Trump EO on digital currency welcomes innovation in cryptocurrency

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President Trump today signed a pro-digital currency executive order establishing a President's Working Group on Digital Asset Markets, within the National Economic Council, aimed at supporting innovation and providing regulatory clarity for digital currencies and related technology. CEI Director of Finance Policy John Berlau praised the move.

President Trump's new executive order on "Strengthening American Leadership in Digital Financial Technology" sets out an approach to a regulatory framework that welcomes innovation in cryptocurrency and - from the EO's own words - "permissionless blockchains." This approach stands in sharp contrast to the whole-of-government anti-crypto agenda of the Biden administration in which the SEC launched punitive regulation-by-enforcement against legitimate crypto firms, and bank regulators such as the FDIC pressed traditional financial institutions to cut off services to individuals and businesses in the cryptocurrency sector.

The Trump EO rightly calls on financial regulatory agencies to adhere to "transparent decision making, and well-defined jurisdictional regulatory boundaries, all of which are essential to supporting a vibrant and inclusive digital economy and innovation in digital assets."

The EO also is solid in repealing the Biden administration's 2022 executive order that encouraged the government to develop a central bank digital currency (CBDC) and in taking a firm stand against CBDCs by any government department, noting that CBDCs threaten privacy and innovation.

And the EO wisely leaves the details of a proposed cryptocurrency stockpile - or reserve- to further study by the President's Working Group on Digital Asset Markets created by the EO. As I have written, a stockpile of the cryptocurrency the government already holds may be prudent, but grandiose plans for the government to acquire a significant share or the supply of Bitcoin or any other cryptocurrency would be a harmful, market-distorting subsidy that could frustrate innovation in the crypto sector.

My CEI colleagues and I look forward to a dialogue with the President's Working Group on clearing away red tape that inhibits innovation in the crypto sector.

Related analysis:

Forbes, "Next SEC Must Restore Capital Formation Mission,"

CEI blog, "Caution Warranted on Strategic Bitcoin Reserve,"

USA Today, "Biden executive order on crypto may kill crypto financial innovation."