President Donald Trump delivered on his campaign promise as he signed the executive order to turn the United States into the crypto capital of the world. The executive order depicts rapid action to provide regulatory clarity whose absence has condemned the industry to operating in the gray region.
The order signed on Thursday, January 23 aims to cement the United States as a global leader in digital asset and artificial intelligence (AI) technology. Additionally, the order bans the issuance of Central Bank Digital Currency (CBDC) in the country, which has seen GOP politicians criticize it as a path to invasion of privacy.
Venture capitalist David Sacks, whom Trump tapped as the crypto and AI czar, witnessed the Oval Office event. The order is set to facilitate the creation of a working group to develop clear regulations in cryptography.
The signing of the executive order comes after much anticipation that Trump will give the pro-Crypto promise on Monday, January 20. While the industry waited until Thursday, the order presents a directive to create the National Crypto Reserve from legally seized assets.
The decree proposes sweeping guidelines supporting the creation of a comprehensive framework to strengthen innovation. Additionally, it will eliminate the regulatory uncertainty behind the country’s surrender of crypto projects and talent to friendly jurisdictions.
Supporters of this initiative profile it as a path to protect the country’s financial sovereignty. The main provision of this order provides a formalized platform banning CBDC which Trump repeatedly opposed during his campaign.
Creation of a cryptographic working group
The central objective of this order is to establish the working ground for cryptography with the National Economic Council (NEC). The newly established committee will operate under the leadership of David Sacks.
The crypto czar must collaborate with other financial market regulators to harmonize the review of the country’s digital asset policies. Nonetheless, the task force faces the tight timeline, especially the 30-day window, to identify regulations and guidance that hinder the crypto industry.
The order gives the task force 60 days to issue recommendations on necessary repeals, modifications and creation of new rules.
A six-month deadline is stipulated for the task force to formulate comprehensive crypto regulations that govern the issuance and operations of digital assets, including stablecoins. The initiative aligns with Trump’s campaign promise to eliminate regulatory ambiguity.
The lack of regulatory clarity in the United States has been a long-standing frustration for the industry during the Biden-Harris administration and Gary Gensler’s tenure as SEC chairman.
Is National Crypto Stockpile Next?
The notable element of the proposal is the stipulation to create the National Crypto Reserve. Notably, the digital asset stock is expected to feature cryptos legally seized by federal law enforcement agencies.
The proposal offers a broader approach to the previously floated idea of a national Bitcoin reserve. Its current form stops short of BTC as it captures other US-developed altcoins to boost adoption of digital assets.
Several crypto purists believe that the broader focus on Altcoins dilutes the initial initiative. However, industry insiders reason that the recent move stems from increased lobbying efforts undertaken by various blockchain companies, particularly Ripple Labs, which has recently executed significant investments and strategic partnerships promoting its XRP token.
Anti-CBDCS campaign
Trump’s executive order issued an unequivocal ban on the circulation and issuance of CBDCs in the United States. The company’s position expands the perceived threat that CBDC poses to personal privacy, financial instability, and national sovereignty.
Unlike cryptos such as XRP, Bitcoin and Sol, CBDCs are primarily government-issued currencies that operate on private blockchains.
Critics warn that CBDCs could grant central banks amplified levels of monetary oversight, allowing them to control how holders spend their money. Trump’s position contrasts with the approach of the Biden administration, which supported the initiative to explore CBDC development.
The departure of the Pro-CBDC course leaves the United States to take a back seat, unlike 100 other global competitors in various phases of development. The executive order confirmed Trump’s position on banning these plans under his administration.
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