In a significant move for the digital financial sector, US President Donald Trump has signed an executive order (EO) titled “Strengthening American Leadership in Digital Financial Technology.” The executive order introduces several key provisions, including a ban on the creation and issuance of a central bank digital currency (CBDC) in the United States, while also establishing measures to regulate digital assets such as cryptocurrencies and stablecoins.
Ban on Central Bank Digital Currency (CBDC)
One of the central aspects of this executive order is the official prohibition on the creation of a CBDC in the United States. The EO defines a CBDC as “a form of digital money or monetary value, denominated in the national unit of account, that is a direct liability of the central bank.” The order states that, “except to the extent required by law, agencies are hereby prohibited from undertaking any action to establish, issue, or promote CBDCs” both within the US and abroad. Additionally, any ongoing plans or initiatives related to CBDC creation will be immediately halted.
Creation of a Federal Digital Assets Regulatory Framework
The executive order also sets up a presidential working group tasked with developing a federal regulatory framework for digital assets, including stablecoins. The group’s responsibilities will include evaluating the establishment of a national digital assets stockpile. The working group’s report will address critical areas such as market structure, oversight, consumer protection, and risk management in the digital asset space.
The stockpile will focus on cryptocurrencies seized by the federal government, with a potential emphasis on Bitcoin. This aligns with President Trump’s previous pledge to create a strategic national Bitcoin reserve, using Bitcoin seized from law enforcement efforts. According to Arkham Intelligence data, the U.S. currently holds 198,109 Bitcoin, valued at over $20.1 billion.
Trump’s Vision for a National Bitcoin Stockpile
During the Bitcoin 2024 Conference in Nashville, President Trump expressed his commitment to creating a national strategic Bitcoin stockpile. His plan involves utilizing the Bitcoin the US government has acquired through hacks and seizures. Following Trump’s speech, US Senator Cynthia Lummis introduced legislation to create a Strategic Bitcoin Reserve through a different approach. Her proposal suggests the US government purchase 200,000 Bitcoin per year for the next five years, intending to accumulate 1,000,000 BTC. However, this legislation will need to pass through both the House of Representatives and the Senate before reaching the president’s desk for final approval.
In keeping with his support for the cryptocurrency community, President Trump has also fulfilled a promise made during his campaign by granting a full and unconditional pardon to Ross Ulbricht, the Bitcoin pioneer and founder of the Silk Road platform. This action is part of Trump’s broader agenda to support the digital asset sector, which also includes the establishment of the Bitcoin reserve, banning the CBDC, and creating an advisory council focused on digital assets.
Regulatory Changes for Digital Assets
With this new executive order, the Trump administration is positioning itself as a leader in digital financial technology while taking a firm stance against the adoption of a CBDC. The working group’s findings and the potential creation of a strategic Bitcoin reserve are expected to shape the future of cryptocurrency regulation and establish the US as a key player in the global digital assets market.
As the regulatory landscape evolves, industry stakeholders will be watching closely to see how these new measures will impact the broader cryptocurrency ecosystem and whether other nations will follow suit in banning CBDCs or establishing similar Bitcoin reserves.