The primary expense that must be paid by a blockchain is that of security. The blockchain must pay miners or validators to economically participate in its consensus protocol, whether proof of work or proof of stake, and this inevitably incurs some cost. There are two ways to pay for this cost: inflation and transaction fees. Currently, Bitcoin and Ethereum, the two leading proof-of-work blockchains, both use high levels of inflation to pay for security; the Bitcoin community presently intends to decrease the inflation over time and eventually switch to a transaction-fee-only model. NXT, one of the larger proof-of-stake blockchains, pays for security entirely with transaction fees, and in fact has negative net inflation because some on-chain features require destroying NXT; the current supply is 0.1% lower than the original 1 billion. The question is, how much “defense spending” is required for a blockchain to be secure, and given a particular amount of spending required, which is the best way to get it?

Absolute size of PoW / PoS Rewards

To provide some empirical data for the next section, let us consider bitcoin as an example. Over the past few years, bitcoin transaction revenues have been in the range of 15-75 BTC per day, or about 0.35 BTC per block (or 1.4% of current mining rewards), and this has remained true throughout large changes in the level of adoption.

It is not difficult to see why this may be the case: increases in BTC adoption will increase the total sum of USD-denominated fees (whether through transaction volume increases or average fee increases or a combination of both) but also decrease the amount of BTC in a given quantity of USD, so it is entirely reasonable that, absent exogenous block size crises, changes in adoption that do not come with changes to underlying market structure will simply leave the BTC-denominanted total transaction fee levels largely unchanged.

In 25 years, bitcoin mining rewards are going to almost disappear; hence, the 0.35 BTC per block will be the only source of revenue. At today’s prices, this works out to ~$35000 per day or $10 million per year. We can estimate the cost of buying up enough mining power to take over the network given these conditions in several ways.

First, we can look at the network hashpower and the cost of consumer miners. The network currently has 1471723 TH/s of hashpower, the best available miners cost $100 per 1 TH/s, so buying enough of these miners to overwhelm the existing network will cost ~$147 million USD. If we take away mining rewards, revenues will decrease by a factor of 36, so the mining ecosystem will in the long term decrease by a factor of 36, so the cost becomes $4.08m USD. Note that this is if you are buying new miners; if you are willing to buy existing miners, then you need to only buy half the network, knocking the cost of what Tim Swanson calls a “Maginot line” attack all the way down to ~$2.04m USD.

However, professional mining farms are likely able to obtain miners at substantially cheaper than consumer costs. We can look at the available information on Bitfury’s $100 million data center, which is expected to consume 100 MW of electricity. The farm will contain a combination of 28nm and 16nm chips; the 16nm chips “achieve energy efficiency of 0.06 joules per gigahash”. Since we care about determining the cost for a new attacker, we will assume that an attacker replicating Bitfury’s feat will use 16nm chips exclusively. 100 MW at 0.06 joules per gigahash (physics reminder: 1 joule per GH = 1 watt per GH/sec) is 1.67 billion GH/s, or 1.67M TH/s. Hence, Bitfury was able to do $60 per TH/s, a statistic that would give a $2.45m cost of attacking “from outside” and a $1.22m cost from buying existing miners.

Hence, we have $1.2-4m as an approximate estimate for a “Maginot line attack” against a fee-only network. Cheaper attacks (eg. “renting” hardware) may cost 10-100 times less. If the bitcoin ecosystem increases in size, then this value will of course increase, but then the size of transactions conducted over the network will also increase and so the incentive to attack will also increase. Is this level of security enough in order to secure the blockchain against attacks? It is hard to tell; it is my own opinion that the risk is very high that this is insufficient and so it is dangerous for a blockchain protocol to commit itself to this level of security with no way of increasing it (note that Ethereum’s current proof of work carries no fundamental improvements to Bitcoin’s in this regard; this is why I personally have not been willing to commit to an ether supply cap at this point).

