In a significant move for the cryptocurrency world, the President of the United States, Donald Trump, has recently ratified an executive order that addresses Bitcoin and other digital currencies. Dubbed “Bolstering US Dominance in Digital Financial Technology,” this order effectively puts a halt on the creation and distribution of any Central Bank Digital Currency (CBDC) within the U.S. In the executive order, a CBDC is described as a digital form of currency or monetary value, denominated in the national unit of account, and is directly linked to the central bank.
The order states, “Except where lawfully required, agencies are specifically barred from initiating any action towards the establishment, issuance, or promotion of CBDCs within the U.S. or overseas.” It further specifies, “Unless mandated by law, any ongoing plans or initiatives by any agency related to the development of a CBDC within the U.S. must be immediately halted, with no further action permitted towards the inception or implementation of such projects.”
Furthermore, the executive order will lay the foundation for a presidential working group, whose mandate is to develop a federal regulatory framework for digital assets, which includes stablecoins. This working group will also explore the possibility of creating a strategic national digital assets reserve.
The order outlines that, “The report from the Working Group will discuss market structure, oversight, consumer protection, and risk management provisions. The group will assess the potential for creating and maintaining a national digital asset reserve and propose guidelines for its establishment, potentially sourced from cryptocurrencies lawfully seized by the Federal Government through its law enforcement activities.”
The term “digital asset” as defined in the order, refers to any digital representation of value that is recorded on a distributed ledger — encompassing cryptocurrencies like Bitcoin, digital tokens, and stablecoins.
The reserve is anticipated to be primarily or entirely in Bitcoin. During The Bitcoin 2024 Conference held in Nashville, Trump committed to establishing a national strategic Bitcoin reserve using the Bitcoin already in possession of the government, obtained through seizures and hacks. Based on data from Arkham Intelligence, the U.S. currently holds 198,109 Bitcoin, valued at over $20.1 billion.
U.S. Senator Cynthia Lummis, following Trump’s address at the conference, proposed legislation to also create a Strategic Bitcoin Reserve, albeit through a different approach. Her proposal involves the U.S. government purchasing 200,000 Bitcoin each year, for a period of 5 years, until a total of 1,000,000 BTC has been acquired. However, this proposed legislation would need to be passed by both the House of Representatives and the Senate before reaching the desk of the president for final approval.
To date, President Trump has stayed true to the Bitcoin-related pledges he made during his campaign. Earlier this week, he granted a full and unconditional pardon to Bitcoin pioneer and Silk Road founder Ross Ulbricht, as he had promised to do, in addition to establishing a Strategic Bitcoin Reserve, prohibiting CBDC, forming a working group/advisory council, and more.
You can find the full details of the executive order here.
