly enact the legislation. The report also suggests that, before the bill is officially implemented, regulatory agencies should immediately take measures using their existing authority to provide greater regulatory transparency for market participants.

2.2 The banking industry and the blockchain industry should be interconnected.

This section explores the integration of the banking industry with the cryptocurrency sector and offers policy recommendations on how U.S. banks can expand their participation in digital assets under prudent regulation. The report mentions the previous administration's move to cut off banking services to cryptocurrency companies—referred to as "Operation Choke Point 2.0"—and criticizes it as a misguided attempt to stifle development by pushing legitimate industries away from the banking system.

The report points out that this top-down pressure has led many American cryptocurrency companies to face issues such as bank accounts being closed, resulting in consumer harm and unexpected side effects such as the growth of unregulated "shadow" markets.

The report emphasizes that banks can significantly improve efficiency and reduce costs by utilizing Blockchain technology. For example, integrating distributed ledgers into payment and settlement systems can enable real-time payment and atomic settlement of transactions around the clock, thereby eliminating the limitations of business hours and reducing costs associated with central clearinghouses. Some large banks are already moving in this direction, testing their own digital dollar tokens or Blockchain platforms for bond settlement.

The recommendations presented in this section of the report include:

• Clarify the permitted cryptocurrency-related activities for banks and restore initiatives such as the Regulatory Innovation Office to provide guidance for banks in this field.
• Enhance the transparency of bank license approval and Federal Reserve account application processes to facilitate the entry of new businesses while avoiding unfairly preventing existing banks from servicing crypto clients;
• Combine bank capital requirements with actual risks and establish regulatory guidance for new risk exposures such as tokenized assets.

2.3 Stablecoins should be regarded as innovative digital tools and actively promoted.

This section focuses on stablecoins in the context of digital payment innovation and how they reinforce the dominance of the US dollar. Stablecoins are a type of crypto asset with stable value, designed to maintain a 1:1 peg with fiat currencies like the US dollar. Due to their low price volatility, they effectively serve as digital cash within the crypto ecosystem.

The report assesses that the widespread use of stablecoins pegged to the US dollar could modernize payment infrastructure and help the United States escape its increasingly aging traditional payment networks. For example, using stablecoins for international remittances or securities settlements can achieve near-instant processing without intermediary banks and significantly reduce costs. This will also enhance the international influence of the US dollar. Currently, dollar-based stablecoins account for a significant share of global cryptocurrency trading volume, with a circulation scale reaching hundreds of billions of dollars. The report emphasizes that to lead this trend, the United States must establish a clear federal regulatory framework for stablecoins.

In this context, the report highlights the "Guiding and Establishing the United States Stablecoin National Innovation Act" abbreviated as the "GENIUS Act" passed by the U.S. Congress this year. The GENIUS Act (i) establishes a system of privately issued dollar stablecoin issuance institutions approved and regulated by the Federal Reserve; (ii) it prohibits the Federal Reserve from creating a Central Bank Digital Currency (CBDC), thus clearly favoring private sector-led digital dollar innovation. The report praises the GENIUS Act for "integrating a framework conducive to innovation into federal law" and strongly urges the Treasury Department and other relevant agencies to implement the act seriously and promptly.

The report also points out that addressing tax issues is crucial while establishing stablecoin regulations. According to current U.S. tax laws, the definition of stablecoins is not clear, and their tax treatment may vary depending on whether they are considered currency or property. The report indicates that this ambiguity creates a burden for participants, and therefore, once the federal stablecoin regulatory framework is in place, tax laws should be updated to clarify the classification of stablecoins, thereby eliminating uncertainty.

The core message of this section can be summarized as: "Actively promote stablecoins as a means of innovation for the digital dollar, and firmly reject central bank digital currencies (CBDCs) as they threaten the freedoms and financial stability of the United States." Regarding stablecoins, the report urges strict enforcement of the newly enacted GENIUS Act and suggests that additional legislation be introduced when necessary to strengthen privacy protections and consumer safeguards.

The report also emphasizes that the United States should lead the establishment of global standards for stablecoins internationally and promote innovation in cross-border payments.

2.4 Guidelines must be established for illegal financial activities and taxation.

This section discusses the illegal financial risks associated with cryptocurrencies (such as money laundering, terrorist financing, tax evasion, etc.) and the countermeasures. The report begins by stating that "to embrace innovation while ensuring national security, we must modernize anti-money laundering (AML) regulations" and analyzes the vulnerabilities in the current system.

Due to the anonymity, borderless nature, and real-time execution of cryptocurrency trading, the report acknowledges that enforcing laws established for traditional banking, such as the Bank Secrecy Act (BSA) or the Travel Rule, faces challenges. For instance, criminals may repeatedly exchange or split funds using decentralized exchanges or mixing services, making transactions difficult to trace. The report lists specific cases—such as the North Korean hacking group abusing decentralized finance (DeFi) in 2022 and ransomware attackers demanding cryptocurrency payments—to illustrate that current anti-money laundering (AML) mechanisms need to be updated to address these new strategies.

