Trump Orders Crypto Review: Working Group to Evaluate Stockpile

President Trump Announces New Crypto Regulations

On Thursday, President Donald Trump initiated the creation of a dedicated working group. This group is tasked with formulating federal regulations concerning digital assets, encompassing cryptocurrencies, digital tokens, and stablecoins. Furthermore, the possibility of establishing a national cryptocurrency reserve is under evaluation.

Leadership and Composition of the Working Group

David Sacks, a former PayPal COO and founder of Craft Ventures, has been selected by President Trump to serve as the “czar” overseeing both crypto and AI initiatives. He will lead the newly formed working group. The group’s membership will also include key figures such as the Treasury Secretary, the Attorney General, and the Secretary of Commerce, alongside other high-ranking officials.

SEC and Regulatory Developments

This executive order, formally titled “Strengthening American Leadership in Digital Financial Technology,” was issued just two days after the Securities and Exchange Commission (SEC) – currently under the leadership of Mark Uyeda, who is considered crypto-friendly – established a crypto task force. The SEC task force aims to establish definitive regulatory lines for the cryptocurrency market. Uyeda will also participate in the presidential working group.

Contrast with Previous Administration

Gary Gensler, a former SEC Chair, was known within the crypto community for advocating for more stringent cryptocurrency regulations.

Protecting Blockchain Rights

President Trump’s order explicitly safeguards the rights of individuals to access, utilize, develop, and engage in transactions on public blockchains. This action effectively establishes formal legal protection for blockchain-related activities.

Reversal of Biden-Era Policies

The executive order signed on Thursday rescinds existing rules pertaining to cryptocurrencies and digital assets that were implemented during the Biden administration. Specifically, it nullifies a 2022 executive order from former President Joe Biden. That prior order focused on mitigating the risks and capitalizing on the potential benefits of digital assets and blockchain technology, while prioritizing consumer and investor protection. Additionally, Trump’s order revokes a 2022 framework published by the Treasury Department concerning international collaboration in crypto and blockchain development.

Shifting Priorities: Liberty and Sovereignty

While the Biden administration’s policies emphasized risk management and international cooperation, President Trump’s order prioritizes economic freedom and U.S. national sovereignty.

CBDC Prohibition and Stablecoin Promotion

A significant divergence from the previous administration is the prohibition of a U.S. Central Bank Digital Currency (CBDC). This means the government will not create a digital dollar directly controlled by the central bank. Conversely, the order actively promotes privately issued U.S. dollar-backed stablecoins, with the intention of reinforcing the dollar’s position in global commerce and digital finance.

Decentralization Commitment

Essentially, President Trump is demonstrating a commitment to maintaining cryptocurrencies within a decentralized financial framework.

The $TRUMP Memecoin

Notably, President Trump launched a memecoin, $TRUMP, in the days leading up to his inauguration. As of Thursday afternoon, the memecoin had reached a market capitalization of $6.84 billion. Concerns have been raised by critics regarding the potential for conflicts of interest between the president’s political and business ventures, and some suggest the token exhibits characteristics of a pump-and-dump scheme.

Historical Concerns and Illicit Activities

Past administrations have approached the cryptocurrency landscape with caution, recognizing its potential for misuse in illegal activities such as ransomware payments and money laundering. The collapse of the FTX cryptocurrency exchange serves as a stark example of the risks associated with the crypto market, revealing substantial fraud, misappropriation of customer funds, and insufficient regulatory oversight.

The Need for Clear Regulation

Many within the cryptocurrency industry contend that the FTX failure underscores the necessity for clearer, industry-specific regulations. Companies like Chainalysis are actively working to enhance trust in crypto by providing compliance and investigative tools, and by tracking virtual currencies.