Trump Executive Order Sets Out Pro-Crypto Policy Shift

US president Donald Trump has signed an executive order setting up a cryptocurrency working group aimed at bringing in crypto-friendly policies, in a major shift from the Biden administration.

The working group is to propose new regulations on digital assets, something long asked for by the crypto industry, and is tasked with exploring the formation of a national digital currency stockpile.

The order also said banking services for crypto companies are to be protected, a measure referring to industry claims that US regulators have told lenders not to deal with crypto companies, something regulators deny.

The measure also bans the formation of central bank digital currencies that could compete with existing assets in the private sector.

‘Crypto president’

Trump criticised cryptocurrencies during his first term, but relied heavily on funding from crypto companies during his election campaign last year.

He promised to be a “crypto president” and to promote the adoption of digital tokens, with he and First Lady Melania Trump both launching their own coins to coincide with Trump’s inauguration last week.

Optimism over Trump’s policies saw Bitcoin rise over $109,000 (£87,000) in value upon the president’s inauguration, before retreating later in the week.

Under Biden, regulators had applied existing financial industry rules to crypto companies, launching more than 200 cryptocurrency-related enforcement actions since 2013, according to Cornerstone Research.

As part of the policy shift, Trump has named crypto advocates to significant positions in the administration, including Paul Atkins as head of the Securities and Exchange Commission and Cantor Fitzgerald chief executive Howard Lutnick as secretary of the Commerce Department.

Hedge fund manager Scott Bessent has been named to lead the Treasury Department, where if confirmed he would oversee the Internal Revenue Service and the Financial Crimes Enforcement Network, both key to shaping tax and compliance policies for crypto policies and US digital asset adoption.

Policy shift

The new working group is to include the Treasury secretary, chairs of the SEC and Commodity Futures Trading Commission and other agency heads.

It is to be chaired by venture capitalist and former PayPal executive David Sacks, named in December as the administration’s crypto and artificial intelligence czar, according to the order.

Morgan Stanley chief executive Ted Pick, speaking at the World Economic Forum in Davos, Switzerland, told CNBC the bank would be “working with Treasury and the other regulators” to explore how banks can support crypto transactions “in a safe way”.

The US shift on crypto policy is a setback for places such as Hong Kong, which has been working to create a crypto-friendly regulatory regime and is now likely to face more direct competition from the US.