Trump’s Executive Order Signals Shift in Crypto Policy
US President Donald Trump has recently issued an executive order signaling a significant shift towards more cryptocurrency-friendly policies compared to the previous Biden administration. The executive order establishes a dedicated cryptocurrency working group responsible for proposing new regulations concerning digital assets. This move has been long-awaited by the cryptocurrency industry and is also intended to explore the possibility of creating a national digital currency reserve.
Furthermore, the executive order seeks to safeguard banking services for cryptocurrency companies, addressing concerns raised by the industry regarding US regulators discouraging financial institutions from transacting with crypto-related entities. It also prohibits the development of central bank digital currencies that may potentially compete with existing private sector assets.
Interestingly, despite his initial reservations about cryptocurrencies during his first term, President Trump seems to have made a complete turnaround, emphasizing his commitment to becoming a so-called “crypto president” and actively advocating for the mainstream adoption of digital tokens. This shift in stance was evident as both he and First Lady Melania Trump recently unveiled their own digital coins to coincide with the president’s inauguration ceremony.
The announcement of Trump’s pro-crypto policies led to a surge in the value of Bitcoin, surpassing $109,000 during the presidential inauguration, although the price receded slightly in subsequent days. In contrast, the Biden administration had previously enforced traditional financial industry rules on cryptocurrency companies, initiating over 200 enforcement actions related to cryptocurrencies since 2013, as reported by Cornerstone Research.
As part of his revised approach to cryptocurrency regulations, President Trump has appointed several crypto proponents to key positions within his administration. Notable figures include Paul Atkins as the new head of the Securities and Exchange Commission and Howard Lutnick, Chief Executive of Cantor Fitzgerald, as the Secretary of the Commerce Department. Additionally, hedge fund manager Scott Bessent has been nominated to spearhead the Treasury Department, potentially overseeing important bodies like the Internal Revenue Service and the Financial Crimes Enforcement Network, essential in shaping tax and compliance policies for digital assets in the US.
The executive order aims to form a comprehensive working group comprising the Treasury Secretary, SEC and Commodity Futures Trading Commission leaders, and other key agency officials. This group will be chaired by industry veteran David Sacks, who was appointed as the administration’s crypto and AI czar in December, indicating a concerted effort to align government policies with the needs of the rapidly evolving crypto landscape.
The executive order’s implications extend beyond the US, particularly affecting regions like Hong Kong, which had been diligently working towards establishing a crypto-friendly regulatory framework. The US’s apparent pivot towards supporting cryptocurrencies poses a significant challenge for emerging crypto-friendly jurisdictions by intensifying international competition in attracting blockchain and cryptocurrency businesses.
