President Trump on Thursday issued an executive order to support the growth of the cryptocurrency industry, calling for a new plan to regulate the business in which he has a significant personal investment.
The executive order, which was light on details, said the Trump administration would create a digital assets task force to come up with a comprehensive plan including “regulatory and legislative proposals.” The group would also consider creating a national cryptocurrency reserve, the order said — a government-controlled pool of digital coins that the industry has spent months lobbying the new administration to create.
“The digital assets industry plays a critical role in innovation and economic development in the United States, as well as in our country’s international leadership,” the order said. “Therefore, it is my administration’s policy to promote the responsible growth and use of digital assets.”
Mr. Trump has a significant personal stake in the success of the crypto industry. With his sons, he helped found a crypto company called World Liberty Financial last year, which is selling 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 celebrity mascot.
The businesses have drawn criticism from ethics experts who worry about conflicts of interest. In reality, Mr. Trump is trying to write the rules for business that he can personally profit from. He has promised to end the Biden administration’s legal crackdown on crypto companies and has made a series of personnel picks at key federal agencies that appear poised to bolster the crypto industry’s prospects.
In the executive order, Mr. Trump said his administration is committed to “protecting and supporting” the crypto industry. He promised “fair and open access to banking services,” a response to complaints from crypto companies that banks have denied them accounts. And shortly after issuing the order, the Securities and Exchange Commission lifted accounting guidelines that had discouraged banks from getting involved in cryptocurrencies.
Still, Mr. Trump’s moves have not gone nearly as far as many in the crypto industry had hoped. He did not order federal agencies to drop lawsuits against crypto companies, nor did he order the government to start buying bitcoins.
Among the most significant elements of the order is a ban on the creation of “central bank digital currency,” a type of cryptocurrency overseen by the government. Many crypto enthusiasts oppose the creation of such currencies on ideological grounds, and Mr. Trump has pledged to outlaw them.
But in an analysis of the order, Molly White, a crypto researcher, noted that no federal agency has ever seriously pursued the creation of such a cryptocurrency. Ms White called Mr Trump’s order “largely symbolic”.
A former skeptic who dismissed bitcoin as a fraud, Mr. Trump has become an outspoken digital currency enthusiast on the campaign trail as the crypto industry poured more than $130 million into high-profile congressional races. At a bitcoin conference in July, Mr Trump promised to turn the United States into the “crypto capital of the planet”.
Then in September, the Trump family founded World Liberty Financial, which it marketed as a platform to facilitate borrowing and lending in digital currencies. Mr. Trump does not directly own World Liberty Financial, but he does receive a cut of the sales of WLFI, the cryptocurrency associated with the platform.
Since his election, Mr. Trump has moved to reshape the regulatory agencies that hounded crypto companies during the Biden administration. In December, he chose a new SEC chairman who worked closely with crypto companies. And he tapped venture capitalist and digital currency enthusiast David Sacks to oversee his administration’s AI and cryptocurrency policies.
But Mr Trump’s most aggressive foray into the crypto market came on Friday night when he announced a memecoin called $Trump. Sales of the cryptocurrency immediately surged, adding tens of trillions of dollars to Mr. Trump’s net worth, at least on paper. The price dropped two days later after Melania Trump announced that she was also offering memecoin.
The episode sparked outrage among crypto traders who said they felt burned by the subsequent announcements and chaotic price movements. But the industry still has high expectations from the Trump administration. Cryptocurrency executives have lobbied him for months in hopes of securing his support for legislation that would defend the SEC and raise the prices of leading digital currencies.
Hours before Mr Trump’s inauguration on Monday, the price of bitcoin jumped 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”.
