On Thursday, January 23, 2025, President Trump addressed the World Economic Forum in Davos, Switzerland, pledging that the United States will become “the world capital of artificial intelligence and crypto."
After his remarks, Trump signed an executive order “to establish regulatory clarity for digital financial technology and secure America’s position as the world’s leader in the digital asset economy.” In particular, the executive order establishes a Presidential Working Group on Digital Asset Markets tasked with developing a federal regulatory framework governing digital assets. The working group will include the new chair of the Securities and Exchange Commission (SEC) and the heads of other relevant departments and agencies.
The executive order revokes the Biden administration’s digital assets executive order and directs the secretary of the Treasury Department to immediately revoke its Framework for International Engagement on Digital Assets.
The order establishes the working group within the National Economic Council. A to-be-determined “special advisor for AI and crypto” will chair the working group and serve as a co-chair of the President’s Council of Advisors on Science and Technology, which was established by another executive order Trump signed on Thursday.
The working group will also include the chairs of the SEC and the Commodity Futures Trading Commission (CFTC), as well as representatives from the president’s cabinet and executive office, including delegates from the Treasury Department, U.S. Attorney General, Commerce Department, the Department of Homeland Security, Office of Management and Budget, assistant to the resident for national security affairs, assistant to the president for national economic policy, assistant to the resident for science and technology, and the homeland security advisor. The working group’s composition suggests a variety of stakeholder interests will be considered and national security will play a role in the policy agenda. In parallel, the SEC has formed a Crypto Task Force with a similar remit.
The order provides a timeline for action from the Department of Justice, the Treasury Department, the SEC, and other affected agencies with benchmarks within 30, 60, and 180 days of the order’s passage:
The report to the president will be made through Assistant to the President for National Economic Policy Kevin Hasset, a Trump Administration veteran who also directs the National Economic Council.
The order directs the working group to consider two initial priorities: (1) creating a federal regulatory framework governing the issuance and operation of digital assets, including stablecoins, in the United States; and (2) the potential creation and maintenance of a “national digital asset stockpile,” potentially derived from digital assets obtained by federal law enforcement seizures.
The first point is consistent with the policymaking perspectives of the agency leadership above, but the second point sets a new objective. Rather than just regulate digital assets, the order suggests that the federal government be an involved market participant, at least insofar as it lawfully seizes cryptocurrencies through its law enforcement efforts. This proposal will become clearer with the working group’s deliberations, but the initial public reaction was mixed.
The order prohibits agencies from “undertaking any action to establish, issue, or promote” Central Bank Digital Currencies (CBDCs), which it defines as “a form of digital money or monetary value, denominated in the national unit of account, that is a direct liability of the central bank.” The order explains its prohibition by highlighting the administration’s perception of the risks posed by CBDCs, which purportedly “threaten the stability of the financial system, individual privacy, and the sovereignty of the United States.”
The order instructs the chair of the working group to designate an executive director to be “responsible for coordinating its day-to-day functions.” This mandate provides that the working group will hold public hearings and receive industry expertise. Industry stakeholders can play an important role in shaping the working group’s identity and directing its agenda. Stakeholders should stay informed as proposed policymaking is released and offer comment when relevant.
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