Upon assuming office, U.S. President Donald Trump signed an executive order in a direction towards developing the crypto sphere. The “Strengthening American Leadership in Digital Financial Technology” is a reflection of several key campaign vows Trump took during the election campaign. The objective of its provisions is to enable ordinary citizens and large companies to use cryptocurrencies at will, develop blockchain technology, join mining, make payments, and store assets in a secure manner.
Crypto assets are the new national priority of the USA
Trump considered the issue of crypto assets and digital currencies a matter of national concern, with a view towards re-shaping America’s financial system. After years of stringent restrictions under the previous administration, the sphere of cryptocurrencies will gain systemic support, including opening a U.S. strategic fund in Bitcoin in its basic form. The order simplifies cryptocurrencies’ regulation and enables creating a national reserve of digital assets. It aims at strengthening America’s position in cryptocurrencies and opening new dimensions for participants in the market.
Implementation of the executive order for strengthening America’s leadership in digital financial technologies will have a demand for participants in the market to modernize and streamline their blockchain strategies and practice. Eesti Firma, a company that began cooperating with blockchain projects in 2017, gained considerable expertise in such work and provides consultancy for working with emerging challenges and new opportunities.
Integration of Crypto Assets into the Future of Finance
A considerable part of the document is concentrated in a discussion of stablecoins, cryptocurrencies pegged to the U.S. dollar. With such assets, America can gain even a larger impact over the economy in the world. The President emphasized that such technology must develop in America and must have backing in terms of support from the state.
National Bitcoin Reserve: A New Tool for Reducing National Debt?
Crypto investors and sector leaders actively champion creating a national Bitcoin reserve fund. According to them, an appreciating value in terms of tokens can help shave off national debt. The move is regarded as a tool for ushering in the volatile cryptocurrency community into future financial life in America.
Deleting Obstacles
A critical component of the executive order is opening access to banking for entities in the cryptocurrency community. In the last several years, entities involved in cryptocurrencies have for a long time cried about “de-banking,” when banks shunned them for banking with them due to tight regulating policies. Under the new order, “fair and open access” to banking for all citizens and entities abiding by laws is a necessity.
Ban on Central Bank Digital Currency
Not only does the order encourage decentralized finance but prohibits developing and using Central Bank Digital Currency (CBDC) in America. Backing such a move is a concern that such technology will enhance government over citizens’ and companies’ pockets.
Updating Old Policies
A part of the executive order, Trump overhanded several policies signed under Joe Biden’s presidency, including a U.S. Treasury program in support of an international stance towards regulating digital assets. Under the new memorandum, a full overhaul of such a policy must make them transparent and innovation-friendly.
Also, under it, an order creates a cryptocurrency task force, with a role to develop new legislation for regulating digital assets and even venturing into creating a national cryptocurrency reserve fund. With this, Trump’s campaign pledge to review U.S. policies for cryptocurrencies in a timely manner is fulfilled.
180 days for reforms: how will the rules for digital assets change?
The task force, under David Sacks, head advisor on cryptocurrency and artificial intelligence, will consist of representatives for important departments and agencies: Treasury, Justice, Commerce, Homeland Security, the SEC, and the Commodity Futures Trading Commission (CFTC). In 180 days, the task force will present a report with new regulation recommendations, managing dangers, and supporting stablecoins.
Regulatory Reforms and National Reserve
Perhaps one of the most long-awaited repercussions of the order is a request for the SEC to repeal rules that make third-party holding of crypto assets prohibitively expensive for publicly traded companies. Rules have been criticized in the past by the community of cryptocurrencies for hindering widespread use of digital assets.
Another interesting section in the order is the creation of a national cryptocurrency reserve. Trump mentioned many times that he wants America to become a leader in the marketplace for crypto assets, and taking such a step is in agreement with such an intention. The national reserve can consist of Bitcoin and other digital assets captured during investigations and operations conducted in the past by U.S. departments of justice.
Market Reaction
The price of Bitcoin experienced a temporary little fall after a signed order. According to analysts, such actions have already been factored in by the market, and, therefore, such an immediate impact was limited. In any case, according to professionals, in the long run, such actions will make a path for even more positive circumstances for cryptocurrencies to develop. Overall, new actions implemented by Trump work towards strengthening America’s position as a powerful source for digital finance, offering long-awaited clarity and support for companies dealing with cryptocurrencies.
Adapting to Global Changes
Successful engagement in a range of crypto assets not only presupposes a realization of their individual character but fulfillment of requirements, most importantly in developed nations with developed crypto environments, for example, such as EU member states, where the cryptocurrency sector is regulated by the MiCA regulatory framework. Companies seeking to comply with new EU requirements will need to consider obtaining a European crypto license, according to MiCA.
Venturing into the EU sphere for cryptocurrency service, timely compliance with all requirements in advance is important. Eesti Firma takes care of personalized solutions, consultation, and bookkeeping, will adapt your company to new trends and make use of new horizons. Let’s get in touch with each other in order to make your project successful at any stage of development.