President Trump Signs New Executive Order to Boost U.S. Cryptocurrency Sector
On January 23, 2025, President Trump enacted an executive order aimed at laying out the government’s strategy to foster responsible development and utilization of digital assets, blockchain, and related technologies across various economic sectors. The order highlights several main objectives, such as:
- Creating the President’s Working Group on Digital Asset Markets (the Working Group) within the National Economic Council;
- Prohibiting agencies from taking steps to create, issue, or promote central bank digital currencies;
- Encouraging the expansion of stablecoins backed by the U.S. dollar;
- Ensuring that cryptocurrency companies retain access to banking services; and
- Delivering regulatory clarity and reassurance to the crypto sector.
The Working Group will be led by venture capitalist David Sacks, previously appointed as the administration’s “Crypto and AI Czar.” It will feature a team of twelve members that includes the heads of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), the Secretaries of the Treasury and Commerce, the Attorney General, and other senior officials. The group may reach out for feedback from additional federal agencies and stakeholders, including leaders in digital assets and markets.
This Executive Order mandates the Working Group to present a report to President Trump within 180 days, proposing a detailed federal regulatory framework for digital assets, including stablecoins, and assessing the feasibility of a national “stockpile” of digital assets. President Trump has expressed interest in forming a national Bitcoin reserve, drawing from the federal government’s existing Bitcoin assets, marking an initial official move towards this goal.
The Working Group will also examine existing regulations, guidance documents, and other policies affecting the crypto space. Within a 60-day timeframe, they will offer recommendations regarding whether these regulations should be rescinded, altered, or maintained. Notably, the Executive Order reverses a component of the previous Biden administration’s crypto policy: Executive Order 14067 from March 9, 2022, detailing the former administration’s objectives for digital asset regulation. This indicates that the Trump administration is rapidly acting to eliminate perceived barriers to the widespread adoption of blockchain technology and the growth of crypto markets. By reviewing relevant policies, the Working Group will aim to advance the President’s vision of formulating actionable proposals that enhance regulatory certainty and clear guidance for market participants.
SEC Establishes New Crypto Regulatory Task Force
On January 21, 2024, Acting SEC Chairman Mark T. Uyeda unveiled the formation of a new “Crypto 2.0” task force focused on developing a well-defined regulatory landscape for cryptocurrencies. The task force will be overseen by Commissioner Hester Peirce, a known advocate for clearer regulations within the crypto realm. The SEC’s announcement criticized previous “novel and untested” legal interpretations and enforcement actions that sought to impose regulations on crypto retroactively. Instead, the Crypto 2.0 task force aims to foster a comprehensive and transparent regulatory framework while judiciously allocating enforcement resources. Collaboration with other federal and state agencies, as well as input from industry stakeholders and the public, is also part of the plan.
Pro-Crypto Appointments in Significant Positions
In the capital, the maxim “personnel is policy” rings true. President Trump’s appointees to critical regulatory roles are poised to shape his administration’s crypto policy agenda, leaning towards a more industry-friendly approach than previously seen under the Biden administration.
In his new capacity as “Crypto and AI Czar,” David Sacks plays a crucial role in guiding the administration’s crypto policies. In a social media announcement, President Trump mentioned that Sacks “will help create a legal framework for the Crypto industry, ensuring it has the clarity needed to thrive in the U.S.” As head of the crypto Working Group, Sacks is prepared to deliver on that promise. With a long history of supporting crypto innovations, Sacks is anticipated to advocate for more lenient policies that encourage industry growth within America.
The SEC has already initiated a new task force to clarify regulatory guidelines for the crypto domain. Trump has also nominated Paul Atkins to lead the SEC. Atkins, a former commissioner known for his support of cryptocurrency, has participated in advisory boards and advocacy groups focusing on blockchain technology. Compared to SEC Chair Gary Gensler from the Biden administration, who was notorious for high-profile enforcement actions against crypto firms, Atkins is expected to adopt a more balanced regulatory stance. The SEC under Atkins is likely to strive for clear rules and recommendations for the crypto space, aided by the new Crypto 2.0 task force and involvement in the crypto Working Group.
