Diving brief:
- An executive decree issued by President Donald Trump prohibits government agencies on Thursday Emit, establish or promote Central Bank Digital Currences (CBDC) except required by law, defining currencies such as “a form of digital money or monetary value, worded in the national unit of account, that is to say a direct responsibility for the central bank. “
- This decision takes a promise of Trump campaign, who promised that if he was elected, he barred agencies such as the federal reserve The creation of a digital currency in favor of support for “decentralized” digital currencies such as Bitcoin, according to a 2024 Politico report.
- The order also establishes a presidential working group aimed at creating a “regulatory clarity” For digital active spaceTo be driven by “White House AI & Crypto Czar” and Paypal Alun David Sacks. Among other actions, the group will explore the potential creation of a national stock of digital assets.
Diving insight:
This decision is Trump’s last attempt to wake the cryptocurrency industry at the start of his presidency, following his appointment of friendly leadership in agencies such as the Securities and Exchange Commission. Trump also declared his the intention to do the United States. The “world capital of artificial intelligence and crypto” in a television speech at the World Economic Forum on Thursday.
Trump’s executive decree revokes an order 2022 of the Biden era Explore the role of digital assetswhich includes CBDC, in the financial system, according to a ventilation of Gibson Dunn.
“The executive decree of President Trump marks a pivotal moment in the evolution of digital financial technology, rejecting CBDC and pleading rather for decentralized digital assets and innovation in the private sector”, Michael Levine, financial director of The blockchain and cryptocurrency safety platform Fireblocks told CFO Dive in a statement sent by e-mail. “By prioritizing confidentiality and by opposing that some consider the risks of” money surveillance “associated with CBDC, the administration reports a commitment to economic freedom and promotes confidence in solutions based on the Blockchain. “
The bar of the CBDC emission is probably “the most sharp declaration” included in the decree, Miles Fuller, principal director, public sector operations for digital asset tax and the Taxbit accounting service provider told CFO DIVE – Sending a clear message that the United States will not be created a digital currency supported by the Central Bank.
For financial directors and other business leaders, the order also indicates that Crypto is an area where leadership must pay particular attention-which they have used or avoided digital assets, he said.
“Maybe I can stop avoiding crypto because uncertainty will disappear,” said Fuller about business leaders in an interview. “Or if we were already doing things with Crypto, perhaps certain regulations will come out that will change the compliance requirements. And we must therefore be aware of it. How will things be different?
One of the positive points that comes out of order is the creation of a devoted working group aimed at cutting some of the more troubled areas in the cryptocurrency.
“It is exciting to see the appointment of a very devoted working group to resolve part of what has been in recent years, points of friction in cryptographic space,” said Fuller.
These points of friction include an in progress rope surrounding several definitions of digital assets – including what counts as security, goods or currency – as well as accounting and tax standards for these assets. Also Thursday, the dry Revoked a rule of the Biden era This ordered companies that hold these assets to record them as responsibilities – a rule that attracted declines from the defenders of the industry who argued that it discouraged companies from holding cryptocurrency.
One of the first things that the working group could tackle in this vein is to provide a definition of so-called “stablecoins”, said Fuller.
The definition of work of a “stablecoin” is an asset where its value is linked to another asset, but which are generally issued by private entities Rather than central banks, according to a 2023 report in the World Economic Forum. However, this definition is fluid and is not a regulatory standard; For example, while certain stablescoins can be exchangeable individual with currencies such as the US dollar, others keep their stable algorithmically and are not exchangeable, said Fuller.
“This is where I think that the government must enter and say,” what is the real definition “, of a stablecoin,” said Fuller.
While the Treasury Department offered some directives for these government assets and leaders such as Sens. Kirsten Gillibrand (DN.Y.) and Cynthia Lummis (R-Wyo.) have introduced legislation on the subjectThe United States has no formal framework for these assets.
As part of its mandate, the presidential working group “will offer a federal regulatory framework governing the issue and operation of digital assets, including stablecoins, in the United States”, according to the decree. “The working group report must take into account the provisions of market structure, surveillance, consumer protection and risk management.”