In a proof of stake context, security is likely to be substantially higher. To see why, note that the ratio between the computed cost of taking over the bitcoin network, and the annual mining revenue ($932 million at current BTC price levels), is extremely low: the capital costs are only worth about two months of revenue. In a proof of stake context, the cost of deposits should be equal to the infinite future discounted sum of the returns; that is, assuming a risk-adjusted discount rate of, say, 5%, the capital costs are worth 20 years of revenue. Note that if ASIC miners consumed no electricity and lasted forever, the equilibrium in proof of work would be the same (with the exception that proof of work would still be more “wasteful” than proof of stake in an economic sense, and recovery from successful attacks would be harder); however, because electricity and especially hardware depreciation do make up the great bulk of the costs of ASIC mining, the large discrepancy exists. Hence, with proof of stake, we may see an attack cost of $20-100 million for a network the size of Bitcoin; hence it is more likely that the level of security will be enough, but still not certain.

The Ramsey Problem

Let us suppose that relying purely on current transaction fees is insufficient to secure the network. There are two ways to raise more revenue. One is to increase transaction fees by constraining supply to below efficient levels, and the other is to add inflation. How do we choose which one, or what proportions of both, to use?

Fortunately, there is an established rule in economics for solving the problem in a way that minimizes economic deadweight loss, known as Ramsey pricing. Ramsey’s original scenario was as follows. Suppose that there is a regulated monopoly that has the requirement to achieve a particular profit target (possibly to break even after paying fixed costs), and competitive pricing (ie. where the price of a good was set to equal the marginal cost of producing one more unit of the good) would not be sufficient to achieve that requirement. The Ramsey rule says that markup should be inversely proportional to demand elasticity, ie. if a 1% increase in price in good A causes a 2% reduction in demand, whereas a 1% increase in price in good B causes a 4% reduction in demand, then the socially optimal thing to do is to have the markup on good A be twice as high as the markup on good B (you may notice that this essentially decreases demand uniformly).

The reason why this kind of balanced approach is taken, rather than just putting the entire markup on the most inelastic part of the demand, is that the harm from charging prices above marginal cost goes up with the square of the markup. Suppose that a given item takes $20 to produce, and you charge $21. There are likely a few people who value the item at somewhere between $20 and $21 (we’ll say average of $20.5), and it is a tragic loss to society that these people will not be able to buy the item even though they would gain more from having it than the seller would lose from giving it up. However, the number of people is small and the net loss (average $0.5) is small. Now, suppose that you charge $30. There are now likely ten times more people with “reserve prices” between $20 and $30, and their average valuation is likely around $25; hence, there are ten times more people who suffer, and the average social loss from each one of them is now $5 instead of $0.5, and so the net social loss is 100x greater. Because of this superlinear growth, taking a little from everyone is less bad than taking a lot from one small group.

Notice how the “deadweight loss” section is a triangle. As you (hopefully) remember from math class, the area of a triangle is width * length / 2, so doubling the dimensions quadruples the area.

In Bitcoin’s case, right now we see that transaction fees are and consistently have been in the neighborhood of ~50 BTC per day, or ~18000 BTC per year, which is ~0.1% of the coin supply. We can estimate as a first approximation that, say, a 2x fee increase would reduce transaction load by 20%. In practice, it seems like bitcoin fees are up ~2x since a year ago and it seems plausible that transaction load is now ~20% stunted compared to what it would be without the fee increase (see this rough projection); these estimates are highly unscientific but they are a decent first approximation.

Now, suppose that 0.5% annual inflation would reduce interest in holding BTC by perhaps 10%, but we’ll conservatively say 25%. If at some point the Bitcoin community decides that it wants to increase security expenditures by ~200,000 BTC per year, then under those estimates, and assuming that current txfees are optimal before taking into account security expenditure considerations, the optimum would be to push up fees by 2.96x and introduce 0.784% annual inflation. Other estimates of these measures would give other results, but in any case the optimal level of both the fee increase and the inflation would be nonzero. I use Bitcoin as an example because it is the one case where we can actually try to observe the effects of growing usage restrained by a fixed cap, but identical arguments apply to Ethereum as well.

Game-Theoretic Attacks

There is also another argument to bolster the case for inflation. This is that relying on transaction fees too much opens up the playing field for a very large and difficult-to-analyze category of game-theoretic attacks. The fundamental cause is simple: if you act in a way that prevents another block from getting into the chain, then you can steal that block’s transactions. Hence there is an incentive for a validator to not just help themselves, but also to hurt others. This is even more direct than selfish-mining attacks, as in the case of selfish mining you hurt a specific validator to the benefit of all other validators, whereas here there are often opportunities for the attacker to benefit exclusively.

