Unpacking Trump's Executive Order on Digital Financial Technology

It began with the Crypto Ball. Then came the inauguration. And in the days since, we’ve seen pro-crypto shakeups at key regulatory agencies, the formation of a Securities and Exchange Commission (SEC) task force on crypto, an executive order, and the withdrawal of a controversial SEC rule. Let’s focus first on the executive order. 

On January 23, 2025, President Donald J. Trump signed an Executive Order (EO) titled “Strengthening American Leadership in Digital Financial Technology,” marking a pivotal shift in US policy on digital assets and financial innovation. The directive aims to bolster the nation’s leadership in blockchain and cryptocurrency technologies while emphasizing innovation, regulatory clarity, and the protection of individual freedoms and monetary sovereignty. 

The executive order is really a starting point — it lays out the processes for implementation of legal clarity and fostering innovation, and highlights the priorities of the incoming administration. Think of it more as the map rather than the treasure chest. However, it does set forth a few key policy proclamations.

The executive order explicitly bans the development or use of central bank digital currencies (CBDCs) in the United States, citing risks to financial privacy and independence, and prioritizes the dominance of the US dollar through dollar-backed stablecoins. 

The new order both builds on and diverges from President Biden’s 2022 Executive Order, “Ensuring Responsible Development of Digital Assets,” with a sharper focus on immediate deliverables, streamlined regulation, and economic competitiveness.

The executive order emphasizes protecting the rights of individuals and entities to access and engage with blockchain networks, including mining, validation, and self-custody of digital assets. It mandates that no law or policy should inhibit these rights, underscoring the US commitment to fostering innovation without unlawful interference. In a notable departure from previous measures, it revokes Biden’s Executive Order 14067 and the Treasury’s 2022 "Framework for International Engagement on Digital Assets," resetting the US approach to digital financial technology.

To ensure regulatory coherence, the EO directs the Department of the Treasury, the SEC, the Commodity Futures Trading Commission (CFTC), the Department of Justice (DOJ), and other federal agencies to create a unified, technology-neutral framework for digital asset regulation within 120 days. Oversight will be coordinated by the newly established President’s Working Group on Digital Asset Markets, led by a Special Advisor for AI and Crypto — former paypal executive David Sacks — under the National Economic Council. This group includes senior representatives from key federal agencies and is tasked with aligning efforts across government to eliminate overlap and provide clear guidance.

Key provisions and deadlines

The Executive Order establishes a series of key deadlines for federal agencies and the President’s Working Group on Digital Asset Markets to advance the administration's policy objectives. Within 30 days, Treasury, DOJ, SEC and other relevant agencies are tasked with identifying all existing regulations, guidance documents, orders, and other items that impact the digital asset sector. This effort aims to create a comprehensive inventory of policies affecting the industry.

Following this initial review, each agency is required to submit recommendations to the Chair of the Working Group within 60 days. These recommendations will address whether the identified items should be rescinded, modified, or, in the case of non-regulatory items, formalized as regulations. This process is designed to streamline and clarify the regulatory landscape for digital assets.

The Working Group is also mandated to deliver a detailed report to the President within 180 days. This report will outline a proposed federal regulatory framework for the issuance and operation of digital assets — including stablecoins, focusing on market structure, oversight, consumer protection, and risk management. Additionally, the report will evaluate the potential establishment of a national digital asset stockpile. This stockpile could be derived from cryptocurrencies lawfully seized through federal law enforcement efforts, and is intended to support broader national interests. These deadlines reflect the administration’s commitment to swiftly and comprehensively addressing the complexities of the digital asset ecosystem.

Comparisons between Trump and Biden EOs

While the Biden and Trump executive orders both attempt to kick off the building of regulatory frameworks for digital assets, they reveal strikingly different approaches to regulating and fostering blockchain technology and digital assets in the United States.

In contrast to President Biden’s more measured approach, which allowed agencies up to a year for research and stakeholder engagement, Trump’s directive emphasizes speed and actionable outcomes. Biden’s 2022 Executive Order focused on responsible innovation with an emphasis on environmental sustainability, financial inclusion, and long-term research. While both orders explore the potential of a US CBDC, Trump’s order explicitly bans CBDC development, favoring private sector innovations like dollar-backed stablecoins to reinforce the dollar’s global dominance.

Biden’s directive, on the other hand, called for exploring the potential of a US CBDC to maintain the dollar’s global role, emphasizing privacy and financial inclusion. It prioritized international collaboration to establish harmonized regulatory standards, tasking agencies such as the Treasury and DOJ with producing detailed white papers on these topics.

The executive orders also diverge in their stance on global collaboration. Biden emphasized working with international allies to harmonize regulatory frameworks, while Trump’s order pivots toward a US-centric policy, focusing on domestic innovation and revoking prior measures, including Biden’s executive order and the Treasury’s international engagement framework.

The ideological divide is evident: Biden’s directive embodies a cautious, systemic safety-oriented approach; whereas Trump’s order feels urgent calling for rapid innovation and private-sector empowerment. Together, these contrasting strategies highlight an evolving federal debate on balancing innovation, regulation, and national security in the rapidly expanding digital asset ecosystem.

