Trump signed an executive order to regulate the crypto market. The document is designed to strengthen US leadership in digital finance
Donald Trump signed an executive order to regulate the crypto market and consider creating a cryptocurrency reserve. The executive order on “Strengthening American Leadership in Digital Financial Technology” is published on the White House website.
The document initiates the creation of a working group to develop a “federal regulatory framework for digital assets, including stablecoins,” as well as assess the possibility of creating a “national digital asset reserve.”
The working group on the crypto market created by the decree should assess the potential of such a reserve and propose criteria for its formation. According to the decree, this reserve could be created from cryptocurrencies confiscated by the US government as part of the fight against illegal activities.
The working group will be headed by “cryptocurrency czar” David Sachs. It will include the Treasury Secretary, the chairman of the Securities and Exchange Commission (SEC) and heads of other key agencies. The White House has directed the working group to bring in experts from the digital asset industry to incorporate views outside of the federal government.
Details of this Executive Order:
- Ministries and agencies must provide the working group with recommendations to revise or repeal existing regulations that impede the development of the digital asset sector.
- The decree prohibits government agencies from developing, issuing or promoting digital national currencies (CBDCs).
- Previously issued executive orders and frameworks, such as the previous administration's Digital Assets Executive Order and the U.S. Department of the Treasury's International Digital Assets Strategy, are rescinded. These measures have been described as stifling innovation and undermining US economic freedom.
On January 23, before the signing of the decree became known, Donald Trump spoke online at the World Economic Forum in Davos. He stated that the US will become the capital of the world for the development of artificial intelligence and cryptocurrencies.
There are 198,100 BTC (~$20 billion) under the control of US authorities, according to the Arkham platform. These funds were mostly confiscated as part of various investigations.
Trump has previously stated that he intends to make a strategic stockpile of bitcoins that the US already has. In the summer of 2024, at the Bitcoin 2024 cryptocurrency conference, Trump ended his speech by stating that the government will stop selling confiscated bitcoins if he is elected president.
The US president did not comment on other initiatives for a government bitcoin reserve, including a bill by Senator Cynthia Lummis, who was appointed to head the digital assets subcommittee in the US Senate on January 23.
“Digital assets are the future, and if the United States is to remain a leader in financial innovation, Congress urgently needs to pass legislation that establishes a comprehensive legal framework for digital assets and strengthens the U.S. dollar with a strategic bitcoin reserve,” Lummis wrote in an accompanying message.
Lummis is the author of a bill for a US national bitcoin reserve called the Bitcoin Act. Under its terms, the US Federal Reserve would be required to buy bitcoin and hold it as a reserve asset like gold or foreign currencies. The government is expected to buy up to 200,000 bitcoins per year for five years with the goal of accumulating 1 million bitcoins. According to the idea of Lummis, this, among other things, can help cut the U.S. government debt in half by 2045.