State of Crypto: President Donald Trump Signs Executive Order on Digital Assets

You're reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government.

Following Donald Trump's inauguration as the 47th U.S. President, several government agencies and Congressional bodies have taken initial actions that could impact the cryptocurrency industry.

Here's a summary of the key developments:

White House/Administration

President Trump signed an executive order on crypto, directing various agencies to take specific actions. The order includes provisions that:

Instruct the Treasury Department to submit a report on the potential benefits and risks of digital assets within 180 days.

Direct the Commerce Department's National Telecommunications and Information Administration (NTIA) to lead an interagency effort to develop recommendations for a U.S. Central Bank Digital Currency (CBDC) within 120 days.

Task the Office of Science and Technology Policy (OSTP) with co-chairing the President's Council of Advisors on Science and Technology, to be led by Citadel founder Ken Griffin and PayPal co-founder Peter Thiel.

Announce the appointment of Commissioner Hester Peirce to lead a newly formed crypto-focused task force within the U.S. Securities and Exchange Commission (SEC).

Trump also pardoned Silk Road creator Ross Ulbricht, citing the support he received from the Libertarian Movement. Ulbricht was sentenced to double life in prison and 40 years with no parole for criminal enterprise, narcotics distribution and various conspiracy charges.

The SEC, now operating under Acting Chair Mark Uyeda, made one of its first moves by rescinding Staff Accounting Bulletin 121 (SAB 121). This bulletin directed publicly traded companies holding crypto for their clients to mark those holdings on their own balance sheets. The crypto industry strongly opposed SAB 121, arguing that it hindered banks from providing certain crypto services.

The Commodity Futures Trading Commission (CFTC), now under Acting Chair Caroline Pham, appointed CFTC Senior Policy Advisor Harry Jung to lead the regulator's engagement with the crypto industry. Trump has yet to nominate a candidate for the permanent chair role.

Senate

The Senate Banking Committee has confirmed the creation of a subcommittee focused on digital assets, to be chaired by Sen. Cynthia Lummis (R-Wyo.). The subcommittee will also include freshmen Sens. Bernie Moreno (R-Ohio), Ruben Gallego (D-Ariz.), Dave McCormick (R-Pa.) and others.

Moreno received $40 million in support from crypto political action committee Fairshake during his campaign, while Gallego received $10 million.

The Banking Committee is set to hold a hearing on crypto, although the specific time and witness list are yet to be announced. Sen. Ted Cruz (R-Texas) introduced a joint Congressional Review Act resolution together with House Rep. Mike Carey (R-Ohio) to overturn the IRS' recent crypto broker rule.

The rule, finalized late last month, defines the term "broker" for IRS tax reporting purposes, but has already faced a lawsuit from the Blockchain Association. The industry lobbyists argue that the final rule "puts unlawful compliance burdens on software developers."

Sen. Elizabeth Warren (D-Mass.), now the new lead Democrat on the Senate Banking Committee, is also asking the U.S. Office of Government Ethics to look into the TRUMP token. She sent an open letter co-signed by Massachusetts Representative Jake Auchincloss.

House of Representatives

The House Oversight Committee announced its intention to investigate whether banks de-banked crypto companies at the government's behest in a letter sent out by the committee.

The House Financial Services Committee has already scheduled two hearings on crypto for next month. The first, on Feb. 6, will focus on the debanking issue. The second, set for Feb. 11, is titled "A Golden Age of Digital Assets: Charting a Path Forward."

Rep. Gerry Connelly, the leading Democrat on the House Oversight Committee, asked the panel's leading Republican, Rep. James Comer, to probe Trump's issuance of the TRUMP coin and his ties to World Liberty Financial.