Fulfilling promises! Trump signs executive order on cryptocurrency, regulatory framework and legislative efforts on the horizon.

On Thursday, U.S. President Donald Trump signed an executive order fulfilling several promises he made to the world of cryptocurrency. He will establish a crypto task force to provide industry-related policy advice to his team, including proposing regulatory frameworks and legislative efforts. Subsequently, the price of Bitcoin rose during Thursday afternoon trading in the Eastern U.S. before falling. In his first set of executive actions related to cryptocurrency since taking office, Trump has fulfilled his campaign promises, so far creating a more friendly regulatory environment for this emerging industry, although crypto investors had expected him to take action on the first day. On Thursday, Trump also reiterated his support for the industry in a virtual speech at the World Economic Forum, stating that he plans to make the U.S. the "world capital of artificial intelligence and cryptocurrency." After Trump signed the executive order, Bitcoin saw a slight increase before falling, rising to $106,400 at one point before dropping to $103,700 at the time of writing. Earlier in the week before his inauguration, the cryptocurrency had hit an all-time high. Sean Farrell, Head of Digital Assets at Fundstrat, said that some in the crypto market may have expected more. Farrell said, "I think the news released today has already been digested." However, he added that the President's support for cryptocurrencies is significant for the industry's future. The executive order signed by Trump will create a presidential working group to coordinate clear regulation of the digital asset industry and prohibit the creation of central bank digital currencies (CBDCs). The task force will focus on establishing a federal regulatory framework for the crypto market. The group will be led by White House AI and Crypto Czar David Sachs, with federal agencies such as the Treasury Department, Justice Department, Securities and Exchange Commission, and Commodity Futures Trading Commission participating. Within 30 days, the working group will identify all regulations, guidance documents, and orders from various government agencies affecting crypto, and within 60 days, make recommendations on these matters. Additionally, within 180 days, the group will submit a report to the President, which will include regulatory and legislative proposals and suggestions. However, the executive order does not fulfill Trump's promise during his 2024 campaign to immediately establish a "national strategic Bitcoin reserve." Before taking office, Trump had stated in July last year that he would hold Bitcoin in the national strategic reserve and pledged to be a "crypto president." Instead, it instructs the new task force to evaluate the potential creation and maintenance of a "national digital asset reserve" and propose "establishing standards for such reserves, possibly sourced from cryptocurrencies seized legitimately through federal law enforcement efforts." This could expand the range of cryptocurrencies held by the government in this reserve, not just Bitcoin. Trump also revoked an executive order from President Biden in March 2022, which required government agencies to study cryptocurrency assets and encouraged all agencies to "take strong measures to mitigate the risks posed by digital assets." Nathan McCauley, CEO of Anchorage Digital, said in an email comment, "The government is taking an important first step towards establishing clear, consistent road rules." McCauley added, "We look forward to collaborating with the President's task force, as the government works towards success on cryptocurrency issues." Due to the Trump administration's position on the industry, other regulatory developments in the crypto world have become a reality. On Thursday, the U.S. Securities and Exchange Commission revoked an accounting guidance called SAB 121, which had posed significant obstacles to banks and broker-dealers seeking to custody cryptocurrencies for clients. Last year, Trump pledged to make the U.S. the "global capital of cryptocurrency." Last Friday, Trump's team launched an official Meme token for the incoming 47th President Trump, and also a Meme token for First Lady Melania Trump on the Solana blockchain, which started trading on Sunday and attracted significant attention in the crypto market. Earlier this week, Coinbase Global CEO Brian Armstrong suggested that, given Trump's gold reserves, he should establish a strategic Bitcoin reserve. "The world is moving towards a Bitcoin standard. Any government holding gold should hold Bitcoin as a reserve," Armstrong said. Trump may order the U.S. government to stop selling cryptocurrency seized and confiscated legally, with supporters believing this could help stabilize the U.S. economy, promote a strong dollar, and eventually assist in repaying a portion of the $35 trillion U.S. national debt. Further measures to require the government to purchase more cryptocurrency, proposed by Senator Cynthia Lummis, may require approval from Congress.