Last week, a new Executive Order (EO), formally titled “Strengthening American Leadership in Digital Financial Technology,” was released, establishing the current administration’s approach to digital asset technologies and the broader growth of blockchain technologies.
Key Directives of the Executive Order
The EO outlines four primary directives:
Policy Direction
The EO’s central focus is on promoting the lawful use of public blockchains and digital assets by individuals and companies without facing persecution. It also emphasizes preserving U.S. dollar sovereignty, including through U.S. dollar-backed stablecoins. Other crucial elements include enabling participation in digital asset mining, validation, and self-custody, while providing regulatory clarity and guaranteeing open access to banking services for businesses and individuals involved in digital asset activities.
CBDC Prohibition
The EO directs all agencies to immediately halt any existing plans or initiatives related to creating Central Bank Digital Currencies (CBDCs). Significantly, it further prohibits any action to establish, issue, or promote CBDCs within the United States or internationally. The EO defines a CBDC as “a form of digital money, denominated in the national unit of account, which is a direct liability of the central bank”, justifying the prohibition based on the associated risks, as CBDCs, according to the order, “threaten the stability of the financial system, individual privacy, and the sovereignty of the United States.”
Prior Guidance Revocation
To align with the new EO, the document revokes Executive Order 14067 from March 9, 2022. This earlier order covered directives for evaluating digital asset-related risks, with a focus on anti-money laundering and consumer protection. It also included exploring the merits of a U.S.-issued CBDC through research. Furthermore, the EO also revoked the Department of the Treasury’s Framework for International Engagement on Digital Assets from July 7, 2022, which addressed “interagency engagement with foreign counterparts and in international fora” and which was developed pursuant to Executive Order 14067. The EO then orders the Secretary of the Treasury to rescind all relevant policies, directives, and guidance that were issued because of Executive Order 14067 and the resulting framework published by the Department of Treasury.
Establishment of a Working Group
The EO establishes the President’s Working Group on Digital Asset Markets (Working Group) within the National Economic Council. The Working Group will be chaired by the White House Special Advisor for AI and Crypto, also known as the Crypto Czar (Chair), and includes officials from various federal agencies. These agencies include the Secretary of the Treasury, the Chairman of the Securities and Exchange Commission, and the Chairman of the Commodity Futures Trading Commission.
Notably, the Working Group does not include participants from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the Office of the Comptroller of the Currency. Given the EO’s specific focus on stablecoins and ensuring digital asset industry access to banking services, this may be considered unusual.
The EO outlines three deliverables for the Working Group:
- Identify Digital Asset Policies: Within 30 days of the EO (by February 22, 2025), the Department of the Treasury, Department of Justice, the Securities and Exchange Commission, and other agencies in the Working Group are instructed to identify all regulations, guidance documents, and orders that affect the digital asset sector (Digital Asset Policies).
- Digital Asset Policies Recommendations: Within 60 days of the EO (by March 24, 2025), the Department of the Treasury, Department of Justice, Securities and Exchange Commission, and other agencies in the Working Group must submit recommendations to the Chair. These recommendations will cover whether to rescind, modify, or adopt existing Digital Asset Policies as formal regulations.
- Digital Asset Proposals: Within 180 days of the EO’s issuance (by July 22, 2025), the Working Group will propose a recommended federal legislative and regulatory framework supporting the EO’s policy goals for digital assets, including stablecoins, in the United States. The proposal must address (i) market structure, oversight, consumer protection, and risk management for the issuance and operation of digital assets, and (ii) the merits of and potential criteria for creating and maintaining a “digital asset stockpile,” often referenced as a strategic reserve of digital assets, and whether this should include digital assets lawfully seized through federal law enforcement.
The EO represents a significant shift in the federal government’s approach to the digital asset industry. Further developments are anticipated in the coming weeks and months. We will continue to follow the EO’s implementation and the Working Group’s activities.
