Donald Trump has signed an executive order – eagerly awaited by the cryptoassets sector – to ‘establish regulatory clarity for digital financial technology’ and kicked off the work of a new presidential working group on digital asset markets.
Evaluating the potential creation of a ‘strategic national digital assets stockpile’ is within the working group’s remit, according to the order, which was signed three days into his second term as US president.
The group will be chaired by David Sacks in his new role as White House artificial intelligence (AI) and crypto ‘czar’ – an appointment announced last month by Trump, who said the former PayPal senior executive would ‘guide policy … in two areas critical to the future of American competitiveness.’
The executive order (signed on 23 January) revokes an executive order on digital assets under Joe Biden’s administration in March 2022, as well as a Treasury Department ‘Framework for International Engagement on Digital Assets’ (July 2022) which – a White House ‘fact sheet’ on Trump’s executive order states – ‘suppressed innovation and undermined US economic liberty and global leadership in digital finance.’
Trump pledged during his pre-election campaigning to make the US the ‘crypto capital’ and ‘Bitcoin superpower’ of the planet. Bitcoin is the world’s best-known cryptocurrency. Its price topped $100,000 (about £78,000) during the first week of December 2024 amid hopes of lighter US crypto regulation.
RELATED ARTICLE Trump combines AI and crypto in White House ‘czar’ role – a news story (11 December 2024) on David Sacks’ appointment
Dollar-backed stablecoins
Trump’s order – titled ‘Strengthening American Leadership in Digital Financial Technology’ – states that its overall aim is to ‘secure America’s position as the world’s leader in the digital asset economy, driving innovation and economic opportunity for all Americans.’ It defines the term ‘digital asset’ as referring to any digital representation of value that is recorded on a distributed ledger, including cryptocurrencies, digital tokens and stablecoins.
The order begins by stating that the digital asset industry plays a ‘crucial role in innovation and economic development in the United States, as well as our Nation’s international leadership’, explaining that ‘it is therefore the policy of my Administration to support the responsible growth and use of digital assets, blockchain technology and related technologies across all sectors of the economy’.
It will achieve this, for example, by ‘promoting and protecting’ the sovereignty of the United States dollar, ‘including through actions to promote the development and growth of lawful and legitimate dollar-backed stablecoins worldwide’.
While campaigning for the presidency, Trump vowed to stop the potential launch of a US central bank digital currency (CBDC). He slammed a potential digital dollar as a “dangerous threat to freedom”.
The executive order follows through on this, stating that his administration will ‘tak[e] measures to protect Americans from the risks of CBDCs, which threaten the stability of the financial system, individual privacy, and the sovereignty of the United States, including by prohibiting the establishment, issuance, circulation and use of a CBDC within the jurisdiction of the United States.’
*** Global Government Fintech’s crypto coverage ***
Working group’s timeline
The president’s working group is established within the National Economic Council. Members will include the Treasury secretary, Securities & Exchange Commission (SEC) chairman and Commodity Futures Trading Commission (CFTC) chairman. Sacks’ role in the order is referred to as ‘special adviser for AI and crypto’.
‘Within 30 days of the date of this order, the Department of the Treasury, the Department of Justice, the SEC, and other relevant agencies, the heads of which are included in the working group, shall identify all regulations, guidance documents, orders or other items that affect the digital asset sector,’ the order states.
Then, within 60 days of the order, each agency needs to submit to the chair recommendations ‘with respect to whether each identified regulation, guidance document, order, or other item should be rescinded or modified, or, for items other than regulations, adopted in a regulation.’
Within 180 days, the working group needs to submit a report to the president that will recommend regulatory and legislative proposals that advance the policies in the order.
This includes ‘evaluat[ing] the potential creation and maintenance of a national digital asset stockpile and propos[ing] criteria for establishing such a stockpile, potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.’
RELATED ARTICLE SEC sets up crypto taskforce as Trump returns to power – a news story (23 January 2025) on the Securities & Exchange Commission (and other US developments as Trump returns to power)
SEC’s crypto taskforce
In a separate development in the digital assets ballpark, the SEC – now under the leadership of acting chairman Mark Uyeda – earlier this week ‘launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets.’
Uyeda, a Republican member of the SEC, is filling a role previously occupied by Gary Gensler, who stepped down as Trump returned to the White House. Crypto-related enforcement actions dominated headlines during Gensler’s tenure, which began in 2021. Trump has picked former SEC commissioner Paul Atkins to run the agency on a permanent basis. He awaits Senate approval.
‘To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way,’ the SEC stated in its announcement of the taskforce. ‘Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive. The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud. The SEC can do better.’
The taskforce will help the SEC to ‘draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks and deploy enforcement resources judiciously,’ the announcement stated. It will ‘operate within the statutory framework provided by Congress and will coordinate the provision of technical assistance to Congress as it makes changes to that framework.’
RELATED ARTICLE EU crypto regulation MiCA comes fully into force – a news story (30 December 2024) on the European Union (EU)’s landmark regulation for the crypto-assets sector coming into full force
‘Halting aggressive enforcement actions’
The White House briefing on Trump’s executive order states that the returning president will ‘help make the United States the centre of digital financial technology innovation by halting aggressive enforcement actions and regulatory overreach that have stifled crypto innovation under previous administrations’.
‘President Trump’s policy vision marks an unprecedented step towards welcoming in a new era for digital financial technology; one in which President Trump’s administration will work towards ensuring innovation thrives, regulatory frameworks are clear and economic liberty is protected,’ it states.
Under Biden, the White House published a ‘comprehensive framework’ for ‘responsible innovation’ in digital assets in September 2022 (six months after Biden’s executive order). Regulators were encouraged to ‘aggressively pursue investigations and enforcement actions’ against unlawful practices, and the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) urged ‘to redouble their efforts to monitor consumer complaints and to enforce against unfair, deceptive or abusive practices.’ The Federal Reserve was also encouraged to continue with CBDC research, experimentation and evaluation.
Trump launched his own cryptocurrency, $Trump, three days before his White House return. His wife Melania followed suit with the launch of $Melania on the eve of her husband’s inauguration. Both their crypto-coin issuances have been referred to as ‘meme coins’ – meaning a cryptocurrency that is inspired by internet memes or pop-culture phenomena.
The European Union (EU)’s landmark regulation for cryptoassets sector came into full force on 30 December 2024. The 27-member bloc’s Markets in Crypto-Assets (MiCA) regulation (also abbreviated to MiCAR) was approved by European parliamentarians in April 2023, making the EU the world’s first major jurisdiction to establish a comprehensive regulatory framework for crypto-assets.
