The SEC’s announcement of a digital assets regulation proposal invites potential challenges for the administration to craft a framework for the booming market while a landmark cryptocurrency bill is stalled in Congress.

The Securities and Exchange Commission’s proposal published Aug. 18 would exempt certain digital asset offerings from securities registration statements. Without the Clarity Act passed, though, large financial institutions may remain wary of embracing digital assets, attorneys said.

The proposal, which follows earlier guidance the SEC jointly released with the Commodity Futures Trading Commission, advances the Trump administration’s goals of creating rules that boost onshore cryptocurrency presence and …