President Trump on Thursday issued an executive order to support the growth of the cryptocurrency industry, calling for a new plan to regulate a business in which he has 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 that would include “regulatory and legislative proposals.” The group would also consider creating a national cryptocurrency stockpile, a government-controlled reserve of digital currencies 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 nation’s international leadership,” the order said. “It is therefore my administration’s policy to support the growth and responsible use of digital assets.”
Mr. Trump has a significant personal stake in the success of the crypto industry. He and his sons last year helped start a crypto company called World Liberty Financial, which is selling a new digital currency called WLFI. This month, he and his wife, Melania, each began selling memecoins, a type of cryptocurrency inspired by a famous internet joke or mascot.
The ventures have drawn criticism from ethics experts concerned about conflicts of interest. In fact, Mr. Trump is trying to write the rules for business ventures that he can personally benefit from. He has vowed 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 boost the crypto industry’s prospects.
In the executive order, Mr Trump said his administration was committed to “protecting and promoting” 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.
However, the order did not go as far as many in the crypto industry had hoped. Mr. Trump did not order federal agencies to drop lawsuits against crypto companies, nor did he direct the government to start buying Bitcoin.
Among the most essential elements of the order is a ban on the creation of a “central bank digital currency,” a type of cryptocurrency that is overseen by the government. Many crypto enthusiasts oppose the creation of such currencies on ideological grounds, and Mr. Trump vowed on the campaign trail 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 one-time skeptic who dismissed Bitcoin as a hoax, Mr. Trump became 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 vowed to turn the United States into the “crypto capital of the planet.”
Then, in September, the Trump family launched World Liberty Financial, which they marketed as a platform to facilitate borrowing and lending in digital currencies. Mr Trump is not a direct owner of World Liberty Financial, but he does get a cut of sales of WLFI, the cryptocurrency linked to the platform.
Since his election, Mr. Trump has moved to reshape the regulatory agencies that pursued crypto companies during the Biden administration. In December, he appointed a new chairman of the Securities and Exchange Commission, who has worked closely with crypto companies. And he tapped venture investor and digital currency enthusiast David Sacks to oversee his administration’s policies on artificial intelligence and crypto.
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 soared, adding tens of billions 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 a memecoin.
The episode sparked outrage from crypto traders, who said they felt burned by the back-to-back announcements and chaotic price movement. But the industry still has high expectations for the Trump administration. Crypto executives have lobbied him for months, hoping to secure his support for legislation that would undermine the SEC and raise the prices of major digital currencies.
Hours before Mr Trump’s inauguration on Monday, the price of Bitcoin surged to a record high of more than $109,000 as crypto supporters celebrated the ascension of a man they described as “Bitcoin’s first president”.