Trump’s Executive Order Signals a New Era for Digital Assets
In a move that has sent ripples through the digital asset world, President Trump issued an executive order on January 31, 2025, titled “Strengthening American Leadership in Digital Financial Technology.” This order (EO) lays out the administration’s strategy to foster the growth of digital asset technologies and blockchain, marking a significant turning point in the federal government’s approach to this sector.
The EO’s accompanying fact sheet is available for review.
Key Directives of the Executive Order
The EO comprises four primary directives:
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Policy Direction: The order clearly states the administration’s intent to promote the lawful use of public blockchain networks and digital assets by individuals and companies without fear of persecution. It aims to protect U.S. dollar sovereignty, including through U.S. dollar-backed stablecoins, and to ensure participation in activities like mining, validating, and self-custody of digital assets. Additionally, it seeks regulatory clarity and open access to banking services for digital asset businesses.
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CBDC Prohibition: Perhaps the most striking element of the EO is its directive to halt all initiatives related to Central Bank Digital Currencies (CBDCs). Any agency is now prohibited from taking any action to establish, issue, or promote CBDCs within the U.S. or globally. The EO defines a CBDC as “a form of digital money or monetary value, denominated in the national unit of account, which is a direct liability of the central bank,” citing concerns that CBDCs could threaten financial stability, individual privacy, and U.S. sovereignty.
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Prior Guidance Revocation: To align with the new policy direction, the EO revokes Executive Order 14067 from March 9, 2022, which included directives to evaluate digital asset-related risks and explore the merits of a U.S.-issued CBDC. The EO also rescinds the Department of the Treasury’s Framework for International Engagement on Digital Assets from July 7, 2022. Furthermore, the EO instructs the Secretary of the Treasury to eliminate all policies, directives, and guidance issued under the revoked Executive Order 14067 and the resulting framework published by the Department of Treasury.
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Establishment of a Working Group: The EO establishes the President’s Working Group on Digital Asset Markets (Working Group) within the National Economic Council. This Working Group, chaired by the White House Special Advisor for AI and Crypto (also referred to as the Crypto Czar), will include officials from various federal agencies, such as the Secretary of the Treasury and the Chairs of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Notably, in light of the EO’s focus on stablecoins and banking access for digital assets, the Working Group does not include representatives from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the Office of the Comptroller of the Currency.
The EO tasks the Working Group with three specific deliverables:
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Identification of Digital Asset Policies: Within 30 days of the EO (by February 22, 2025), the Treasury Department, Department of Justice, SEC, and other agencies within the Working Group are required to identify all existing regulations, guidance documents, and orders affecting the digital asset sector.
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Recommendations on Digital Asset Policies: Within 60 days of the EO (by March 24, 2025), the Working Group agencies must submit recommendations to the Chair regarding whether to rescind, modify, or adopt into regulation the identified Digital Asset Policies.
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Digital Asset Proposals: Within 180 days of the EO (by July 29, 2025), the Working Group will propose a federal legislative and regulatory framework supporting the EO’s policy goals for digital assets, including stablecoins, in the United States. The proposal must address market structure, oversight, consumer protection, and risk management for digital assets. It also includes the consideration of a “digital asset stockpile,” often interpreted as a strategic reserve of digital assets, and whether such a stockpile should incorporate assets lawfully seized through federal law enforcement.
What to Expect Next
The executive order represents a considerable shift in the federal government’s position on digital assets, and further actions are expected in the coming weeks and months. The implementation of the EO and the Working Group’s activities will be closely monitored. Stay tuned for further updates on this developing story.
