Donald Trump signed an executive order – eagerly awaited by the crypto-asset sector – aimed at “establishing clear regulations for digital financial technology” and launched the work of a new presidential task force on digital asset markets.
Evaluating the potential creation of a “national strategic stockpile of digital assets” falls within the purview of the task force, 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 cryptography “czar” — a nomination announced last month by Trump, who said the former PayPal executive would “guide policy…in two areas critical to the future of American competitiveness.”
The decree (signed on January 23) repeals a executive order on digital assets under the Joe Biden administration in March 2022as well as a Treasury Department’s “Framework for International Engagement on Digital Assets” (July 2022) which – a White House ‘fact sheet’ on Trump executive order United States – “suppressed innovation and undermined America’s economic freedom and global leadership in digital finance.”
Trump pledged during his pre-election campaign to make the United States the “crypto capital” and “Bitcoin superpower” of the planet. Bitcoin is the most famous cryptocurrency in the world. Its price surpassed $100,000 (around £78,000) in the first week of December 2024 on hopes of lighter US crypto regulations.
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Dollar-backed stablecoins
Trump’s order – titled “Strengthening U.S. Leadership in Digital Financial Technology” – states that its overall goal is to “secure America’s position as a global leader in the digital asset economy, fostering innovation and economic opportunity for all Americans.” It defines the term “digital asset” to refer to any digital representation of value recorded on a distributed ledger, including cryptocurrencies, digital tokens and stablecoins.
The order begins by stating that the digital assets industry plays a “crucial role in innovation and economic development in the United States, as well as in our country’s international leadership,” explaining that “it is therefore the policy of my administration to support responsible growth. and the 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 US dollar, “including through actions to promote the development and growth of lawful and legitimate dollar-backed stablecoins throughout the world.”
Campaigning for the presidency, Trump vowed to stop potential launch of a US central bank digital currency (CBDC). He called the potential digital dollar a “dangerous threat to freedom.”
The executive order furthers this, stating that his administration will “take steps to protect Americans from the risks of CBDCs, which threaten the stability of the financial system, the privacy of individuals, and the sovereignty of the United States, including by banning the establishment, issuance, circulation and use of a CBDC within the jurisdiction of the United States.
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Working group timeline
The President’s Working Group is established within the National Economic Council. Members will include the Secretary of the Treasury, the Chairman of the Securities & Exchange Commission (SEC), and the Chairman of the Commodity Futures Trading Commission (CFTC). Sacks’ role in the order is called “special advisor for AI and cryptography.”
“Within 30 days from the date of this order, the Department of the Treasury, the Department of Justice, the SEC and other appropriate agencies, the heads of which are included in the task force, will identify all regulations, documents of guidance, orders. or other matters that affect the digital assets industry,” the order states.
Then, within 60 days of the order, each agency must submit recommendations to the President “as to whether each regulation, guidance document, order, or other item identified should be rescinded or modified, or, for items other than the regulations, adopted”. in a regulation.
Within 180 days, the task force must submit a report to the president who will recommend regulatory and legislative proposals that advance the order’s policies.
This includes “evaluating the potential creation and maintenance of a national stockpile of digital assets and proposing criteria for the establishment of such a stockpile, potentially derived from cryptocurrencies legally seized by the federal government in as part of its law enforcement efforts. »
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SEC Crypto Working Group
In a separate development in the digital assets space, the SEC – now under the leadership of Acting Chairman Mark Uyeda – earlier this week launched a crypto working group dedicated to developing a regulatory framework complete and clear for crypto assets.
Uyeda, a Republican member of the SEC, fills a role previously held by Gary Gensler, who resigned upon Trump’s return to the White House. Crypto-related enforcement actions made headlines during Gensler’s tenure, which began in 2021. Trump chose former SEC Commissioner Paul Atkins to lead the agency permanently. It awaits Senate approval.
“To date, the SEC has primarily relied on enforcement actions to regulate crypto retroactively and reactively, often adopting new and untested legal interpretations along the way,” the SEC said in its announcement. working group. “Clarity around who should register and practical solutions for those seeking to register remain elusive. The result is confusion about what is legal, which creates an environment hostile to innovation and ripe for fraud. The SEC can do better.
The working group will help the SEC “draw clear regulatory lines, provide realistic pathways to registration, develop sensible disclosure frameworks, and deploy enforcement resources wisely,” the announcement said. It will “operate within the statutory framework provided by Congress and coordinate the provision of technical assistance to Congress as it makes changes to that framework.”
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“End aggressive repressive measures”
The White House briefing on Trump’s executive order says the outgoing president “will help make the United States the center of digital financial technology innovation by ending aggressive enforcement actions and regulatory overreach who stifled crypto innovation under previous administrations.”
‘President Trump’s policy vision marks an unprecedented step toward ushering in a new era for digital financial technology; an environment in which President Trump’s administration will work to ensure that innovation thrives, regulatory frameworks are clear, and economic freedom is protected,” it says.
Under Biden, the The White House released a “comprehensive framework” for “responsible innovation” in digital assets in September 2022. (six months after Biden’s decree). Regulators were encouraged to “aggressively pursue investigations and enforcement actions” against illegal practices, and the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) were asked to “redouble their efforts.” efforts to monitor consumer complaints and to enforce laws against unfair, deceptive, or fraudulent practices.” abusive practices. The Federal Reserve has also been encouraged to continue its research, experimentation, and evaluation of CBDCs.
Trump launched his own cryptocurrency, $Trump, three days before returning to the White House. His wife Melania followed suit by launching $Melania on the eve of her husband’s inauguration. Both of their cryptocurrency offerings have been called “meme coins,” meaning cryptocurrency inspired by Internet memes or pop culture phenomena.
THE Landmark European Union (EU) regulations relating to the crypto-asset sector came into force on December 30, 2024.. The 27-member bloc’s Markets in Crypto Assets Regulation (MiCA) (also abbreviated as MiCAR) was approved by European parliamentarians in April 2023, making the EU the first major jurisdiction in the world to establish a regulatory framework complete for crypto-assets.