In proof of work, one simple attack would be that if you see a block with a high fee, you attempt to mine a sister block containing the same transactions, and then offer a bounty of 1 BTC to the next miner to mine on top of your block, so that subsequent validators have the incentive to include your block and not the original. Of course, the original miner can then follow up by increasing the bounty further, starting a bidding war, and the miner could also pre-empt such attacks by voluntarily giving up most of the fee to the creator of the next block; the end result is hard to predict and it’s not at all clear that it is anywhere close to efficient for the network. In proof of stake, similar attacks are possible.

How to distribute fees?

Even given a particular distribution of revenues from inflation and revenues from transaction fees, there is an additional choice of how the transaction fees are collected. Though most protocols so far have taken one single route, there is actually quite a bit of latitude here. The three primary choices are:

• Fees go to the validator/miner that created the block
• Fees go to the validators equally
• Fees are burned

Arguably, the more salient difference is between the first and the second; the difference between the second and the third can be described as a targeting policy choice, and so we will deal with this issue separately in a later section. The difference between the first two options is this: if the validator that creates a block gets the fees, that validator has an incentive equal to the size of the fees to include as many transactions as possible. If it’s the validators equally, each one has a negligible incentive.

Note that literally redistributing 100% of fees (or, for that matter, any fixed percentage of fees) is infeasible due to “tax evasion” attacks via side-channel payment: instead of adding a transaction fee using the standard mechanism, transaction senders will put a zero or near-zero “official fee” and pay validators directly via other cryptocurrencies (or even PayPal), allowing validators to collect 100% of the revenue. However, we can get what we want by using another trick: determine in protocol a minimum fee that transactions must pay, and have the protocol “confiscate” that portion but let the miners keep the entire excess (alternatively, miners keep all transaction fees but must in turn pay a fee per byte or unit gas to the protocol; this a mathematically equivalent formulation). This removes tax evasion incentives, while still placing a large portion of transaction fee revenue under the control of the protocol, allowing us to keep fee-based issuance without introducing the game-theoretic malicentives of a traditional pure-fee model.

The protocol cannot take all of the transaction fee revenues because the level of fees is very uneven and because it cannot price-discriminate, but it can take a portion large enough that in-protocol mechanisms have enough revenue allocating power to work with to counteract game-theoretic concerns with traditional fee-only security.

One possible algorithm for determining this minimum fee would be a difficulty-like adjustment process that targets a medium-term average gas usage equal to 1/3 of the protocol gas limit, decreasing the minimum fee if average usage is below this value and increasing the minimum fee if average usage is higher.

We can extend this model further to provide other interesting properties. One possibility is that of a flexible gas limit: instead of a hard gas limit that blocks cannot exceed, we have a soft limit G1 and a hard limit G2 (say, G2 = 2 * G1). Suppose that the protocol fee is 20 shannon per gas (in non-Ethereum contexts, substitute other cryptocurrency units and “bytes” or other block resource limits as needed). All transactions up to G1 would have to pay 20 shannon per gas. Above that point, however, fees would increase: at (G2 + G1) / 2, the marginal unit of gas would cost 40 shannon, at (3 * G2 + G1) / 4 it would go up to 80 shannon, and so forth until hitting a limit of infinity at G2. This would give the chain a limited ability to expand capacity to meet sudden spikes in demand, reducing the price shock (a feature that some critics of the concept of a “fee market” may find attractive).

What to Target

Let us suppose that we agree with the points above. Then, a question still remains: how do we target our policy variables, and particularly inflation? Do we target a fixed level of participation in proof of stake (eg. 30% of all ether), and adjust interest rates to compensate? Do we target a fixed level of total inflation? Or do we just set a fixed interest rate, and allow participation and inflation to adjust? Or do we take some middle road where greater interest in participating leads to a combination of increased inflation, increased participation and a lower interest rate?

In general, tradeoffs between targeting rules are fundamentally tradeoffs about what kinds of uncertainty we are more willing to accept, and what variables we want to reduce volatility on. The main reason to target a fixed level of participation is to have certainty about the level of security. The main reason to target a fixed level of inflation is to satisfy the demands of some token holders for supply predictability, and at the same time have a weaker but still present guarantee about security (it is theoretically possible that in equilibrium only 5% of ether would be participating, but in that case it would be getting a high interest rate, creating a partial counter-pressure). The main reason to target a fixed interest rate is to minimize selfish-validating risks, as there would be no way for a validator to benefit themselves simply by hurting the interests of other validators. A hybrid route in proof of stake could combine these guarantees, for example providing selfish mining protection if possible but sticking to a hard minimum target of 5% stake participation.

