Trump signs executive order overhauling US cryptocurrency policy

• Published On: 25 January 2025 at 07:28

On Thursday, President Donald Trump signed an executive order establishing a cryptocurrency working group tasked with developing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile.

The move fulfills Trump's campaign promise to position the United States as a global leader in digital asset innovation.

The order includes safeguards for banking services provided to cryptocurrency companies, alluding to long-standing industry complaints that regulators have pressured banks to cut ties with crypto firms—a claim regulators dispute. Furthermore, the order prohibits the creation of central bank digital currencies in the United States, citing concerns that such currencies will undermine existing cryptocurrencies.

In a significant victory for the crypto sector, the United States Securities and Exchange Commission reversed previous accounting guidance that made it expensive for publicly traded companies to hold crypto assets for clients. Industry leaders criticized the guidance as a barrier to digital asset adoption.

"Today's crypto executive order marks a sea change in U.S. digital asset policy," said Nathan McCauley, CEO and co-founder of Anchorage Digital. "By taking a whole-of-government approach to crypto, the administration is making a significant first step toward writing clear, consistent rules of the road."

Trump's stance on cryptocurrencies contrasts sharply with that of the Biden administration, which took a hard line against the industry. Under Biden, regulators filed lawsuits against major exchanges including Coinbase and Binance, alleging violations of US securities laws. Both companies have denied the claims.

The cryptocurrency industry has applauded the new administration's support. Bitcoin surged to a record high of $109,071 earlier this week, before falling slightly to $103,000 by late Thursday.

Senator Tim Scott, chair of the Senate Banking Committee, stated that President Trump is fulfilling his promise to keep the US at the forefront of digital asset innovation, despite only being in office for a few days.

The executive order tasked the newly formed working group with developing a comprehensive regulatory framework for digital assets, including stablecoins (cryptocurrencies pegged to the US dollar).

The group will also consider the establishment of a national cryptocurrency stockpile, possibly sourced from digital assets lawfully seized by federal authorities.

The stockpile's structure is unknown, and analysts disagree on whether its establishment would require congressional approval. Some experts believe it could be implemented through the Treasury's Exchange Stabilization Fund, which is typically used for foreign currency reserves but could also accommodate Bitcoin.

David Sacks, a venture capitalist and former PayPal executive, has been named the administration's cryptocurrency and artificial intelligence czar and will lead the working group. The initiative comes after the SEC announced earlier this week that it would form a task force to overhaul cryptocurrency policy.