Trump Administration Signals Shift in Crypto Policy as SEC Reconsiders Enforcement Approach
By Christopher J. Bosch of Sheppard, Mullin, Richter & Hampton LLP January 27, 2025
On January 23, 2025, President Trump signed an executive order (EO) titled “Strengthening American Leadership in Digital Financial Technology.” The order establishes the Administration’s policy to back the growth and use of digital assets, blockchain technology, and related technologies across the economy.
The EO outlines five main policy objectives:
- Protecting the lawful use of blockchain networks and self-custody of digital assets.
- Promoting dollar-backed stablecoins.
- Ensuring fair and open access to banking services.
- Providing regulatory clarity for digital assets based on defined jurisdictional regulatory boundaries.
- Prohibiting Central Bank Digital Currencies (CBDCs).
The EO rescinds Executive Order 14067, issued by President Biden in March 2022, which focused on research and development of a U.S. CBDC. It also rescinds the Department of the Treasury’s “Framework for International Engagement on Digital Assets” from July 2022. A White House statement accompanying the EO highlights that the framework “suppressed innovation and undermined U.S. economic liberty and global leadership in digital finance.”
In terms of affirmative directives, the EO:
- Establishes a Working Group on Digital Asset Markets, chaired by a Special Advisor for AI and Crypto, and including key officials like the Chairman of the Securities and Exchange Commission (SEC) and the Attorney General.
- Directs the Working Group to identify current regulations, recommend modifications, and submit regulatory and legislative proposals. These proposals will focus on establishing a federal framework for digital assets, including stablecoins, as well as evaluating the potential creation of a national digital asset stockpile.
- Prohibits the development of CBDCs, which the EO claims threaten the stability of the financial system, individual privacy and the sovereignty of the United States.
The White House statement emphasizes the Trump Administration’s goals, including making the United States the center of digital financial technology innovation by halting what it considers aggressive enforcement actions and regulatory overreach. The statement seeks to ensure clear regulatory frameworks and prevent restrictive regulations from hindering the growth of digital financial technology.
Also on January 23, 2025, the SEC revoked accounting guidance, issued in 2022. This guidance required certain regulated entities to account for digital assets held for platform users as liabilities, reflecting their obligation to safeguard those assets.
Two days earlier, the SEC announced that Acting Chairman Mark Uyeda had launched a crypto task force “dedicated to developing a comprehensive and clear regulatory framework for crypto assets.” The press release noted that the SEC has primarily used enforcement actions to regulate crypto, leading to confusion and hindering innovation. The task force will aim to provide clear regulatory lines, registration paths, and disclosure frameworks.
These executive actions suggest a shift from the prior administration, aligning with a promise President Trump made at the Bitcoin 2024 conference to make the U.S. the “crypto capital of the planet.” It remains to be seen whether this shift will be implemented via enforcement, rulemaking, or new legislation. However, the crypto industry may anticipate a more favorable U.S. regulatory environment.