Now, we can also get to discussing the difference between redistributing and burning transaction fees. It is clear that, in expectation, the two are equivalent: redistributing 50 ETH per day and inflating 50 ETH per day is the same as burning 50 ETH per day and inflating 100 ETH per day. The tradeoff, once again, comes in the variance. If fees are redistributed, then we have more certainty about the supply, but less certainty about the level of security, as we have certainty about the size of the validation incentive. If fees are burned, we lose certainty about the supply, but gain certainty about the size of the validation incentive and hence the level of security. Burning fees also has the benefit that it minimizes cartel risks, as validators cannot gain as much by artificially pushing transaction fees up (eg. through censorship, or via capacity-restriction soft forks). Once again, a hybrid route is possible and may well be optimal, though at present it seems like an approach targeted more toward burning fees, and thereby accepting an uncertain cryptocurrency supply that may well see low decreases on net during high-usage times and low increases on net during low-usage times, is best. If usage is high enough, this may even lead to low deflation on average.

]]> https://earlybirdsinvest.com/on-inflation-transaction-fees-and-cryptocurrency-monetary-policy/feed/ 0 58019 https://earlybirdsinvest.com/tron-binance-and-trm-labs-highlight-t3-fcu-at-coindesk-policy-regulation-tron-dao-featured-as-3-block-sponsor/ https://earlybirdsinvest.com/tron-binance-and-trm-labs-highlight-t3-fcu-at-coindesk-policy-regulation-tron-dao-featured-as-3-block-sponsor/#respond Thu, 11 Sep 2025 17:06:52 +0000 https://earlybirdsinvest.com/tron-binance-and-trm-labs-highlight-t3-fcu-at-coindesk-policy-regulation-tron-dao-featured-as-3-block-sponsor/

The Solana Policy Institute (SPI) has pledged $500,000 to the legal defense of Tornado Cash developers Roman Storm and Alexey Pertsev, according to an Aug. 28 statement.

Storm and Pertsev helped create Tornado Cash, an Ethereum-based privacy protocol that allows crypto transactions to be mixed and anonymized. After deployment, the developers relinquished control of the smart contracts, leaving the system to run without centralized oversight.

Developers held liable

Courts in the Netherlands and the US have held the developers liable for malicious actors’ use of the platform for their illicit activities.

Pertsev was convicted of money laundering in 2024, while Storm was found guilty earlier this month of conspiring to operate an unlicensed money-transmitting business.

These convictions have elicited strong responses from the crypto community, which argues that the Tornado Cash developers’ conviction misinterprets how blockchain protocols function.

Industry experts argue that developers cannot monitor or restrict usage of their protocols once the open-source code is published and immutable.

Notably, the SPI echoed this view, warning that holding coders responsible for third-party activity establishes a precedent that threatens innovation across the entire software industry.

Kristin Smith, the President of the Solana Policy Institute, said:

“Privacy is normal. Code is speech. And at Solana Institute, we’ll continue to defend the rights of software developers everywhere.”

Solana welcomes ‘Tornado Cash-like’ protocol

The SPI donation comes as Solana welcomes the launch of a Tornado Cash–style platform on its network.

On Aug. 27, Privacy Cash went live on the network, offering users a way to transfer digital assets into new wallets without linking prior addresses or transaction histories.

Mert Mumtaz, CEO of Helius Labs, said the tool’s design mirrors Tornado Cash’s but benefits from Solana’s performance and integrated block explorers.

According to him, combining the protocol with Solana’s infrastructure—and even bridging to privacy-focused assets like Zcash—gives users a pathway to near-total anonymity.

Mentioned in this article

A coalition of AI companies unveiled a Super Political Action Committee (SuperPAC), designed to influence US technology policy and strengthen the nation’s position in the global AI race, according to an Aug. 25 press release.

The group, Leading the Future (LTF), pledged to back candidates who support innovation while pushing back against legislation that could slow deployment.

