by Jude Ayua  

 

US President Trump signed a new executive order on 23 January 2025, titled “Strengthening American Leadership in Digital Financial Technology.” The executive order outlines the US government’s approach to digital assets regulation and adoption. It provides regulatory clarity, financial stability, data privacy, economic growth, and the United States’ global leadership in FinTech.

The order establishes policies to encourage the lawful use of blockchain technology, grant access to banking services. ItThe order prioritizes support for dollar-backed stablecoins and prohibits the issuance and use of central bank digital currencies (CBDCs) within the United States.

Notably, the order revokes President Biden’s Executive Order 14067 of 9 March 2022 the Department of the Treasury’s “Framework for International Engagement on Digital Assets” of 7 July 2022. Agencies must repeal and rescind any policies inconsistent with the new order.

Key provisions of the executive order

1. Purpose and policies: The order aims to promote the responsible growth of digital assets and blockchain technology across all economic sectors in the US; ensure individuals and private entities can access and use open public blockchain networks lawfully without censorship; support the US Dollar’s sovereignty by fostering the development of legitimate dollar-backed stablecoins. It further seeks to guarantee fair and open access to banking services for law-abiding citizens and businesses.
2. Definitions: The new executive order defines key concepts such as blockchain,  digital assets, and CBDC. “Digital asset” includes cryptocurrencies, digital tokens, and stablecoins recorded on distributed ledgers; “Blockchain” refers to distributed networks that verify and update transactions with cryptographic integrity. CBDC is “a form of digital money or monetary value, denominated in the national unit of account, that is a direct liability of the central bank.”

 

Read also: President Trump revokes Biden’s Crypto Executive Order.

 

1. The President’s Working Group on Digital Asset Markets: The executive order establishes a Working Group under the National Economic Council to guide digital asset policy. The Special Advisor for AI and Crypto will double as the Working Group Chair. Membership includes officials from key government departments including the Treasury, Justice, Securities and Exchange Commission, Homeland Security, Commodity Futures Trading Commission, and officials within the Executive Office of the President. Within 30 days, agencies must review their policies relating to digital assets. They must also submit recommendations to the Working Group within 60 days. The Working Group must submit a comprehensive report on regulatory and legislative proposals within 180 days. The Working Group will evaluate a national digital asset stockpile and its potential uses.
2. Prohibition of CBDCs: The order prohibits government agencies from issuance or promotion of CBDCs within or outside the US. Agencies must terminate any ongoing initiatives related to CBDCs immediately.

All agencies must comply with the provisions of the order and ensure alignment with existing policies.

Policy implications

President Trump’s executive order on digital FinTech is the President’s first crypto-specific order. It aims to balance innovation with regulatory oversight, enhance the role of digital assets in the US economy, and maintain the country’s leadership in global financial markets.

By revoking existing policies that are inconsistent with the new order and mandating compulsory compliance, the President aims to achieve uniformity across relevant agencies. 

The order also harmonizes interagency digital assets policies and regulations for the first time. Having key regulators such as the SEC, CFTC, and Treasury, among others in the Working Group, will ensure a harmonious approach to digital assets regulation. 

However, the order does not mention the US Federal Reserve as a key player. Notwithstanding, Trump’s overall stance on digital assets would ensure that the Fed is in tune with the policies.

Also, Trump’s revocation of Biden’s executive order raises a concern for compliance and consumer protection. The Biden order, although not comprehensive, addressed the issue of the use of digital assets for illicit activities, which Trump’s order does not cover. Biden’s executive order specifically provided for anti-money laundering and counter-terrorism financing (AML/CFT) measures to address this issue.

Though the revocation of Biden’s executive order is absolute, Trump’s new executive order directs a review of any provisions in other existing policies which are inconsistent with the new order. This means that non-conflicting aspects of the AML/CFT provisions in Biden’s order could be essentially reproduced and reapplied.

Read also:  Silk Road: Triumph for crypto advocates as Trump pardons Ross Ulbricht.

 

Image credit: Jim Watson/AFP

 

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Jude Ayua is a policy analyst at CAB. A lawyer, Jude is an associate at Infusion Lawyers where he is a member of the Blockchain & Virtual Assets Group. He is also a member of the Policy & Regulations Committee of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). Jude reports and writes on crypto policy and regulations. jude@infusionlawyers.com

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