On January 27, 2025, the Senate confirmed Scott Bessent as the Secretary of the Treasury. Bessent has garnered acclaim within the crypto sector. Unlike his predecessor, Janet Yellen, who occasionally expressed doubts about cryptocurrency, Bessent is a strong advocate for blockchain and digital assets. He will play a pivotal role in shaping U.S. economic and financial policies and is expected to promote a balanced oversight approach that encourages growth and innovation in the crypto industry.
Federal Banking Regulators Expected to Reevaluate Biden Administration’s Crypto Strategies
During Biden’s time in office, federal banking regulators maintained a cautious examination of banks engaging with the crypto industry. Notably, the Federal Deposit Insurance Corporation (FDIC) recently issued “pause” letters to over 20 banks, asking them to halt crypto-related activities while the FDIC determined if further regulations would be necessary. Similarly, the Federal Reserve and Office of the Comptroller of the Currency indicated that prior approvals may be essential before banks engage with crypto assets. These policies often made it tougher for crypto firms to access banking services and deliver their offerings to consumers.
With President Trump at the helm, new leadership will emerge in key positions across federal banking agencies. On January 20, he appointed Travis Hill as acting chairman of the FDIC. Hill articulated a vision prioritizing a “more transparent approach to fintech partnerships and digital assets.” He has also mentioned the possibility of additional guidance from the FDIC, clarifying how banks can engage with crypto endeavors. Moreover, Michelle Bowman, a key contender for the Federal Reserve’s vice chair for Supervision, has shown support for greater clarity and transparency in how regulators oversee banks dealing with crypto.
The Executive Order explicitly emphasizes “fair and open access to banking services” for the crypto sector as a priority. It’s expected that Trump administration banking regulators will develop clearer guidelines for banks in their interactions with cryptocurrency (including custodial services) and collaborate with crypto firms to enhance product delivery. These officials will significantly influence the administration’s overall crypto strategy and contribute to the creation of a comprehensive regulatory framework.
Congress is Expected to Explore Crypto Legislation
House Financial Services Committee Chair French Hill and Senate Banking Committee Chair Tim Scott have expressed intentions to advance the Financial Innovation and Technology for the 21st Century Act (FIT21), a previously bipartisan-supported bill that passed through the House. This legislation would categorize cryptocurrency as a commodity, granting the CFTC exclusive authority over cash or spot markets for digital commodities, while assigning authority to the SEC when a digital asset is linked to a non-decentralized blockchain. Although it remains uncertain whether Congress will enact this bill, there is evident interest in clarifying regulations concerning crypto.
Companies Will Still Face State Regulatory Hurdles
Even with a clearer regulatory landscape from the Trump administration, the federal government is likely to continue pursuing cases involving fraud, money laundering, sanctions breaches, and other illegal activities pertaining to crypto. Additionally, companies will need to navigate the intricate web of state regulations affecting cryptocurrencies and digital assets. For instance, crypto firms operating in New York will still need to adhere to the “BitLicense” regulatory framework. California has also recently enacted its Digital Financial Assets Law, which imposes licensing requirements on various crypto companies. Many states will maintain their money transmission licensing laws applicable to digital assets.
Moreover, state attorneys general and securities regulators may step in to fill any perceived enforcement gaps in cryptocurrency cases. New York Attorney General Letitia James has been notably active in initiating enforcement actions against major crypto firms, a trend that is likely to intensify during President Trump’s second term.
Compliance Considerations and Further Steps
The anticipated reduction in regulation and enforcement during the Trump administration does not lessen the inherent risks for the crypto sector; thus, firms should uphold high compliance standards. Adhering to current laws, including anti-money laundering regulations, remains vital for crypto companies. Additionally, regulated entities must meet typical compliance obligations involving appropriate policies, procedures, training, and controls.
There is a clear push from both the executive and legislative branches of the federal government to formulate and implement a clearer blueprint that enables digital assets and blockchain technology businesses to thrive within a more certain regulatory environment. Nevertheless, achieving change requires time, and companies should consistently evaluate how their services align with both current and evolving regulations.