The launch is backed by more than $100 million in contributions from high-profile investors and technologists. Notable supporters include venture capital firm Andreessen Horowitz (a16z), OpenAI’s Greg and Anna Brockman, Rob Conway, Joe Lonsdale, and AI startup Perplexity.

LTF’s mission

According to its mission statement, LTF intends to craft a bipartisan agenda that keeps the US at the center of AI development. The organization plans to build political networks across federal and state levels, ensuring technology-friendly candidates gain traction in future elections.

Collin McCune, head of government affairs at a16z, described the initiative as a milestone in the firm’s long-term strategy to support pro-technology lawmakers. He warned that failing to establish a favorable policy could cost the US its leadership role in the emerging industry.

Considering this, McCune stated:

“AI isn’t hype or science fiction, it’s already here. This technology can drive the next wave of American growth, create new jobs, and unlock productivity across every sector of the American economy. But make no mistake: this is also a race with China. If we don’t have the right policies, we risk ceding the future of AI, and with it, America’s economic strength and national security.”

The PAC will be directed by political consultants Zak Moffatt and Josh Vlasto. Initial operations will begin in New York, California, Illinois, and Ohio before expanding nationally in 2026. LTF will become active in the 2026 election cycle, financing campaigns aligned with its pro-innovation policy platform.

Following cypto’s example

The AI industry’s political push closely mirrors tactics used by the crypto sector during the last elections.

In the 2024 election cycle, crypto-funded PACs spent hundreds of millions to influence congressional races, from California’s Democratic Senate primary to tightly contested House contests in Virginia.

That investment has since paid significant dividends, with the US government now more inclined towards the industry and having implemented a series of pro-crypto initiatives designed to allow the space to thrive.

Still, the industry players have raised an additional $141 million to expand their lobbying presence in the forthcoming mid-term elections.

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Crypto Writer

Arslan Butt

Crypto Writer

Arslan Butt

About Author

Arslan Butt is an experienced webinar speaker, market analyst, and content writer specializing in crypto, forex, and commodities. He provides expert insights, trading strategies, and in-depth analysis…

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August 7, 2025

Bitcoin is holding at $116,830 as mainstream adoption is taking off in the US. Sheetz, a popular convenience store chain with locations across multiple states, is offering 50% off all purchases between 3 pm and 7 pm when paid with cryptocurrency through Flexa.

The “Crypto Crave & Save” promotion is designed to get people spending real crypto in the real world, with payments converted to fiat instantly to protect merchants from volatility.

It’s spreading. Steak ‘n Shake just reported saving 50% on payment fees by using Bitcoin over credit cards. These are signs that US businesses are starting to view digital assets as not just investments but as functional payment tools.

Regulatory Divergence Between the U.S. and EU

Across the Atlantic, the European Banking Authority has finalized draft rules giving “unbacked” crypto assets like Bitcoin a 1,250% risk weight, meaning EU banks would need €12.5 million in capital for every €1 million in BTC holdings.

While the measure may limit crypto exposure in Europe, it also formalizes Bitcoin’s place in the financial system, a step analysts say could strengthen long-term adoption.

By contrast, U.S. policy is moving in the opposite direction. President Donald Trump announced plans to allow cryptocurrencies in 401(k) retirement plans, opening the door to a $9 trillion market. Ether rose 4% on the news, and crypto-related equities rallied, with Coinbase gaining 3%, Galaxy Digital 6%, and Bitmine Immersion 8%. Galaxy CEO Mike Novogratz called it a “milestone” for integrating digital assets into mainstream finance.

Bitcoin (BTC/USD) Technicals Signal Bullish Continuation

From a charting perspective, Bitcoin remains in a bullish flag pattern that has been consolidating since late July’s high of $123,255. The pattern’s lower bound aligns with an upward trendline from April and the 50-day SMA at $113,154 — a key support confluence that has drawn consistent buying interest.

Momentum is turning positive, with the daily RSI at 54 after bouncing from earlier oversold conditions. Defending the 0.382 Fibonacci retracement at $113,682 has reinforced the case for an upside move. A breakout above $117,350 could open a path back to $123,255, with further targets at $126,981 and $131,574.

If $113,150 fails, however, short-term sentiment may turn cautious, exposing $110,725 and $107,768. Traders eyeing an entry may look for a high-volume move through $117,350 to confirm the breakout.

