President Donald Trump’s recent executive order on cryptocurrency is designed to initiate government regulations with the goal of establishing the U.S. as the “crypto capital of the world.”

On Thursday night, Trump—who has branded himself as the “crypto president”—signed the order that proposes forming a cryptocurrency working group. This group will create new regulations for digital assets and explore the possibility of a national stockpile of cryptocurrency.

This move is expected to accelerate the acceptance of cryptocurrencies like Bitcoin, making them more commonly used for transactions akin to credit or debit cards.

Amy Lynch, a former regulator at the U.S. Securities and Exchange Commission and current president of FrontLine Compliance, shared with YSL News, “This indicates that cryptocurrency and digital assets are gaining recognition from our federal government. Once the regulations are established and these new orders are implemented (unless significantly altered by the Working Group), we can anticipate a substantial increase in cryptocurrency transactions across the USA.”

Furthermore, Yesha Yadav, a financial regulation professor at Vanderbilt Law School, commented to YSL News that these regulations will offer “significant relief for everyday crypto users.” She added, “This initiative promises essential, thoughtful regulations that will offer basic protections to participants in the crypto space.”

Highlights from President Trump’s executive order on cryptocurrency

The executive order sets up a Digital Asset Markets working group which includes prominent figures: the Treasury secretary (Scott Bessent, pending confirmation), White House A.I. and Crypto Czar David Sacks, and the chair of the Securities and Exchange Commission (Trump’s nominee is former SEC commissioner Paul Atkins), alongside “leaders from other pertinent departments and agencies.”

This group’s mission is to devise a regulatory structure for digital assets, including stablecoins—cryptocurrencies usually tied to the value of the U.S. dollar.

Yadav pointed out that for those engaged in cryptocurrency investments, the “lack of basic protective measures” can lead to “extremely costly” consequences. She remarked, “For users of stablecoins, the uncertainty surrounding the assets backing them and the credibility of the issuers has been glaringly absent.”

The working group’s responsibilities also involve exploring the establishment of a digital reserve, potentially comprised of assets “legally obtained by the federal government through enforcement actions involving cryptocurrencies.”

Lynch observed that such a reserve would classify cryptocurrencies similarly to commodities like gold. “Since we maintain gold stockpiles, this directive appears to align with that strategy.”

Opinions among crypto supporters diverge on whether the U.S. should liquidate its considerable holdings of Bitcoin—amounting to roughly $20 billion from lawful seizures, according to crypto tracking firm Arkham Intelligence—or even begin acquiring more Bitcoin for a reserve, Yadav elaborated.

“The question remains whether the U.S. should hold various crypto assets. This is an ongoing debate,” she stated.

Trump’s order emphasizes: “The advancement of digital financial technology in America should not be hindered by excessive regulations or unnecessary government interference.”

Trump’s evolving stance on cryptocurrency

Trump’s executive directive on cryptocurrencies reverses one from President Joe Biden’s administration issued in 2022, which aimed to promote cryptocurrencies and investigate the potential for the Federal Reserve to issue its own digital currency.

The cryptocurrency sector viewed the Biden administration as unfavorable towards crypto and has urged Congress and regulators to develop new legislation to clarify when a crypto token is designated as a security, commodity, or falls into another classification. Conversely, the Biden administration has maintained that its actions against exchanges were due to regulatory violations concerning securities.

Yadav stated, “The Biden administration’s framework for crypto regulation never materialized.” She reflected on the fallout of the 2022 FTX exchange collapse, where victims lost around $1 billion, indicating the palpable consequences of regulatory inaction.

Initially, Trump expressed skepticism towards crypto. In 2019, he tweeted on X that he was “not a fan of Bitcoin and other cryptocurrencies, which are not genuine money, and whose value is extremely volatile and based on speculation.”

However, Trump’s perspective shifted as he observed the support for cryptocurrency among Republicans and the campaign contributions from pro-crypto entities that fueled his re-election efforts.

Trump has also ventured into the crypto landscape by launching digital trading cards, a form of non-fungible tokens (NFTs). Recently, he and First Lady Melania Trump introduced meme coins, which are additional forms of tradeable cryptocurrency.

According to Lynch, “The newly launched $TRUMP and $MELANIA coins signal the President’s full endorsement of cryptocurrency usage and issuance. These coins present another means for the president and his family to monetize their involvement in the industry.”

Trump’s crypto executive order: A pivotal shift

The crypto community celebrated Thursday’s executive order. Nathan McCauley, CEO and co-founder of Anchorage Digital, remarked to Reuters: “Today’s crypto executive order signifies a monumental shift in U.S. digital asset policy.”

Conventional banks also view this order as a positive step towards facilitating consumer engagement in cryptocurrency transactions.

Bank of America CEO Brian Moynihan told CNBC during an interview at the World Economic Forum in Davos, Switzerland, “If the regulations facilitate real business transactions, we will likely see the banking sector actively engaging in this space.”

Nevertheless, some remain cautious about crypto. Anne Walsh, CIO at Guggenheim Partners, stated to Reuters, “I don’t advocate for or against it. it hasn’t evolved as intended, which was to serve as an alternative to traditional banking.”

She commented, “I see cryptocurrency parallel to Nasdaq; it reflects an appetite for risk.”

Contributors: Matthew Brown and Bailey Schulz of YSL News; Reuters.

Connect with Mike Snider on Threads, Bluesky, and X: mikegsnider & @mikegsnider.bsky.social & @mikesnider.