Trump Signs Executive Order Creating Cryptocurrency Working Group and Banning Central Bank Digital Currencies

U.S. President Donald Trump has issued an executive order establishing a cryptocurrency working group to propose a regulatory framework for digital assets and explore the possibility of creating a national cryptocurrency stockpile. This highly anticipated action also mandates the protection of banking services for crypto companies, addressing longstanding industry complaints that regulators have pressured banks to sever ties with crypto firms—claims that regulators have denied.

In addition, the order explicitly bans the creation of central bank digital currencies (CBDCs) in the United States, ensuring that no such state-backed digital currency would compete with existing cryptocurrencies. This decision underscores the administration’s focus on fostering a decentralized approach to digital assets.

During his campaign, Trump made a point of courting cryptocurrency supporters, promising to be a “crypto president” and encouraging the growth of digital assets. His stance stands in stark contrast to the policies of former President Joe Biden’s administration, which pursued legal action against major crypto exchanges, including Coinbase and Binance, alleging violations of U.S. laws related to fraud and money laundering. The companies have denied the allegations.

The crypto industry has welcomed Trump’s move, viewing it as a signal of strong support just days into his administration. Nathan McCauley, CEO and co-founder of Anchorage Digital, expressed enthusiasm for the initiative, stating, “Today’s crypto executive order marks a sea change in U.S. digital asset policy. By taking a whole-of-government approach to crypto, the Administration is making a significant first step toward writing clear, consistent rules of the road.”

If implemented effectively by relevant regulators, the order could pave the way for cryptocurrencies to enter the financial mainstream, according to regulatory and crypto industry experts. The announcement closely follows a recent statement from the U.S. Securities and Exchange Commission (SEC), which on Tuesday revealed plans to establish a task force dedicated to overhauling crypto policy.

The order’s announcement coincided with market activity, as Bitcoin reached a new record high of $109,071 on Monday, driven by investor optimism over the crypto-friendly administration. By late Thursday afternoon, Bitcoin had settled at approximately $103,000.

“Just days into his administration, President Trump is delivering on his promises… to keep the United States a leader in digital assets innovation,” said Senator Tim Scott, the Republican chair of the Senate Banking Committee, in a statement supporting the order.

The crypto industry has long argued that current U.S. regulations are ill-suited for digital assets and have pushed for new legislation to clarify when a cryptocurrency token is classified as a security, commodity, or falls under another category. The working group, created by Trump’s order, will include the Treasury secretary, the chairs of the SEC and the Commodity Futures Trading Commission, and other agency heads. Their task will be to develop a regulatory framework for digital assets, including stablecoins, which are cryptocurrencies typically pegged to the U.S. dollar.

The executive order also instructs the group to assess the feasibility of creating and maintaining a national digital asset stockpile. This stockpile would potentially consist of cryptocurrencies lawfully seized by federal law enforcement. However, details on how the stockpile would be structured remain unclear, and analysts are divided on whether an act of Congress would be required. Some experts believe that the U.S. Treasury’s Exchange Stabilization Fund could be utilized to establish the reserve, allowing it to purchase or hold foreign currencies, including Bitcoin.

In December, Trump appointed venture capitalist and former PayPal executive David Sacks as the administration’s crypto and artificial intelligence czar. According to the executive order, Sacks will chair the newly formed working group as part of this effort to align the United States with the evolving digital asset landscape.

By fLEXI tEAM