President Donald Trump signed an executive order on Thursday night aimed at advancing government regulation of cryptocurrency, with the goal of positioning the U.S. as the “crypto capital of the planet.”
The order creates a cryptocurrency working group to propose new regulations for digital assets and explore the creation of a national cryptocurrency stockpile.
This executive action is expected to bring cryptocurrencies like Bitcoin into the mainstream, potentially allowing them to be used for payments just like credit and debit cards.
Amy Lynch, a former regulator with the U.S. Securities and Exchange Commission and founder of financial consulting firm FrontLine Compliance, told, “This means that cryptocurrency and digital assets are being given legitimacy by our federal government.
Once regulation is in place and the new executive orders are carried out (if not altered significantly by the Working Group), cryptocurrency transactions in the USA will multiply exponentially.”
Financial regulation professor Yesha Yadav from Vanderbilt Law School also highlighted the benefits, saying that regulation will provide “a massive relief for everyday crypto users,” offering “a workable, reliable, thoughtful set of guardrails” to protect participants in the crypto market.
The order establishes a Digital Asset Markets working group, which includes the Treasury secretary (nominee Scott Bessent), White House A.I. and Crypto Czar David Sacks, and the chairman of the Securities and Exchange Commission (nominee Paul Atkins), along with other relevant agency heads.
The group will work on developing a regulatory framework for digital assets, including stablecoins, a type of cryptocurrency typically pegged to the U.S. dollar.
For crypto investors, the lack of basic protection has been a significant concern. Yadav pointed out that this has been “very, very costly” for people using assets like stablecoins, who have had to deal with uncertainty about whether the assets backing the coins are actually there.
Another important task for the working group will be to investigate the creation of a digital stockpile, which could include assets “potentially derived from cryptocurrencies lawfully seized by the federal government through law enforcement efforts.” This reserve would treat cryptocurrencies as commodities, similar to gold, according to Lynch.
However, the idea of the U.S. buying or selling cryptocurrencies, including Bitcoin (which the government currently holds nearly $20 billion worth of due to legal seizures), remains a debated topic. Yadav noted that whether the U.S. should stockpile cryptocurrencies like Bitcoin or other digital assets is still an open question.
Trump’s executive order ends with a statement emphasizing that “the growth of digital financial technology in America must remain unhindered by restrictive regulations or unnecessary government interference.”
This new order marks a reversal of the 2022 executive order issued by the Biden administration, which sought to foster the growth of cryptocurrencies and explore the creation of a Federal Reserve digital currency.
The crypto industry had criticized the Biden administration for being anti-crypto, with many calling for clearer regulations regarding the classification of crypto tokens as securities, commodities, or another category. The Biden administration, however, argued that its actions against certain crypto exchanges were due to violations of securities laws.
Yadav explained that the Biden administration’s regulatory framework “never happened,” pointing to the 2022 collapse of the FTX cryptocurrency exchange as an example of the consequences of a lack of action, which led to the loss of at least $1 billion for customers.
Trump was initially not a supporter of cryptocurrency. In 2019, he posted on X that he was “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
However, Trump’s stance has shifted, partly due to support for crypto from Republicans and pro-crypto donations to his re-election campaign. Additionally, Trump has entered the crypto business himself, issuing digital trading cards, or non-fungible tokens (NFTs), and more recently releasing meme coins, which are also traded as cryptocurrencies.
Lynch noted, “The new $TRUMP and $MELANIA coins are evidence that the new President fully backs the use and issuance of cryptocurrencies. These coins are also another way for the president and his family to monetize the industry to their financial benefit.”
The executive order has been hailed as a “sea change” by the crypto industry. Nathan McCauley, CEO and co-founder of Anchorage Digital, a crypto company, told, “Today’s crypto executive order marks a sea change in U.S. digital asset policy.” Major banks also see the order as a step toward making cryptocurrency transactions easier for consumers.
Bank of America CEO Brian Moynihan told from the World Economic Forum in Davos, Switzerland, that if regulations make cryptocurrency “a real thing” to do business with, banks will fully embrace it.
However, not everyone is as enthusiastic about crypto. Anne Walsh, chief investment officer at Guggenheim Partners, stated, “I am not an advocate, nor a critic… it is not what it was supposed to be, which was an alternative to banking.”
She went on to explain that she views crypto more as a “risk-on appetite indicator” akin to the Nasdaq rather than a viable alternative to traditional banking.