Trump Signs First Cryptocurrency Executive Order, Officially Launching the Crypto Renaissance.
Written by: KarenZ, Foresight News
Today, U.S. President Trump officially signed the Executive Order on Strengthening American Leadership in Digital Financial Technology. This executive action not only signifies the U.S. government's emphasis on the digital asset industry but also provides a clear policy framework for its future development. What are the core contents of this executive order? What potential impacts does it have?
TL;DR
Protect cryptocurrency rights (development and deployment of related software, self-custody, trading, mining);
Prohibit CBDCs;
Protect dollar sovereignty and support dollar-backed stablecoins;
A new regulatory framework will be introduced 180 days later to regulate the issuance and operation of digital assets and assess the feasibility of establishing and maintaining a national digital asset reserve (the reserve may come from cryptocurrencies lawfully seized by the federal government through its law enforcement actions).
All agencies must review existing rules affecting the digital asset industry within 30 days and submit recommendations on whether to repeal or modify existing regulations or guidance within 60 days.
Core Contents of the Cryptocurrency Executive Order
Support for Innovation and Responsible Development
The executive order states that the current administration's policy is to support the responsible development and use of digital assets, blockchain technology, and related technologies across all economic sectors, including:
Protecting and promoting the ability of individual citizens and private entities to legitimately access and use open public blockchain networks, including the development and deployment of software, participation in mining and validation, trading with others without illegal censorship, and the ability to self-custody digital assets;
Promoting and protecting dollar sovereignty, including actions to drive the global development and growth of legitimate and compliant dollar stablecoins;
Protecting and promoting fair and open access to banking services for all law-abiding citizens and private entities;
Providing regulatory clarity and certainty based on technology-neutral regulations, creating a framework that considers emerging technologies, ensuring transparency in decision-making, and clearly defining regulatory boundaries, which are crucial for supporting a vibrant and inclusive digital economy as well as innovation in digital assets, permissionless blockchains, and distributed ledger technologies;
Taking measures to protect Americans from the risks of central bank digital currencies (CBDCs), including prohibiting the establishment, issuance, circulation, and use of CBDCs within the United States to prevent threats to financial system stability, personal privacy, and U.S. sovereignty.
Repeal Old Policies and Establish a New Framework
Repeal Executive Order 14067, issued on March 9, 2022 (Ensuring Responsible Development of Digital Assets).
The Secretary of the Treasury should immediately repeal the Department of the Treasury's International Participation Framework for Digital Assets issued on July 7, 2022.
According to this executive order, today, the U.S. Securities and Exchange Commission (SEC) officially repealed the accounting standard for crypto assets, SAB-121. SAB-121 was a guidance issued by the SEC in 2022 requiring companies holding cryptocurrencies to record these assets on their balance sheets and disclose related risks. This announcement applies to all entities regulated by the SEC, particularly banks and financial institutions, which may lead to higher capital requirements, thereby affecting their ability to provide cryptocurrency custody services.
In response, U.S. Senator Cynthia Lummis stated that the repeal of SAB-121 puts the SEC back on track. MicroStrategy founder Michael Saylor remarked that the repeal of SAB-121 allows banks to custody Bitcoin.
Establishment of the Presidential Digital Asset Market Working Group
To coordinate actions across departments, the executive order establishes the Presidential Digital Asset Market Working Group. This group is chaired by David Sacks, Special Advisor on Artificial Intelligence and Cryptocurrency, and includes heads from various departments such as the Treasury, Justice, and Commerce, including the Secretary of the Treasury, Attorney General, Secretary of Commerce, Secretary of Homeland Security, Director of the Office of Management and Budget, Assistant to the President for National Security Affairs, Assistant to the President for Economic Policy (APEP), Assistant to the President for Science and Technology, Homeland Security Advisor, SEC Chair, and CFTC Chair.
What Does the Working Group's Legislative Proposal Include?
Within 30 days of the issuance of this order, the Treasury, Justice, SEC, and other relevant agencies (whose heads include the working group leader) should identify all regulations, guidance documents, orders, or other items affecting the digital asset industry. Within 60 days of the issuance of this order, each agency should submit recommendations to the President on whether to repeal or modify each identified regulation, guidance document, order, or other item, or for items outside of regulations, to adopt them into regulations.
Within 180 days of the issuance of this order, the working group should submit a report to the President through APEP, recommending regulatory and legislative proposals to advance the policies set forth in this order, including:
1. The working group should propose a federal regulatory framework to regulate the issuance and operation of digital assets (including stablecoins) within the United States. The report should consider regulations regarding market structure, oversight, consumer protection, and risk management.
2. The working group should assess the feasibility of establishing and maintaining a national digital asset reserve and propose standards for establishing such reserves, which may come from cryptocurrencies lawfully seized by the federal government through its law enforcement actions.
The President should designate an executive director for the working group to coordinate its daily functions. In matters involving national security, the working group should consult with the National Security Council.
Where appropriate and in accordance with the law, the working group should hold public hearings and solicit input from experts in the field of digital assets and digital markets.
Prohibition of Central Bank Digital Currencies
The executive order states that, unless otherwise required by law, agencies shall not take any action to establish, issue, or promote CBDCs within or outside the United States. Additionally, any ongoing plans or initiatives related to the creation of CBDCs within the United States should be immediately terminated, and no further actions should be taken to develop or implement such plans or initiatives.
Foresight News Note: An executive order is a directive signed, written, and published by the President of the United States to manage the operations of the federal government, requiring no approval from Congress. Executive orders and announcements have the force of law but are not a law. Only the sitting President of the United States can overturn an existing executive order by issuing another executive order.
What Are the Potential Impacts?
A clear regulatory framework and government support will provide a more stable development environment for the digital asset industry, attracting more capital and talent into the field. At the same time, ordinary investors will have greater confidence in the digital asset industry due to stricter regulations and higher transparency.
Moreover, by promoting the global development of dollar stablecoins (rather than CBDCs), the U.S. will further solidify the dollar's dominant position in the international financial system, enhancing its economic influence. Meanwhile, stablecoins will usher in their own golden age, becoming an important bridge connecting traditional finance and digital finance.
It is worth noting that Trump's cryptocurrency executive order excludes the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) from the digital asset working group. The FDIC is responsible for ensuring the safety of bank deposits, and its exclusion may weaken the working group's ability to protect consumer rights and maintain financial stability. The absence of the Federal Reserve and FDIC may lead to a fragmented regulatory framework.
Regarding the establishment of a digital asset reserve, according to the executive order, the digital asset working group should assess the feasibility of establishing and maintaining a national digital asset reserve, which may come from cryptocurrencies lawfully seized by the federal government through its law enforcement actions. It has not yet been indicated that cryptocurrencies will be purchased from the open market.
Michael Saylor stated that Trump's signing of the cryptocurrency executive order marks the official launch of the crypto renaissance. This executive action not only provides clear policy guidance and strong legal support for the development of the U.S. digital asset industry but also injects new vitality and momentum into the prosperity and development of the global digital financial market. The U.S. policy adjustments in the digital asset field may trigger imitation or responses from other countries, thereby promoting regulatory coordination and cooperation on digital assets globally.
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