In a significant move for cryptocurrency regulation in the United States, President Donald Trump has signed an executive order (EO) titled “Strengthening American Leadership In Digital Financial Technology”. This order officially prohibits the creation and issuance of any central bank digital currencies (CBDC) across the nation. A CBDC is defined 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 executive order explicitly states, “Except to the extent required by law, agencies are hereby prohibited from undertaking any action to establish, issue, or promote CBDCs within the jurisdiction of the United States or abroad.” Additionally, it mandates the immediate termination of any ongoing plans related to the establishment of a CBDC by governmental agencies. This decisive action reflects Trump’s focus on limiting federal control over digital currencies.
Establishing a Regulatory Framework
Alongside the ban on CBDCs, the new EO will also form a presidential working group tasked with developing a comprehensive federal regulatory framework for digital assets. This initiative includes evaluating the creation of a strategic national digital assets stockpile. The order instructs the working group to consider key factors such as market structure, oversight, consumer protection, and risk management.
The definition of a “digital asset” encompasses any digital representation of value recorded on a distributed ledger, including cryptocurrencies like bitcoin and various digital tokens. One of the primary goals of this working group will be to propose criteria for the maintenance of a national digital asset stockpile, possibly sourced from cryptocurrencies seized by federal law enforcement.
Amazonous of these developments, Trump has previously pledged to create a national strategic bitcoin stockpile comprising the bitcoin already held by the government, currently valued at over $20.1 billion. This strategic reserve aims to further cement the U.S.’s position in the global digital currency arena and utilize assets acquired from law enforcement actions, particularly from past hacks.
Implications for Bitcoin and Future Legislation
In light of this executive order, U.S. Senator Cynthia Lummis has introduced legislation aimed at establishing a Strategic Bitcoin Reserve. This bill proposes to acquire 200,000 bitcoin annually over five years, ultimately targeting a total of 1,000,000 BTC. However, this initiative will require legislative approval before reaching the President’s desk.
President Trump’s commitments also include granting a full pardon to Ross Ulbricht, the notorious founding figure of the Silk Road, underscoring his continued support for Bitcoin advocates. These actions illustrate Trump’s strategic vision of embedding cryptocurrencies more deeply within national economic policies.
Overall, the Executive Order marks a pivotal moment in how the U.S. government views digital currencies, positioning Bitcoin as a cornerstone of its approach to digital finance.
