President Trump on Thursday issued an executive order to support the growth of the cryptocurrency industry, calling for a new plan to regulate a business in which he has significant personal investments.
The executive order, which did not provide many details, said the Trump administration would create a working group on digital assets to develop a comprehensive plan that would include “regulatory and legislative proposals.” The group would also consider establishing a national cryptocurrency reserve, a government-controlled reserve of digital currencies that the industry has spent months lobbying the new administration to create.
“The digital asset industry plays a crucial role in America's innovation and economic development, as well as our nation's international leadership,” the order said. “Therefore, my administration's policy is to support the growth and responsible use of digital assets.”
Trump has a significant personal stake in the success of the cryptocurrency industry. He and his sons last year helped start a crypto company called World Liberty Financial, which sells a new digital currency called WLFI. This month, he and his wife, Melania, began selling memecoins, a type of cryptocurrency inspired by an online joke or a famous mascot.
The companies have drawn criticism from ethics experts concerned about conflicts of interest. In effect, Trump is trying to write the rules for trade initiatives from which he can personally benefit. He promised to end the Biden administration's legal crackdown on cryptocurrency companies and made a series of personnel picks at key federal agencies that appear poised to boost the cryptocurrency industry's prospects.
In the executive order, Trump said his administration was committed to “protecting and promoting” the crypto industry. He promised “fair and open access to banking services,” in response to complaints from cryptocurrency companies that banks have denied them accounts.
Still, the order did not go as far as many in the crypto industry had hoped. Trump did not order federal agencies to drop lawsuits against cryptocurrency companies, nor did he order the government to start purchasing bitcoin.
Among the most substantial elements of the order is a ban on the creation of a “central bank digital currency,” a type of government-supervised cryptocurrency. Many cryptocurrency enthusiasts oppose the creation of such currencies on ideological grounds, and Trump promised during the election campaign to ban them.
But in a <a target="_blank" class="css-yywogo" href="https://x.com/molly0xFFF/status/1882536245873856599″ title=”” rel=”noopener noreferrer” target=”_blank”>analysis of the order Molly White, a crypto researcher, noted that no federal agency has seriously pursued the creation of such a cryptocurrency. White called Trump's order “mostly symbolic.”
Trump, once a skeptic and dismissing bitcoin as a scam, became an outspoken digital currency enthusiast during the election campaign, as the crypto industry poured more than $130 million into high-profile races for the Congress. At a bitcoin conference in July, Trump promised to make the United States the “crypto capital of the planet.”
Then in September, the Trump family founded World Liberty Financial, which they marketed as a platform to facilitate lending and borrowing in digital currencies. Trump does not directly own World Liberty Financial, but he receives a portion of sales from WLFI, the cryptocurrency associated with the platform.
Since his election, Trump has taken steps to reshape regulatory agencies that went after cryptocurrency companies during the Biden administration. In December, it elected a new chairman of the Securities and Exchange Commission who has worked closely with crypto companies. And he tapped venture capitalist and digital currency enthusiast David Sacks to oversee his administration's policies on artificial intelligence and cryptography.
But Trump's most aggressive foray into the cryptocurrency market came on Friday night, when he announced a memecoin called $Trump. Sales of the cryptocurrency immediately skyrocketed, adding tens of billions of dollars to Trump's net worth, at least on paper. The price plummeted two days later, after Melania Trump announced that she would also offer a memecoin.
The episode sparked outrage from cryptocurrency traders, who said they felt burned by the back-to-back announcements and chaotic price movement. But the industry still has high expectations for the Trump administration. Cryptocurrency executives have lobbied him for months, hoping to secure his support for legislation that would weaken the SEC and boost prices of major digital currencies.
Hours before Trump's inauguration on Monday, the price of bitcoin rose to a record high of more than $109,000, as cryptocurrency supporters celebrated the rise of a man they described as the first “bitcoin president.”