Revocation of prior measures

By nullifying Biden’s Executive Order 14067 and the Treasury’s international engagement framework, Trump’s directive resets the US digital asset agenda. It signals a pivot from the environmental and social goals of the Biden administration to a framework focused on national security, economic dynamism, and maintaining the US dollar’s preeminence.

Beyond the EO

While the executive order is arguably the biggest news, in the long term, it might not be the most impactful. Earlier this week, President Trump appointed Caroline Pham as acting Chair of the CFTC and Mark Uyeda as acting Chair of the SEC, signaling a significant shift in the US regulatory approach.

Pham, a CFTC Commissioner since April 2022, has championed clear regulatory frameworks and technological adaptation, proposing initiatives like regulatory sandboxes and pilot programs to foster digital asset markets. Mark Uyeda, who joined the SEC as a Commissioner in June 2022, has been critical of the agency’s previous enforcement-heavy approach to crypto regulation, advocating for clearer guidance to support innovation, capital formation, and investor protection.

Under this new leadership, the SEC announced the creation of a crypto task force led by Commissioner Hester Peirce, a long-time crypto advocate, to develop a comprehensive regulatory framework for digital assets. This task force will engage closely with industry stakeholders and Congress to provide technical assistance and foster a collaborative approach to crafting clear and practical regulations. The SEC’s announcement marked a departure from its prior reliance on retroactive enforcement actions and untested legal interpretations — acknowledging the need for clarity in registration processes and the necessity of a regulatory environment that protects investors while supporting innovation and market integrity.

The CFTC, under Caroline Pham’s leadership, and the SEC’s crypto task force are set to coordinate efforts — moving past the agencies’ historic competition over jurisdictional authority. This collaboration, especially when combined with the executive order, underscores a broader agenda to establish clear “rules of the road” for digital assets and align regulatory priorities across agencies. Commissioner Peirce emphasized the importance of public input and collaboration, stating that fostering a regulatory framework that protects investors and promotes innovation will require patience and collective effort. With these appointments and initiatives, the administration aims to create a more innovation-friendly regulatory landscape for the rapidly evolving digital asset space.

In addition, on the same day the President dropped the new EO, the SEC announced the withdrawal of the unpopular Staff Accounting Bulletin (SAB) 121, which was initially issued in March 2022 to address the accounting treatment of cryptocurrencies held by companies on behalf of customers. SAB 121 required firms to record digital assets held for customers as both assets and liabilities on their balance sheets, along with a safeguarding obligation to reflect the risks of theft or cyberattacks. This directive applied to all entities filing financial statements with the SEC that offered crypto custody services, including banks and financial institutions. The approach effectively treated customer assets differently from other custodial assets, such as securities, by recognizing them as corporate liabilities.

The directive had a significant impact on the financial reporting of affected companies, often inflating their balance sheets and creating additional complexities in financial disclosures. Many critics, including industry stakeholders, argued that SAB 121 created disproportionate challenges, particularly for smaller firms and those primarily involved in crypto custody. It also faced criticism for being introduced without public comment and for potentially discouraging companies from entering the digital asset space due to the heightened liabilities and regulatory scrutiny. The SEC’s withdrawal of SAB 121 reflects an acknowledgment of these challenges, leaving open questions about how digital assets will be accounted for under federal oversight moving forward.

How about AML?

We knew you were going to ask. While there is nothing about anti-money laundering (AML) or financial crime in the Trump EO, as the ecosystem grows, anti-financial crime compliance will be more important than ever. The EO and recent personnel changes indicate a shift away from enforcement actions against lawful crypto businesses by the SEC and other agencies. And as the ecosystem grows, it will be more important than ever that we keep real criminals — ransomware groups, cybercriminals, money launderers — out of the growing and overwhelming lawful space.

Recent data from TRM’s Crypto Crime Report highlights the dual nature of the digital asset ecosystem: its vast potential for innovation and its persistent exploitation by illicit actors. In 2024, while overall crypto transaction volume reached USD 10.6 trillion, illicit volume dropped to USD 45 billion, accounting for just 0.4% of total activity, the lowest proportion on record. 

Despite the encouraging decline in the proportion of illicit crypto activity, threats remain significant. In 2024, ransomware attacks surged, with a record 5,635 reported incidents. Meanwhile, USD 2.2 billion was stolen in hacks-a 17% increase from 2023-with North Korea groups responsible for nearly USD 800 million. Crypto-related drug sales also grew by 20%, nearing USD 2.4 billion. 

The Working Group has a critical mission: to provide regulatory clarity that fosters innovation while leveraging blockchain intelligence to mitigate risks posed by bad actors. Achieving this balance will require a coordinated effort across agencies and industry.

The road ahead

President Trump’s Executive Order, and the flurry of activity this week, underscores the administration’s focus on economic leadership and innovation in the digital financial landscape. By prioritizing speed, competitiveness, and regulatory clarity, the order seeks to establish the United States as a global leader in blockchain and cryptocurrency technologies. But, the real work now begins as the executive and legislative branches —  together with industry — work together to craft sound policy that allows users to engage in a secure and private manner while, at the same time, ensuring the necessary consumer protection and anti-money laundering guardrails.

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