Executive Action Targets Cryptocurrency Regulation and Central Bank Digital Currency
In a move that aligns with his campaign promises, President Donald Trump has signed an executive action addressing the cryptocurrency industry. The order establishes a presidential working group tasked with developing clear regulatory guidelines and prohibiting the creation of central bank digital currencies (CBDCs).
National Digital Asset Stockpile Assessment
While the action does not immediately authorize the creation of a national bitcoin stockpile, it directs the working group to evaluate the potential benefits and criteria for establishing such a reserve. This move broadens the scope of digital assets the government may consider holding, potentially beyond just bitcoin.
Pro-Crypto Stance and Industry Support
Trump's executive order revokes a previous directive from President Biden that emphasized risk-reduction measures for digital assets. Industry experts view the president's pro-crypto stance as a significant step towards legitimizing the industry.
Presidential Working Group and Regulatory Framework
The working group, chaired by David Sacks, will identify and review existing regulations and provide recommendations within specific timeframes. The group will develop a federal regulatory framework for crypto markets, including proposals and legislative recommendations.
SEC Guidance Rescission and Bitcoin Reserve Proposal
The SEC has rescinded a previous guidance that hindered banks and broker-dealers from holding crypto in custody for clients. Meanwhile, Coinbase CEO Brian Armstrong has suggested the creation of a strategic bitcoin reserve, citing its potential to stabilize the US economy and reduce national debt.
Congressional Approval for Further Action
While Trump can prohibit government sales of seized cryptocurrencies, further steps to purchase more crypto may require congressional approval. Senator Cynthia Lummis has proposed legislation for such a move, reflecting the ongoing debate on the role of cryptocurrencies in government reserves.