President Trump Signs EO Promoting Digital Assets and Financial Technology
Commentary by Andrew Lom and Steven Lofchie
President Trump signed an Executive Order ("EO") to "strengthen[] American Leadership in Digital Financial Technology."
In the EO, the President asserted that "[t]he digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our Nation's international leadership," and "[i]t is therefore the policy of my Administration to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy."
The Order established a "Working Group on Digital Assets Markets," which "shall propose a Federal regulatory framework governing the issuance and operation of digital assets, including stablecoins, in the United States."
The Order specifically prohibits the establishment of a Central Bank Digital Currency within the jurisdiction of the United States.
The Order revokes former President Biden's Executive Order 14067 of March 9, 2022 ("Ensuring Responsible Development of Digital Assets") and the Department of the Treasury's "Framework for International Engagement on Digital Assets," issued on July 7, 2022.
Commentary
Between this Executive Order and the SEC's recent announcement of a new Working Group to be headed by Commissioner Peirce, the digital asset community is aglow with optimism for thoughtful and practical regulations.
While the industry has often been accused of wanting no regulations, both buy-side and sell-side participants are eager for responsible regulations that encourage innovation while still protecting investors. In particular, there is hope for regulations that draw clear lines across the kinds of digital assets that should be regulated at the federal level by the SEC, or the CFTC, or at the state level by ordinary commercial and consumer protection laws. In contrast to the view espoused by the prior administration, there appears to be recognition now that many digital assets are not made into securities simply because they involve a token or blockchain component.
Commentary
For some ideas on necessary steps to move forward, see: A Quick and Dirty Fix for US Cryptocurrency Regulation.
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