In a landmark decision, U.S. President Donald Trump has directed sweeping changes in cryptocurrency policy through an executive order issued on Thursday. The move sets the tone for a crypto-friendly administration while introducing regulations aimed at fostering the industry’s growth.

Formation of a Crypto Working Group

A central element of the executive order is the creation of a cryptocurrency working group. This body will draft new regulations for digital assets and explore the development of a national cryptocurrency stockpile. The initiative aligns with Trump’s campaign promise to position the U.S. as a global leader in crypto innovation.

The order also mandated protections for banking services offered to cryptocurrency firms. This step addresses industry concerns over allegations that regulators had pressured banks to sever ties with crypto businesses—a claim U.S. regulators have denied. Ensuring access to banking services could significantly boost the industry’s legitimacy and operational ease.

Ban on Central Bank Digital Currencies (CBDCs)

Interestingly, the order explicitly bans the creation of central bank digital currencies (CBDCs) in the U.S. The administration seems determined to avoid competition between government-backed digital currencies and existing cryptocurrencies like Bitcoin and Ethereum. This move reflects a preference for private-sector innovation over government-controlled alternatives.

In a win for the crypto industry, the U.S. Securities and Exchange Commission (SEC) rescinded an accounting guideline that had increased costs for companies safeguarding digital assets on behalf of clients. The previous rule discouraged businesses from offering custody services, slowing the adoption of digital assets.

Industry Response and Implications

The crypto sector has welcomed the administration’s actions, viewing them as a “sea change” in U.S. digital asset policy. Nathan McCauley, CEO of Anchorage Digital, hailed the order for providing much-needed clarity and a unified approach to regulating crypto.

Trump’s decisive action is a stark departure from the regulatory crackdown under former President Joe Biden, whose administration sued major exchanges like Coinbase and Binance for alleged violations of U.S. laws. With Trump’s pro-crypto stance, the industry anticipates a more favourable environment for innovation and investment.

This executive order marks a pivotal moment in U.S. crypto policy, signalling a clear shift toward embracing digital assets. As the working group sets out to define the future of cryptocurrency regulation, the industry and investors alike will closely monitor the unfolding developments.