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Earlier today, President Donald Trump issued an executive order titled “Strengthening American Leadership in Digital Financial Technology.” The Order declares that the policy of the new administration is “to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.” Among other initiatives, this includes protecting and promoting the “ability to develop and deploy software, to participate in mining and validating, to transact with other persons without unlawful censorship, and to maintain self-custody of digital assets.”
Furthermore, the Administration expresses its intention to provide “regulatory clarity and certainty built on technology-neutral regulations, frameworks that account for emerging technologies, transparent decision making, and well-defined jurisdictional regulatory boundaries,” all of which is meant to support the ever-growing digital economy. This intention is clearly seen in the various revocations and mandates that followed.
Diving into the substance, first, the Order revokes President Biden’s March 2022 E.O. “Ensuring Responsible Development of Digital Assets” (E.O. 14067). President Biden’s Order took a more hostile approach to digital assets, painting a negative illustration of the digital asset industry and even suggesting that the U.S. engage in the development and deployment of a central bank digital currency (CBDC)—an objective that is dismissed in today’s Order. The order also revokes the Department of the Treasury’s “Framework for International Engagement on Digital Assets,” which established international working groups to coordinate on anti-money laundering and combatting the financing of terrorism, CBDCs, cross-border payments, stablecoins, among other priorities.
Second, the Order creates the “Working Group on Digital Asset Markets,” which would be chaired by the “Special Advisor for AI and Crypto,” David Sacks. The Working Group would also include officials and designees from several agencies like the Department of Treasury, the Attorney General, Securities and Exchange Commission (SEC), and Commodity Futures Trade Commission (CFTC), among others.
Priorities of the Working group include: submitting a report to the President, which will recommend regulatory and legislative proposals with respect to digital assets, proposing a federal regulatory framework governing the issuance and operation of digital assets, exploring the potential creation and maintenance of a digital asset stockpile, holding public hearings, and receiving individual expertise from leaders in the digital assets community. It is noteworthy that The Working Group is also instructed to “consult with the National Security Council” on matters affecting national security.
Third, the Order mandates that within 30 days, the Department of the Treasury, the Department of Justice, the Securities and Exchange Commission, and other relevant agencies identify all regulations, guidance documents, and orders that impact the digital asset sector. And, within 60 days of the order, each agency must submit recommendations to the Chair of the working group on whether each identified regulation, guidance document, order, or other item “should be rescinded or modified, or, for items other than regulations, adopted in a regulation.”
All in all, the Order demonstrates a significant shift in policy priorities and objectives from the Executive branch. The previous Administration was hostile toward the digital asset industry, including development and deployment of software, as demonstrated by the SEC’s rampant enforcements across the industry and Department of Justice investigations and prosecutions of individual software developers. Today’s Order shows an unprecedented understanding of decentralized technology in the White House by recognizing the use of open, public blockchains for lawful purposes while maintaining self-custody without persecution or censorship. And while there is still much work to be done in Washington, this is an encouraging commitment towards developing sensible policies and promoting American innovation in the digital asset industry.