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President Donald Trump signed an executive order to support digital financial technology on January 23, 2025. The order aims to promote innovation and create clear regulations for cryptocurrency. It replaces the previous administration’s cautious approach with a focus on economic growth.
The same day, the US Securities and Exchange Commission (SEC) announced new policies. The agency revoked rules that had discouraged banks from offering crypto custody services. Two days earlier, SEC Acting Chair Mark Uyeda introduced the SEC Crypto Task Force. The group, led by Commissioner Hester Peirce, will focus on clear regulations instead of enforcement actions.
The net new policies overtook the former strategies of identifying the potential risks that came with the digital assets. It defined requirements for various agencies like the SEC and CFTC. The order also forbids any attempt at creating a central bank digital currency for the US. Instead, it fosters the development of US dollar backed stablecoins.
The new President's Working Group on Digital Asset Markets will oversee the coordination of digital asset efforts on the federal level. The group will be headed by Special Advisor for AI and Crypto, David Sack. The group is expected to provide their policy recommendations by the time July 2025 arrives. Federal agencies are required to analyze the current regulations and propose changes at the latest by March.
The executive order ushers in the development of blockchain technology. Adequate legal provisions have also been made for software developers, miners, and blockchain validators to ensure they do not face legal consequences for their actions. It also promotes the self-custody of digital assets.
The order instructs the officials to consider the building of a strategic reserve to hold cryptocurrencies. There are some lawmakers who are in favor of the reserve being Bitcoin centric, while a portion of them think holding a wider range of cryptocurrencies as a reserve would be better.
Banks will be able to provide custody of cryptocurrencies with minimal capital requirements due to the new SEC policies, which is likely to encourage other businesses to use the digital assets.
These moves signal a major shift in US crypto policy. More regulatory clarity is expected in the coming months.
