Digital-asset market-structure principles tell federal financial regulators to welcome responsible innovation by offering no-action letters, sandboxes, and safe harbors, and by issuing guidance confirming crypto activities are permissible for banks when conducted safely

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The principles include setting up clear distinctions between digital securities and commodities and a shared regulatory structure that prevents an "all-encompassing" watchdog from emerging; establishing a "small package" of money-laundering protections that are "pro-innovation"; and encouraging the federal regulators to embrace "no-action guidance, sandboxes, safe harbors, coordination and appropriate application requirements."

Federal financial regulators should take common-sense steps to respond to responsible innovation, including potentially through increased use of no-action guidance, sandboxes, safe harbors, coordination, and appropriate application requirements. Federal financial regulators should provide clear guidance affirming that many crypto-related activities are permissible for banks and other financial institutions, provided they do not threaten the safety and soundness of the institution. Clear guidance will also improve and better enforcement by establishing well-defined rules and expectations, fostering accountability, and enabling consistent application of regulations, leading to better understanding and compliance.