Bitcoin Price Outlook into Q4

The combination of rising retail adoption, favorable U.S. policy shifts, and a supportive technical structure gives Bitcoin a bullish bias heading into the fourth quarter.

If the bullish flag resolves upward, it could mark the start of a new leg higher, potentially paving the way toward the $250K–$500K price projections some analysts are targeting for 2025.

With institutional and retail demand converging, BTC’s current consolidation may be less a pause than a launchpad.

New Presale Bitcoin Hyper ($HYPER) Combines Bitcoin Security With Solana Speed

Bitcoin Hyper ($HYPER) is the first Bitcoin-native Layer 2 powered by the Solana Virtual Machine (SVM), built to supercharge the Bitcoin ecosystem with fast, low-cost smart contracts, dApps, and meme coin creation.

By merging Bitcoin’s security with Solana’s performance, it unlocks powerful new use cases – all with seamless BTC bridging.

The project is audited by Consult and built for scalability, simplicity, and trust.

Investor interest is surging, with the presale already surpassing $7.4 million and only a small allocation remaining.

HYPER tokens are currently available at just $0.012765, but that price is set to rise in the next 3 days.

You can buy HYPER tokens on the official Bitcoin Hyper website using crypto or a bank card.

Click Here to Participate in the Presale[/cta

Bullish, the institutional crypto exchange backed by tech billionaire Peter Thiel, is targeting a valuation of up to $4.23 billion in its U.S. initial public offering, according to a regulatory filing submitted on Aug. 4.

The company is offering 20.3 million shares priced between $28 and $31, potentially raising as much as $629.3 million, Reuters reported the same day.

If successful, Bullish would debut at a steep discount to the $9 billion valuation it once pursued in a failed 2021 merger with a blank-check company. That earlier deal was scrapped in 2022 due to regulatory uncertainty.

This IPO attempt comes amid a friendlier policy environment under the Trump administration, including the recent passage of the GENIUS Act, which outlines the first federal guidelines for stablecoins and has helped reinvigorate interest in crypto-related equities.

Bullish, led by former New York Stock Exchange president Thomas Farley, said in its prospectus that it plans to convert a substantial portion of the IPO proceeds into U.S. dollar-backed stablecoins with the support of one or more token issuers. The move mirrors the recent trend among crypto firms to anchor reserves in regulated digital dollars.

While Bullish posted a $349 million loss in the first quarter of 2025, driven largely by mark-to-market declines in its crypto holdings, investors are likely to focus more on core exchange profitability and operational efficiency.

The offering is being led by J.P. Morgan, Jefferies, and Citigroup. Shares are expected to trade on the New York Stock Exchange under the ticker symbol “BLSH.”

Bullish’s filing comes just days after Coinbase, the largest publicly traded crypto exchange, reported a decline in second-quarter profit amid sluggish trading activity. Despite the dip, broader investor sentiment appears to be shifting toward long-term structural plays in the digital asset space.

Mentioned in this article

The U.S. Securities and Exchange Commission’s new Crypto Task Force will begin a cross-country tour this month to meet with small crypto startups and expand the number of people who are heard in crypto policymaking.

Led by Commissioner Hester Peirce, the task force plans to visit 10 cities from August to December, it announced in a press release.

The sessions are primarily aimed at crypto-related projects with fewer than 10 employees and under two years in operation. Meetings will be held in cities including Berkeley, Boston, Dallas, Chicago, and New York.

“We want to hear from people who were not able to travel for the roundtables that took place this past spring in Washington, D.C.,” Peirce said in a statement.

“The Crypto Task Force is acutely aware that any regulatory framework will have far-reaching effects, and we want to ensure that our outreach is as comprehensive as possible.”

The Crypto Task Force was launched in January under acting SEC Chair Mark Uyeda, in a bid to develop clearer regulations for the cryptocurrency industry.

Read more: SEC Commissioner Hester Peirce on the New Crypto Task Force

August 1st, 2025 – New York, United States

Plume, the real world asset (RWA) chain, welcomed the inclusion of its consultation and insights in the President’s Working Group on Digital Asset Markets report.

Plume was highlighted for its contribution of market insights on tokenization of real world assets.

Last week, Plume released a set of forward-looking policy recommendations calling for the development of capital markets policy. In the memo, the team called for capital markets regulation that matches the innovation unlocked by stablecoins. The Working Group’s newly released national roadmap affirms that vision, highlighting the role of permissionless infrastructure, tokenized financial products, and updated regulatory frameworks in advancing U.S. leadership in digital finance.

