On January 17, Bloomberg reported that cryptocurrency has been listed as a national "priority" by Trump. According to people familiar with the matter, this strategic wording is intended to guide government agencies to work with the industry. People familiar with the matter said that the executive order also plans to establish a cryptocurrency advisory committee to advocate for the industry's policy priorities.
Trump has been strongly supported by the cryptocurrency industry, which has a strong influence in Washington and is supported by well-funded political action committees. In recent months, many companies, including Coinbase and Ripple, have donated to Trump's inaugural committee. On Friday, a few days before the inauguration, the industry will hold an "Inaugural Crypto Ball" to support Trump.
The executive order will mark a major shift for cryptocurrencies, which have been the subject of investigation during President Joe Biden's administration following a series of high-profile fraud cases, including the bankruptcy of the FTX exchange. Federal agencies, including the U.S. Securities and Exchange Commission, have filed more than 100 enforcement actions against the industry in recent years, and banking regulators have made it difficult for cryptocurrency companies to work with financial institutions.
People familiar with the matter said there are still discussions about whether to include a directive in an executive order that would require all government agencies to review their policies on digital assets and potentially suspend any lawsuits involving cryptocurrencies. Stopping legal actions against a range of companies from Binance Holdings Ltd to startup Ripple Labs Inc. is a top priority for the industry.
The government is also considering establishing a national bitcoin reserve that would include the world's largest cryptocurrency currently held by the government, the people said. The U.S. government currently holds nearly $20 billion worth of bitcoin that was seized in various investigations, according to analytics firm Arkham. Bitcoin has risen nearly 50% to more than $100,000 since the November election, in part because of hopes of establishing such a bitcoin reserve. By 2024, the price of the bitcoin would more than double.
The executive order, which could be issued as early as Monday, is not final and could change before it is released, people familiar with the matter warned. A Trump spokesman did not immediately respond to a request for comment.
Trump has vowed to issue a series of executive orders targeting a range of different industries and issues in his first days in office.
"I think what Donald Trump is going to do is show that America is back and we're ready to lead in this industry," said Kara Calvert, vice president of U.S. policy at Coinbase Global Inc. "It's sending a signal to other countries: Be careful or you won't be able to keep up."
Despite regulatory setbacks during the Biden administration, cryptocurrencies in the U.S. are expanding, with major financial firms including BlackRock Inc, the world's largest asset manager, launching spot exchange-traded funds for bitcoin and ether last year. New York banks have been working to expand their cryptocurrency custody businesses, with Cantor Fitzgerald announcing plans to launch a bitcoin financing business.
Trump expressed support for the cryptocurrency industry during last year's presidential campaign. In July, he hosted a Bitcoin conference and promised to make the United States the world's cryptocurrency capital. Trump-branded bearer tokens have been launched for several years, and last year he and his sons announced the establishment of a cryptocurrency company called "World Liberty Financial" to enable people to earn and borrow cryptocurrencies, but these services have not yet been provided.
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