Trump Signs Executive Order on Cryptocurrency, Establishes Crypto Task Force

[SuperExMedia]

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According to reports, Trump signed an executive order establishing the Presidential Digital Asset Market Task Force. The task force’s mission is to formulate a federal regulatory framework for managing digital assets, including stablecoins, and evaluate the creation of a strategic national digital asset reserve. The task force will be chaired by the White House’s “AI and Cryptocurrency Czar,” David Sacks, with members including the Treasury Secretary, the SEC Chairman, and other relevant department and agency heads.

According to the announcement released by the White House, this executive order aims to repeal multiple regulatory policies from the previous administration, including the “Digital Asset Executive Order” and the “Digital Asset International Engagement Framework.” Trump described these policies as “stumbling blocks to innovation” and emphasized that reforms are necessary to rebuild the United States’ leadership in the global digital finance sector.

Core directives of the executive order:

· All departments are required to submit recommendations to the task force regarding the repeal or modification of any regulations and agency actions that impact the digital asset sector.

· Federal agencies are prohibited from taking any actions to establish, issue, or promote central bank digital currencies (CBDCs).

· The “Digital Asset Executive Order” from the previous administration and the Treasury Department’s “Digital Asset International Engagement Framework” are revoked. These policies were criticized for stifling innovation, undermining economic freedom in the United States, and damaging the country’s global leadership in the digital finance sector.

 

Core Directives: Rejecting CBDCs and Reshaping Regulation

1）Prohibition on Promoting or Developing Central Bank Digital Currencies (CBDCs)

The Trump administration explicitly mandates in the executive order that all federal agencies are prohibited from taking any action to establish, issue, or promote CBDCs. This stance contrasts sharply with the Biden administration’s emphasis on the importance of CBDCs. During the signing ceremony, Trump stated, “CBDCs inherently pose a threat to economic freedom, as they could grant governments full control over individual economic activities. This runs counter to the core values of the United States.”

This prohibition likely stems from concerns over privacy violations and the centralization of power that CBDCs may entail. On the international stage, China’s digital yuan (e-CNY) has already emerged as a leader in the CBDC space, and the Trump administration is evidently determined not to follow a similar policy path.

2）Repealing Previous Government Policies and Reviving Free Markets

Trump has directly revoked the 2022 “Digital Asset Executive Order” issued by the Biden administration, which sought to establish a unified regulatory framework for digital assets through interagency coordination. However, Trump argued that this policy was overly complex and excessively conservative in its international engagement, leaving the U.S. at a disadvantage in terms of technological innovation and market competition.

Additionally, the Treasury Department’s “Digital Asset International Engagement Framework” was also rescinded. Trump’s team viewed this framework as not fostering international cooperation but instead imposing additional compliance burdens on domestic enterprises, thereby stifling industry vitality.

3）Presidential Digital Asset Market Task Force: An Innovation-Driven Regulatory Model

To achieve these objectives, the Trump administration has established the Presidential Digital Asset Market Task Force, chaired by David Sacks, known as the “AI and Cryptocurrency Czar.” As a seasoned Silicon Valley investor and technology leader, Sacks has long been an advocate of free markets and decentralized technologies. Under his leadership, the task force will undertake the following critical missions:

· Developing a Federal Regulatory Framework: Consolidating input from the Treasury Department, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) to create simpler and more transparent regulatory standards for the digital asset industry.

· Assessing the Feasibility of a Strategic National Digital Asset Reserve: While not completely ruling out a national digital asset initiative, the Trump administration proposes exploring the inclusion of Bitcoin or other digital assets in a national strategic reserve.

· Promoting Private Sector Innovation: Supporting startups and tech companies by reducing unnecessary regulatory restrictions to facilitate rapid development.

Market Reactions and International Impact

Wall Street Cheers, Technology Sector Divided
After the executive order was announced, Wall Street responded positively, with major cryptocurrencies such as Bitcoin and Ethereum seeing significant price surges. Analysts believe that removing burdensome regulations will greatly encourage capital inflow into the U.S. market.

However, the tech sector’s reaction has been more nuanced. While many entrepreneurs support the removal of complex regulations, some experts have raised concerns about the ban on CBDCs. They argue that this policy could undermine the competitiveness of the U.S. dollar in digital payments, particularly in international trade settlements.

Changes in the International Competitive Landscape
The policy adjustments made by the Trump administration could have far-reaching effects on the global digital asset market. Regions like China and the European Union have taken more proactive approaches to CBDC and cryptocurrency regulation, and the U.S. withdrawal may open up greater market leadership opportunities for other countries. However, by removing restrictive policies, the Trump administration aims to attract more businesses to move their research and capital back to the U.S., potentially reinforcing America’s technological and market dominance in the medium to long term.

Strategic Considerations Behind the Policy

Redefining Economic Freedom
The core of Trump’s policy is to reaffirm the importance of economic freedom and decentralization. He believes that the value of blockchain and cryptocurrency lies in distributed trust mechanisms and individual autonomy. CBDCs, on the other hand, could undermine this ecosystem, making the government the sole “center of trust.”

Prioritizing U.S. Economic Interests
Trump clearly hopes that the executive order will draw global capital back to the U.S. and stimulate economic growth in the digital asset sector. During the signing ceremony, he stated, “We will not tolerate any policies that hinder innovation. The United States will become the safest, freest, and most prosperous digital asset market in the world.”

The executive order signed by Trump undoubtedly provides a boost to the U.S. digital asset market. However, the success of the policy will depend not only on the goals set but also on the details of its implementation and the market’s actual response. It is foreseeable that global competition in the digital asset field will intensify in the coming years, and whether the Trump administration can achieve its goal of “Making America Great Again” through this policy remains to be seen.