U.S. President Donald Trump on Thursday ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile, making good on his promise to quickly overhaul U.S. crypto policy.
The much-anticipated action also ordered that banking services for crypto companies be protected, alluding to industry claims that U.S. regulators have directed lenders to cut crypto companies off from banking services – something regulators deny. The order also banned the creation of central bank digital currencies in the U.S. which could compete with existing cryptocurrencies.
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In another key action pushed for by the crypto industry, the U.S. Securities and Exchange Commission late on Thursday rescinded accounting guidance that had made it very expensive for some listed companies to safeguard crypto assets on behalf of third parties. The crypto industry said that guidance had stymied digital asset adoption.
On the campaign trail, Trump courted crypto cash by pledging to be a “crypto president” and promote the adoption of digital assets. That is in stark contrast to former President Joe Biden’s regulators which, in a bid to protect Americans from fraud and money laundering, cracked down on the industry, suing exchanges Coinbase, Binance and dozens more, alleging they were flouting U.S. laws. The companies deny the allegations.
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Thursday’s order was cheered by the crypto industry, which had been pushing for the new administration to send a strong signal of support in Trump’s first few days in office.
“Today’s crypto executive order marks a sea change in U.S. digital asset policy,” said Nathan McCauley, CEO and co-founder of crypto company 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.”
If implemented by the relevant regulators, Trump’s order has the potential to push cryptocurrencies into the mainstream, regulatory and crypto experts said. It follows Tuesday’s SEC announcement that it was creating a taskforce to overhaul crypto policy.
Bitcoin hit a fresh record high of $109,071 on Monday amid investor excitement over the new crypto-friendly administration, although it was down to about $103,000 as of late Thursday afternoon.
“Just days into his administration, President Trump is delivering on his promises… to keep the United States a leader in digital assets innovation,” Senator Tim Scott, the Republican chair of the Senate Banking Committee, said in a statement.
The industry has for years argued existing U.S. regulations are inappropriate for cryptocurrencies and have called for Congress and regulators to write new ones clarifying when a crypto token is a security, commodity or falls into another category.
The working group, which will include the Treasury secretary, chairs of the SEC and Commodity Futures Trading Commission, along with other agency heads, is tasked with developing a regulatory framework for digital assets, according to the order. That includes stablecoins, a type of cryptocurrency typically pegged to the U.S. dollar.
The group is also set to “evaluate the potential creation and maintenance of a national digital asset stockpile… potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.”
The order did not provide further details on how such a stockpile would be set up and analysts and legal experts are divided on whether an act of Congress will be necessary. Some have argued the reserve could be created via the U.S. Treasury’s Exchange Stabilization Fund, which can be used to purchase or sell foreign currencies, and to also hold bitcoin.
In December, Trump named venture capitalist and former PayPal (PYPL.O), executive David Sacks as the crypto and artificial intelligence czar. He will chair the group, the order said.
