By Hannah Lang and Trevor Hunnicutt
(Reuters) -U.S. President Donald Trump on Thursday ordered the creation of a cryptocurrency working group charged with proposing new regulations for digital assets and exploring the creation of a national cryptocurrency stockpile, delivering on his pledge to to quickly review US crypto policy.
The long-awaited action also ordered that banking services for crypto companies be protected, citing industry claims that US regulators have ordered lenders to cut off crypto companies from banking services – something regulators deny. The order also banned the creation of US central bank digital currencies that could compete with existing cryptocurrencies.
In another major move urged by the crypto industry, the U.S. Securities and Exchange Commission late Thursday revoked accounting guidance that had made it very expensive for some publicly traded companies to protect crypto assets on behalf of third parties. The crypto industry said guidelines had hindered the adoption of digital assets.
During his campaign, Trump tried to court cryptocurrency by promising to become a “crypto president” and promote the adoption of digital assets. That’s in stark contrast to former President Joe Biden’s regulators, who, in an effort to protect Americans from fraud and money laundering, cracked down on the industry, suing exchanges Coinbase (NASDAQ:), Binance and dozens of others. claiming they were flouting American laws. . The companies deny the allegations.
Thursday’s order was welcomed by the crypto industry, which had pushed for the new administration to send a strong signal of support during Trump’s first few days in office.
“Today’s crypto executive order marks a major change in U.S. digital asset policy,” said Nathan McCauley, CEO and co-founder of crypto firm Anchorage Digital.
“By taking a government approach to crypto, the government is taking an important first step toward writing clear, consistent rules of the road.”
If implemented by the relevant regulators, Trump’s order has the potential to push cryptocurrencies into the mainstream, say regulatory and crypto experts. It follows the SEC’s announcement on Tuesday that it was creating a task force to review crypto policy.
hit a new all-time high of $109,071 on Monday amid investor excitement over the new crypto-friendly government, though it was still only around $103,000 by late Thursday afternoon.
“Just days after taking office, President Trump is making good on his promises… to keep the United States at the forefront of digital asset innovation,” said Senator Tim Scott, the Republican chairman of the Senate Banking Committee, in a statement.
The industry has argued for years that existing U.S. regulations are inappropriate for cryptocurrencies and has called on Congress and regulators to write new rules clarifying when a crypto token is a security, a commodity or falls into another category.
The working group, which includes the Treasury Secretary, chairmen of the SEC and Commodity Futures Trading Commission, along with other agency heads, is charged with developing a regulatory framework for digital assets, according to the order. This also applies to stablecoins, a type of cryptocurrency usually pegged to the US dollar.
The group also plans to “evaluate the potential creation and maintenance of a national stockpile of digital assets… potentially derived from cryptocurrencies lawfully seized by the federal government through its law enforcement efforts.”
The order provided no further details on how such a stockpile would be set up, and analysts and legal experts are divided on whether an act by Congress will be necessary. Some have argued that the reserve could be created through the U.S. Treasury Department’s Exchange Stabilization Fund, which can be used to buy or sell foreign currencies, as well as hold bitcoin.
In December, Trump appointed venture capitalist and former PayPal (NASDAQ:) executive David Sacks as the crypto and artificial intelligence czar. He will chair the group, the order said.