At the same time, the report emphasizes multiple times that anti-money laundering (AML) and counter-terrorism financing (CFT) enforcement must not be abused or deviate from the original legal intent. If anti-money laundering regulations (AML) are used for political purposes or to suppress specific industries, it will only undermine public trust in the financial system. Therefore, regulatory agencies themselves should operate under democratic oversight and transparency, clearly stating guidelines to avoid unfair restrictions on legitimate businesses and users.

The last part of this section proposes recommendations to address the ambiguities and uncertainties related to the taxation of digital assets. The report points out that, although the IRS generally classifies cryptocurrencies as property, specific tax guidelines have not yet been established for new activities such as staking, mining, airdrops, or token wrapping. This lack of clarity is causing significant confusion for taxpayers. The report urges the IRS and the Treasury Department to issue clearer and more practical tax guidance and suggests considering a tax exemption policy for small cryptocurrency transactions to prevent users from being penalized for using cryptocurrencies for everyday payments.

3. Let more people better understand cryptocurrency

Source: X (@glxyresearch)

Many countries and companies (the United States is a typical example) are competing to announce and implement blockchain strategies, not just to follow the trend, but because they have anticipated the market development trajectory and prepared in advance. In the United States, companies like Messari, Delphi, Galaxy Research, and rwa.xyz have consistently provided high-quality research to help institutions develop forward-looking strategies for blockchain and digital assets. Protocols like Ondo Finance and Morpho have built secure on-chain financial services, while companies like BitGo and Coinbase provide reliable infrastructure for institutions to invest in crypto assets.

In contrast, South Korea's basic understanding and preparation for the blockchain industry, particularly with regard to stablecoins, remains insufficient. Discussions about stablecoins still focus on the failure of Terra or debates about why stablecoins are unviable, with the debate always revolving around issuance issues rather than practical applications. However, stablecoins have demonstrated various application scenarios globally, and efforts should not only focus on issuance but also on developing products that integrate them into daily life. To achieve this goal, policy support and a clear regulatory environment are first required.

As the blockchain industry (especially stablecoins) is still in its early stages, it is difficult to list specific success stories to prove the validity of its applications. However, because of this, it is crucial to maintain an open attitude – essentially saying, "let's seriously examine and try to understand it". Only by starting to understand it now can we keep up with the rapid changes.

4. The puzzle gradually comes together, and the future begins to take shape.

The boundaries between the financial and blockchain sectors are becoming blurred, and leading companies from both sides are starting to collaborate. A typical example is the partnership announced between JPMorgan Chase, the largest bank in the United States, and the cryptocurrency exchange Coinbase. JPMorgan Chase will allow its credit card customers to convert reward points into USDC on Coinbase's Base blockchain and connect customer accounts directly to the Coinbase platform, enabling seamless and almost instant exchanges between fiat currency and cryptocurrency. This is a milestone integration between traditional banks and cryptocurrency exchanges, indicating that major financial institutions now regard digital assets as a legitimate component of their financial services.

This trend is not limited to banks and exchanges. Coinbase has also partnered with Morpho to expand into the on-chain financial space, specifically the decentralized finance (DeFi) sector. Through this collaboration, users can deposit their held Bitcoin via the Coinbase app and use it as collateral to borrow USDC for everyday expenses. This demonstrates a strategy for asset utilization that traditional finance cannot achieve. In fact, investors can continue to hold Bitcoin while managing their daily cash flow, indicating that blockchain-based financial innovation has entered a viable phase.

New developments are also emerging in the field of financial technology. The popular trading platform Robinhood is launching its own Layer-2 Blockchain to provide infrastructure for the on-chain issuance and trading of listed and private stocks. The Robinhood Chain will eventually connect to the Ethereum ecosystem. This means that financial technology platforms can not only provide brokerage services but also leverage their own blockchain to handle a broader range of on-chain financial assets. In short, a new trend is taking shape: traditional financial technology platforms are adopting blockchain technology to achieve asset ownership and liquidity that were previously unattainable.

Unfortunately, compared to these global financial innovation cases, South Korea is still lagging behind. There has not yet been any substantial cooperation or integration initiatives between South Korean banks, exchanges, fintech startups, and DeFi projects. Perhaps South Korean institutions need to at least attempt to use private Blockchain platforms (such as JPMorgan's private Kinexis network) to accumulate practical experience. Major countries and financial institutions around the world have already started to outline a Blockchain-driven financial blueprint and are actively engaging in cooperation. If South Korea continues to stagnate, domestic discussions will inevitably remain at a theoretical level and cannot be put into practice.

Of course, implementing Blockchain is not an easy task, and it is understandable to act cautiously when its market impact is still unclear. However, avoiding issues or indefinitely delaying action due to uncertainty is not the best choice. The transformation of the financial system driven by Blockchain has already begun, and the pioneers are quickly learning and accelerating their progress. It is now up to others to decide when and how to join this wave.

The momentum of change is becoming increasingly evident. As the pieces of the puzzle gradually come together, now is a critical moment to gain a deeper understanding of the Blockchain industry—also the best time to seriously consider and take action to adopt Blockchain technology.