President Trump Boosts Blockchain and Digital Assets
In a significant policy development, President Trump issued an executive order on January 23, 2025, aimed at fortifying American leadership in digital financial technology. This order seeks to enhance the growth and responsible usage of digital assets and blockchain technology across all economic sectors. The objective is to secure the leading spot for America in the realm of the digital asset economy which spur economic opportunities and innovation.
Key Takeaways from the Executive Order
The major policy components of this executive order are:
- Protection of lawful usage of blockchain networks, digital assets self-custody, and participation in validation and mining without the fear of unlawful censorship;
- Promotion of dollar-backed stablecoins;
- Prohibition of central bank digital currencies;
- Guaranteeing fair and open access to banking services; and
- Clarity in digital assets regulation based on distinct regulatory jurisdiction boundaries.
Working Group on Digital Asset Markets
The executive order also seeks to establish a Working Group on Digital Asset Markets, led by White House AI and Crypto Czar, David Sacks. This group, consisting of key government officials and regulators, will identify regulations related to digital asset industry and offer recommendations for their review or modification. Additionally, they will provide a report to President Trump recommending legislative and regulatory measures to form a federal framework for the issuance and digital assets operation, including the potential development of a national digital asset stockpile.
Various industry leaders have reacted positively to this policy direction. WAX.io co-founder and cryptocurrency and blockchain investor, William Quigley, commended the Trump administration’s efforts towards making the United States the center for digital financial technology innovation by guaranteeing clear regulatory frameworks.
Support and Reviews from Industry Leaders
Another supporter includes Vivek Ramsar, CEO of etherealize.io, who noted this policy shift as a monumental structural change aiming to position the US as the crypto and AI capital. The executive order also annulled Executive Order 14067, issued by President Biden, which emphasized the importance of research into the prospective design and United States CBDC deployment options.
Additionally, President Trump’s executive order has removed the Department of the Treasury’s framework for international digital assets engagement. Rhett Shipp, Avant CEO, described the executive order as a signal of industry direction, emphasizing the effectiveness of stablecoins in boosting dollar adoption globally and maintaining financial privacy.
Regulatory Clarity for Crypto
Under the Biden administration, the burgeoning complaint from the crypto industry was the absence of definitive guidance on the categorisation of digital assets as commodities or securities. Changes to the enforcement practices by the Securities and Exchange Commission caused significant uproar.
The complexity of determining whether or not a cryptocurrency is a security recently manifested in a U.S. District Court hearing where Judge Amy Berman Jackson expressed disappointment over the SEC’s enforcement efforts and push for legislation.
Building a Regulatory Framework
Like-minded comments were made by U.S. District Court Judge Katherine Polk Failla during the SEC’s case against Coinbase. It was during this case that an interlocutory appeal was granted questioning certain crypto-asset transactions as investment contracts within the SEC’s regulatory jurisdiction. This represents the law’s reach over crypto-assets and the diversity of opinion.
President Trump has chosen officials with industry insight, including David Sacks, the crypto and AI czar at the White House. The expectations are for a favourable digital asset regulation accompanied by the new task force at the U.S. Securities and Exchange Commission. This task force is set to develop a crypto asset regulatory framework in collaboration with the CFTC with a focus on reducing regulatory burdens and advancing the formation of a crypto-friendly regulatory framework.
The executive order represents a doorway for considerable activities in the blockchain and crypto sector, potentially causing regulators to revise their proposals. Ava Labs General Counsel, Lee A. Schneider, expressed enthusiasm about contributing to the shaping of these proposals. Ava Labs is behind Avalanche, the fastest smart contracts platform in the blockchain landscape with a focus on low-cost, eco-friendly operations and world assets tokenization.
The Current Status of Digital Asset Regulation in the U.S.
To provide some context, the current regulation of digital assets in the U.S. includes:
| Regulation | Regulator | Status |
|---|---|---|
| ICO | SEC/CFTC | Activated |
| AML/CFT | FINCEN | Activated |
| Sanctions | OFAC | Activated |
| Tax | IRS | Activated |
