The Trump administration signed its first executive order on cryptocurrency on January 24.
This long-awaited move comes after months of speculation on whether Trump would act on “cryptocurrency” after entering office, especially since he had not mentioned cryptocurrency during the executive orders or speeches he delivered on his first day in office. While this executive order is a step forward for the digital asset industry and makes it easier for U.S. residents to participate in industry activities, it raises questions about whether it delivers on the high hopes many enthusiasts had for crypto during this Trump presidency.
Breaking down the key points of the crypto executive order
The executive order, titled “Strengthening American Leadership in Digital Financial Technology,” frames the digital asset industry as crucial to U.S. innovation, economic growth, and international leadership and then outlines five major mandates aimed at bolstering the cryptocurrency space:
1. Legal protection for blockchain participants: U.S. residents are guaranteed the right to use public blockchains and mine or validate cryptocurrency without fear of prosecution.
2. Support for dollar-backed stablecoins: The administration commits to promoting the growth of U.S. dollar-backed stablecoins, signaling a clear preference for domestically developed digital currencies.
3. Access to banking for crypto users and businesses: Banks in the U.S. can provide services to those involved in cryptocurrency, addressing a long-standing challenge faced by many businesses in the industry.
4. Clear regulatory frameworks for digital assets: The order promises more structured and transparent regulations for the blockchain and cryptocurrency industry.
5. Ban on central bank digital currencies (CBDCs): The U.S. has prohibited the creation and circulation of CBDCs, allowing the privately issued stablecoins alluded to in mandate #2 to thrive.
Additionally, the order revokes the Treasury Department’s 2022 “Framework for International Engagement on Digital Assets,” which focused on consumer protection and restricted participation in many aspects of the crypto industry, especially financially. Lastly, the order establishes a Presidential Working Group on Digital Asset Markets tasked with evaluating the potential creation of a national digital asset stockpile.
The national digital asset stockpile
One of the most anticipated points in the executive order relates to the potential creation of a national digital asset stockpile. Many in the industry initially anticipated an announcement about a strategic Bitcoin stockpile. However, the language in the order—”digital asset”—suggests something different from a Bitcoin reserve.
Rather than continuous market purchases of BTC, which many people initially expected when Trump first mentioned a strategic national Bitcoin stockpile at the BTC 2024 conference in Nashville, the stockpile referred to in the executive order would be derived from digital assets lawfully seized by the federal government. Compared to market-buying BTC, this approach falls short in terms of the market impact that active accumulation through purchases would have had. While some people celebrate this language in the executive order as a win, others are disappointed by this alteration.
Retail investors overlooked in Trump’s crypto executive order
Despite its far-reaching implications, the executive order offers little for retail investors—the community that has historically driven the growth of the crypto industry. All the order does for this group is assure them they can trade and launch new crypto projects without legal repercussions. However, the mandates mostly seem more focused on institutional and corporate players.
Retail investors, who played a crucial role in building the industry and getting it to where it is today, are left with little more than the hope that the new policies will indirectly benefit them by pumping their bags, which is much different from the expectations people had regarding policies that would help the industry mature under the Trump administration.
Banks and U.S. crypto firms emerge as biggest winners
The biggest beneficiaries of this executive order will be the banks and U.S.-based cryptocurrency companies. The order grants U.S. financial institutions the freedom to engage with public blockchains without regulatory fears, unlocking new opportunities for partnerships and client acquisition. Cryptocurrency companies in the U.S. now have assured access to banking services, solving a significant bottleneck that many companies previously faced. By explicitly supporting U.S. dollar-backed stablecoins and banning CBDCs, the order ensures that private U.S.-based companies like Circle maintain dominance in the space, avoiding competition from government-issued digital currencies.
As a result, these mandates create a more lucrative environment for U.S.-based banks and crypto firms, enabling them to operate with fewer restrictions and capture a larger share of what will be a growing market under the Trump administration.
Trump’s crypto vision favors corporations over crypto community
Trump recently said that he wants the U.S. to be the “AI and Crypto capital of the world,” but it’s becoming clear that he meant this in regard to the interests of Wall Street and corporate America rather than the interests of the crypto community. This executive order appears to prioritize business interests and market speculation over grassroots innovation led by the retail participants who made cryptocurrency what it is today.
As time passes, we will most likely see long-time crypto enthusiasts who dedicated years to supporting and growing this industry finding themselves at odds with the direction the Trump administration is taking crypto. While this executive order marks progress in several areas of the industry, it also serves as a reminder that policymakers’ priorities will always trump the priorities and concerns of the communities they claim to support.
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