Trump Administration Outlines New Approach to Crypto Regulation
On February 4, 2025, David Sacks, President Trump’s newly appointed Crypto Czar, presented the administration’s strategy for cryptocurrency regulation during a press conference on Capitol Hill. The announcement, attended by key congressional leaders, signals a concerted effort to establish a comprehensive regulatory framework designed to encourage innovation in the digital asset space while ensuring market stability.
Sacks was joined by several influential members of Congress, highlighting the collaborative nature of this initiative. These included Senate Banking Committee Chairman Tim Scott (R-SC), Senate Agriculture Committee Chairman John Boozman (R-AR), House Agriculture Committee Chairman Glenn “GT” Thompson (R-PA), and House Financial Services Committee Chairman French Hill (R-AR). This bipartisan representation underscored the shared commitment to shaping the future of digital assets.
Key Components of the New Crypto Strategy
Several key points emerged from the press conference, indicating the direction of the administration’s approach:
- Bicameral Crypto Committee: A joint committee, comprising members from the Senate Banking Committee, Senate Agriculture Committee, House Agriculture Committee, and House Financial Services Committee, will be formed. This committee will serve as the primary body shaping crypto-related legislation.
- Stablecoin Bill: A top priority for the committee is the creation of a bill focused on stablecoins. Senator Bill Hagerty (R-TN) has already introduced legislation to serve as a foundation for this effort.
- Regulatory Framework for Digital Assets: The committee aims to develop a federal regulatory framework for digital assets, building upon Senator Hagerty’s stablecoin bill and the Financial Innovation and Technology for the 21st Century Act (FIT21).
- Bitcoin Reserve Evaluation: The Presidential Working Group on Digital Assets Markets will evaluate the feasibility of a Bitcoin reserve.
Senator Tim Scott emphasized his aim to get bills through the Senate within the first 100 days of the new administration.
Fostering Innovation and Market Integrity
The overarching goal of these initiatives is to establish a clear and comprehensive regulatory framework that encourages U.S. innovation and market integrity. Sacks opened the conference by referencing President Trump’s recent Executive Order on cryptocurrency and digital assets, which, according to Sacks, stated that the administration’s policy is “to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.”
Sacks highlighted that the new bicameral committee is designed to propose a federal regulatory framework for digital assets, especially stablecoins. Acknowledging regulatory clarity as the foremost challenge for fintech companies, Sacks criticized the previous administration’s perceived “arbitrary prosecution and persecution of crypto companies.” He stressed the need to “keep [innovation] onshore,” arguing that it would better protect consumers and allow regulators to more effectively supervise digital asset activity.
Congressional Perspectives
Several members of Congress expanded on the administration’s core tenets:
- Senator Tim Scott: He expressed his excitement for a synergistic approach between the House, Senate, and White House. Senator Scott emphasized the importance of making it easier and less expensive to do business in the United States, envisioning the democratization of financial technology.
- Representative French Hill: Representative Hill stressed the need for clarity for company founders, reminding the audience that the United States should not fall behind in financial technology and assets. He commended the bipartisan support for FIT21.
- Senator John Boozman: He noted the unique jurisdictional challenges, as the Agriculture Committees have oversight over the Commodity Futures Trading Commission (CFTC), and some digital assets may be commodities and some may be securities. He stressed the importance of collaboration with the White House and the new Crypto Czar.
- Representative GT Thompson: He reiterated that America must lead in Internet 3.0, “the internet of value.” Rep. Thompson outlined the subcommittee’s priorities: protecting consumers, providing regulatory structure and clarity, along with fostering innovation.
Looking Ahead
During a Q&A session, the following insights emerged:
- Anticipated Legislation: Representatives Hill and Thompson emphasized that FIT21 and Senator Hagerty’s proposed legislation will provide the basics for future bills.
- Regulatory Approach: The new government is also looking at the security aspects of market regulation and stablecoins and considers them no different from when lawmakers consider any other financial transfer methods.
- Member Outreach: Representative Thompson and Hill both highlighted the importance of educating members of Congress on digital assets. Sacks also expressed a need to ‘demystify’ crypto.
- Bitcoin Reserve: The Crypto Working Group is working on evaluating bitcoin reserve, with the process not beginning until some Cabinet members are confirmed.
The press conference provided a clearer understanding of the policymakers driving digital asset regulation, their goals, and prospective next steps. Further developments on Executive branch initiatives and congressional actions regarding crypto regulation will be closely followed.
