In a bold move to reposition the United States as a global leader in the crypto space and blockchain technology, President Donald J. Trump signed an executive order outlining a comprehensive plan for the future of digital finance in America (hereinafter “Order”). The order emphasizes innovation, regulatory clarity, and the protection of economic liberty, promising a hopeful future for cryptocurrency in the United States at last. It is the latest in a flurry of crypto activity by the US government.
Promoting U.S. Leadership in Finance
The executive order recognizes the vital role digital assets play in driving innovation and economic development. It sets a clear vision for supporting blockchain technology and related innovations across all sectors of the economy. The policies aim to ensure the United States remains at the forefront of financial technology by promoting the following principles:
- Economic Liberty and Blockchain Access: Citizens and businesses are guaranteed the right to access and use open public blockchain networks for lawful purposes. This includes developing software, participating in mining, transacting freely, and maintaining self-custody of digital assets without undue interference or censorship.
- Support for Dollar-Backed Stablecoins: To strengthen the sovereignty of the U.S. dollar, the administration will promote the development of legitimate dollar-backed stablecoins as a key component of the global financial system. Whether this involves issuing a new stablecoin or endorsing an existing one is yet to be determined, but the Order recognizes that dollar-backed stablecoins are a necessary tool to maintain the US dollar’s dominance in a blockchain-based future.
- Fair Access to Banking Services: The Order underscores the importance of ensuring that all law-abiding individuals and entities have equal access to banking services, removing unnecessary barriers for participants in the digital asset space. This is a clear nod to abolishing Operation Chokepoint 2.0, whereby regulators engage in coordinated efforts to limit banking access for certain industries, including cryptocurrency.
- Regulatory Clarity: The administration seeks to create transparent, technology-neutral regulations that foster innovation while providing clear jurisdictional boundaries and protecting consumers. The Order recognizes that established regulations will once again invite entrepreneurs to build in the United States under a clear framework.
- Prohibition of Central Bank Digital Currencies: The Order takes a firm stance against CBDCs, citing concerns over privacy, financial stability, and national sovereignty. It explicitly prohibits their establishment, issuance, or use within the U.S. This comes as a relief to those concerned with the unchecked power a CBDC provides the government.
Out with the Old: A New Vision for Digital Assets Policy
The Order rescinds Executive Order 14067 of March 9, 2022, and the Department of the Treasury’s “Framework for International Engagement on Digital Assets” issued in July 2022. These previous policies are deemed inconsistent with the new administration’s vision for digital assets as unduly stifling to innovation within the sector.
To guide the implementation of a new framework, the Order establishes a President’s Working Group on Digital Asset Markets. The group will be led by AI and Crypto Czar David Sacks and consist of other senior officials from key federal agencies, including the Treasury, Justice Department, and Securities and Exchange Commission (SEC).
The Order encourages collaboration with industry leaders, academics, and stakeholders through public hearings to ensure the group’s findings reflect the best practices and expertise from the digital asset community.
To ensure this burgeoning industry gets the attention it deserves, the PWG on Digital Assets is subject to a series of deadlines. Within 30 days of the Order, the group must “identify all regulations, guidance documents, orders, or other items that affect the digital asset sector.” Within 60 days, each agency must make recommended adjustments, adoptions, or revocations of regulations surrounding digital assets.
Finally, the President’s Working Group on Digital Asset must submit a detailed report to the President within 180 days of the Order recommending regulatory and legislative proposals.
The Order directs the report to focus on “propos[ing] a Federal regulatory framework governing the issuance and operation of digital assets, including stablecoins” that includes “provisions for market structure, oversight, consumer protection, and risk management.”
The Order also prescribes that the report “evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile.” The Order suggested the reserve “potentially” be composed of “cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.”
Despite many industry participants’ hopes that the President would create a strategic bitcoin reserve via executive order, Congressional control over the purse strings precludes any such act. And while many expected the President to issue an order preventing the United States from selling seized digital assets, such as those from the Silk Road, the President’s suggestion that seized assets instead form part of a reserve is at least a step in the right direction.
Whether the group ultimately decides a strategic reserve is in the nation’s best interest, and whether Congress ultimately agrees, is yet to be determined. However, the growing support around a strategic digital asset reserve, particularly from the President, evidences the technology’s potential to impact the everyday lives of Americans.
The Future of Crypto in the U.S.
While the Order does not establish any new regulations beyond the prohibition of CBDCs, it represents a significant shift in U.S. policy on digital assets and a promising step forward. By prioritizing regulatory clarity and appointing pro-crypto leaders to guide policy development, the Order signals a commitment to fostering innovation and establishing the United States as a global leader in cryptocurrency and blockchain technology.
By rejecting CBDCs and championing blockchain innovation, the administration seeks to enhance economic liberty while strengthening the U.S. dollar’s position as the global reserve currency. The move provides a much-needed boost to the digital asset industry, offering regulatory clarity and fostering innovation domestically after years of suppression.
As the policies outlined in the Order take shape, the United States is poised to reclaim its leadership in the global digital economy, attracting investment, driving innovation, and securing its financial future in a digital world.
Staying informed and compliant in this evolving landscape is more critical than ever. Whether you are an investor, entrepreneur, or business involved in cryptocurrency, our team is here to provide the legal counsel needed to navigate these exciting developments. If you believe we can assist, schedule a consultation here.