Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.

U.S. and UK Publish Digital Asset and Stablecoin Recommendations

On July 14, the U.S. Department of Treasury and the UK HM Treasury released initial recommendations from the Transatlantic Taskforce for Markets of the Future (Taskforce) aimed at deepening U.S.-UK financial services cooperation, with a particular focus on digital assets, tokenization, stablecoins, and capital markets connectivity. The Taskforce recommends establishing a one-year, private sector–led group to test cross-border use cases for tokenized assets, identify regulatory clarity needed for specific use cases, and develop technical standards to support the broader tokenized finance ecosystem. It also calls for U.S. and UK regulatory authorities to identify common regulatory approaches for tokenized assets, including settlement finality for tokenized securities transactions and the possible use of stablecoins and tokenized money market funds as margin collateral at central counterparties. The recommendations further contemplate a joint U.S.-UK statement on stablecoins; continued support for a “multi-money” ecosystem in which stablecoins, tokenized deposits, and other forms of digital money can coexist; and coordinated work to ensure prudential standards for crypto assets are future-proofed, technology-neutral, and evidence-based. The digital asset recommendations emphasize cross-border regulatory alignment, reduced market fragmentation, and practical experimentation to promote innovation while reinforcing the U.S. and the UK’s global leadership in financial markets. See the related press release here and the recommendations here. 

DTCC Announces Successful Tokenization of Assets and Tokenized Asset Trades

On July 15, The Depository Trust & Clearing Corporation (DTCC) announced that it had successfully converted assets held at The Depository Trust Company (DTC) into tokens that were subsequently used in real production trades. More than 30 firms representing a variety of traditional financial institutions and digital market participants participated in DTCC’s milestone event. The tokenized assets were minted and traded on DTCC’s private HyperLedger Besu network and the public Canton network. The tokenized assets were included in a variety of transactions, including collateral pledge, security lending, U.S. Treasury repurchase delivery-versus-payment (DVP) trade, equity DVP trade, equity delivery-versus-delivery (DVD) trade, equity token transfer, and central counterparty margin workflows. The initial transactions were designed and selected to reflect real-world use cases. The milestone comes seven months after DTC received a no-action letter from the Securities and Exchange Commission (SEC), which authorized DTC to operate a tokenization service for real-world assets it custodies. See the press release here.

European Central Bank Selects 36 Payment Service Providers To Participate in Pilot

On July 14, the European Central Bank (ECB) announced its selection of 36 payment service providers to participate in the ECB’s digital euro pilot program. The pilot is intended to test the digital euro’s technical functionality and operational processes and support the potential issuance of a digital euro. The pilot will use a beta version of the digital euro with certain systems made available to distributing payment service providers. Locations where the pilot will be held include Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, the Netherlands, Austria, Portugal, Slovenia, Slovakia, and Finland. The pilot is set to start during the second half of 2027 and will continue for a period of 12 months. See the ECB’s press release here. 

FLEOA Supports Clarity Act While Recommending Targeted Refinements

On July 10, the Federal Law Enforcement Officers Association (FLEOA) sent a letter to the U.S. Senate Committee on Banking, Housing, and Urban Affairs (Committee) in support of the Digital Asset Market Clarity Act (the CLARITY Act). In its letter, the FLEOA notes the Committee’s efforts in establishing a clear regulatory framework for digital assets while preserving criminal, anti-money laundering, counterterrorism financing, sanctions enforcement, and investigative authorities, representing progress toward balancing technological innovation with public safety. The FLEOA also provided recommendations to the Committee to consider, among other things, providing greater clarity regarding accountability with respect to decentralized finance protocols, artificial decentralization, and revising the specific intent language to the already existing knowledge standard. See FLEOA’s press release here.

Hyperliquid Policy Center and Phantom Submit Joint Letter to CFTC To Create Tailored Rules for On-Chain Trading

On July 9, the Hyperliquid Policy Center and Phantom Technologies submitted a response to the Commodity Futures Trading Commission (CFTC) Request for Information, urging the CFTC to modernize its derivatives regulatory framework for on-chain markets. They argue that existing rules assume a custodial, intermediary-driven market structure, while blockchain technology can allow customers to transact peer to peer without giving intermediaries control over orders, funds, or private keys. The submission recommends that the CFTC clarify that merely developing or contributing to on-chain protocol software should not trigger registration; issue guidance allowing registrants such as designated contract markets, derivatives clearing organizations, and futures commission merchants to use on-chain infrastructure for execution, clearing, margining, settlement, custody, and recordkeeping; and codify recent no-action relief for non-custodial wallets and front-end interfaces that only provide technical access to regulated markets. The companies contend that these steps would help bring responsible on-chain derivatives innovation onshore while preserving the CFTC’s focus on the persons and entities that actually handle customer orders, funds, or transactions. See the letter here.