“The Report is a full-throated endorsement of permissionless blockchains and decentralized finance at the heart of a future onchain financial system. Plume has worked to sate global demand for US dollar assets through offshore work arounds. This Report is the blueprint for the onshoring of onchain capital markets under a regulatory framework that addresses real risks but also realizes new opportunities,” said Salman Bananei, General Counsel at Plume. 

The Report aligns with Plume’s core belief that open, permissionless blockchains and DeFi can strengthen markets when paired with responsible oversight. This reinforces the value of decentralized infrastructure under thoughtful regulation.

It also echoes Plume’s call for regulatory clarity, supporting innovation sandboxes, safe harbors, and updated rules around custody, registration, and capital treatment, especially for assets on public blockchains.

The Report affirms that tokenized assets are the future of finance. The team at Plume have advocated for policies that enable safe tokenized yield and other onchain financial products as a part of robust onchain capital markets.

On stablecoins, the Report aligns with Plume’s position that they can modernize U.S. payments and that the government should support the “development and growth of lawful and legitimate dollar-backed stablecoins worldwide.”

Finally, the Report supports tax reforms long advocated by Plume, including treating stablecoins as money and creating a digital asset-specific tax category to support compliant onchain activity.

Plume As a Real World Asset Market Leader

At over 160,000 holders at time of writing, Plume accounts for 50% of all RWA holders across Web3. With over $300 million in total value locked (TVL) and growing, Plume is well placed to support policy as governments across the world catch up to the reality that digital assets are a foundational part of future financial structures. 

The alignment between Plume’s proposals and federal recommendations underscores the company’s leadership in shaping policy at the intersection of blockchain and traditional finance. 

About Plume

Plume is the first full-stack blockchain and ecosystem dedicated to real-world asset finance. With 200+ projects building on its EVM-compatible infrastructure, Plume makes it simple to tokenize and integrate real-world assets into DeFi applications, enabling anyone to interact with global financial markets through intuitive, on-chain tools.

Contact

Leila Stein
press@plumenetwork.xyz

President Donald Trump’s administration released its most detailed digital asset policy report on Wednesday, outlining a broad regulatory roadmap for crypto but offered no new insight into the government’s proposed strategic Bitcoin (BTC) reserve.

The 163-page document, prepared by the President’s Working Group on Digital Asset Markets, consolidates the administration’s position across stablecoin regulation, tax reform, and federal market oversight.

While the report affirms a commitment to digital innovation, it stops short of introducing new initiatives or expanding on earlier announcements, including the high-profile plan to build a federal reserve of Bitcoin and other digital assets.

The reserve proposal, initially introduced through a January executive order, receives only a passing mention in the final section of the report.

Senior administration officials said work is underway but offered no timeline or further details. Trump adviser Bo Hines previously indicated that the government may choose not to publicly release the reserve’s development report despite intentions to accumulate BTC.

The lack of specifics on the reserve initiative has fueled uncertainty within the crypto industry, which had hoped for a clearer blueprint. The project had drawn attention earlier this year when officials suggested it would rely in part on assets seized through enforcement actions.

Lawmakers, including Senator Cynthia Lummis (R-Wyo.), have introduced legislation, such as the BITCOIN Act, to support strategic accumulation, but those efforts remain stalled in Congress. Beyond the reserve issue, the report reaffirms support for the administration’s existing legislative priorities.

It highlighted the recently enacted GENIUS Act, which sets regulatory standards for stablecoin issuers, and follows the progress of the Clarity Act, an expansive bill governing crypto market structure, now under Senate consideration after passing the House.

The report also encouraged federal regulators, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), to use their current authority to facilitate digital asset trading, even as legislative work continues.

A separate section outlines tax reform proposals aimed at easing the compliance burden for crypto users. These include thresholds that exempt low-value transactions from capital gains taxes and updates to how staking rewards are treated for tax purposes, policies long championed by Lummis and other digital asset advocates.

Officials described the report as a framework for measuring progress under President Trump’s crypto agenda. While the document consolidates months of regulatory efforts, it leaves key questions unanswered, particularly around the future of federal crypto stockpiles.

Mentioned in this article