In a new article at the Brookings Institution, former CFTC Chair and Brookings Senior Fellow Timothy Massad argues the best way to regulate digital assets is to combine the two key agencies involved in U.S. market oversight into a single markets regulator with a unified digital‑asset mandate. Massad asserts President Trump could be just the president who can get an idea whose time may have finally come across the finish line. Although Massad has been critical in the past of Trump’s profiting from crypto, he stated in an interview, “…Look, he’s been able to do something that other presidents haven’t been able to do. And, you know, maybe this could be one.”
Massad argues that the cleanest way to fix U.S. crypto market structure is not to carve out new categories for tokens, but to fuse the Securities and Exchange Commission and Commodity Futures Trading Commission into a single authority. As he put it, “The main thing that concerns me is the potential for the proposals that are now being considered to undermine regulation of securities, to undermine traditional market regulation, because of the way they define this new category of assets.” He added, “I think those provisions are being driven by the crypto industry. I think they are designed to promote existing business models and to promote the technology when the law should be technologically neutral.”
Why merge the SEC and CFTC
Massad’s basic concern is that current “market structure” proposals in Congress risk weakening core securities regulation by the way in which they carve out a bespoke asset class for crypto at the behest of industry lobbyists. He argues that lengthy exemptions and bespoke definitions will be exploited by lawyers and platforms to secure lighter‑touch treatment while still selling what are effectively securities to retail investors.
Merging the agencies, he says, would address the underlying problems that arise from a fragmented system, where products might fall between historical jurisdictional lines. It would lead to better regulation of the spot market for digital commodities and better disclosure rules for tokens depending on their function and manner of sale. A single authority could also write technology‑neutral rules for tokenized securities, derivatives, and spot digital assets, aligning “back‑office” requirements like reporting, clearing, settlement, and custody across products regardless of type.
A continuum, not a binary
Massad’s paper pushes back on the idea that tokens neatly split into “securities” and “commodities.” Instead, he lays out a continuum of token categories where disclosure and regulatory obligations vary with how the asset is used with key questions a regulator would need to consider. “It makes much more sense to say, the two agencies should get together because they can refine that taxonomy and the disclosure rules over time, and make changes as the technology develops, the market develops, and the use cases change. That’s much better than having Congress lock in definitions today based on what they’re hearing from industry lobbyists today.”
He notes that even prominent crypto venture firms like Andreessen Horowitz’s a16z have advanced multi‑bucket “token taxonomies” that implicitly recognize more than a binary split. For Massad, that is precisely why a merged agency—rather than Congress—should design and refine the taxonomy over time, adjusting categories and standards as technologies and use cases evolve instead of freezing today’s definitions into statute, particularly when the technology is still evolving.
KYC/AML and digital identity
On illicit finance, Massad is blunt that the industry must get over the idea that a digital‑based financial system can rest on anonymous or even pseudonymous high‑value transactions. “Anyone who thinks we’re going to rebuild the financial system on the basis of anonymous wallets, or even pseudonymous wallets and peer to peer transactions, is kidding themselves,” he said, while also distinguishing small, low‑risk payments—where anonymity may be tolerable—from larger flows where authorities need to be able to identify parties when there is legal cause.
He also criticizes today’s public blockchain model as “backwards”: everyone can see every transaction tied to a known address, but the government cannot necessarily identify who is the beneficial owner of an address, making it difficult to enforce sanctions, anti‑money-laundering rules, and counter‑terrorist‑financing controls. His preferred answer is a digital‑identity framework in which credentials are “pinged” before a smart contract executes, allowing privacy‑preserving verification while ensuring regulators can reach behind transactions when necessary; he argues stablecoin issuers in particular should be responsible for monitoring on‑chain activity and filing suspicious‑activity reports, not just KYC‑ing direct customers.
Trump’s Role and Political Timing
Perhaps Massad is right, where Trump just might be able to carry this long‑discussed consolidation over the finish line, leveraging his political capital to push Congress to realign committee jurisdictions and safeguard the crypto industry from future agency turf battles that have blocked prior efforts. That argument lands at a moment when Congress is already legislating in digital assets, so if ever there was an opportunity to bolt a merger provision or deep coordination mechanism into broader crypto or market‑structure packages, that would be now.
