President Trump on Thursday issued an executive order to support the growth of the cryptocurrency industry, calling for a new plan to regulate businesses in which he has significant personal investments.
The executive order, which was not detailed, said the Trump administration would establish a working group on digital assets to come up with a comprehensive plan that includes “regulatory and legislative proposals.” The group will also consider creating a national cryptocurrency stockpile, a government-controlled stock of digital currencies that the industry has spent months lobbying the new administration to create.
“The digital asset industry plays a critical role in innovation and economic development in the United States, as well as our country’s international leadership,” the order said. “It is therefore the policy of my administration to support responsible growth and use of digital assets.”
Mr. Trump has a huge personal stake in the success of the cryptocurrency industry. Last year, he and his sons helped create a cryptocurrency company called World Liberty Financial, which sells a new digital currency called WLFI. This month, he and his wife, Melania, began selling memcoins, a type of cryptocurrency inspired by an internet joke or celebrity mascot.
These projects have drawn criticism from ethics experts who are concerned about conflicts of interest. In effect, Mr. Trump is trying to write the rules for business ventures from which he might personally benefit. He has pledged to end the Biden administration’s legal crackdown on cryptocurrency companies and has made a series of staff picks at key federal agencies that appear poised to boost the cryptocurrency industry’s prospects.
In the executive order, Trump said his administration is committed to “protecting and promoting” the cryptocurrency industry. He promised “fair and open access to banking services,” in response to complaints from cryptocurrency companies that banks have refused to open accounts for them.
However, demand has not reached the extent that many in the cryptocurrency industry had hoped. Mr. Trump did not order federal agencies to drop lawsuits against cryptocurrency companies, nor did he direct the government to start purchasing bitcoin.
Among the more substantive elements of the order is a ban on the creation of a “central bank digital currency,” a type of cryptocurrency overseen by the government. Many cryptocurrency enthusiasts oppose the creation of such currencies for ideological reasons, and Mr. Trump pledged during his election campaign to ban them.
But in analysis Cryptocurrency researcher Molly White noted that no federal agency has ever seriously pursued the creation of such a cryptocurrency. Ms. White described Mr. Trump’s order as “mostly symbolic.”
Mr. Trump, once a skeptic who dismissed bitcoin as a scam, became an outspoken cryptocurrency enthusiast during the election campaign, as the cryptocurrency industry pumped more than $130 million into high-profile congressional races. At a Bitcoin conference in July, Trump pledged to turn the United States into the “cryptocurrency capital of the planet.”
Then, in September, the Trump family created 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 receives a portion of sales of WLFI, the cryptocurrency associated with the platform.
Since his election, Mr. Trump has moved to reshape regulatory agencies that went after cryptocurrency companies during the Biden administration. In December, he selected a new SEC chair, who has worked closely with cryptocurrency companies. He appointed venture investor and cryptocurrency enthusiast David Sachs to oversee his administration’s policies on artificial intelligence and cryptocurrencies.
But Mr. Trump’s most aggressive foray into the cryptocurrency market came on Friday night, when he announced a meme coin called $Trump. Cryptocurrency sales immediately soared, adding tens of billions of dollars to Mr. Trump’s net worth, at least on paper. The price collapsed two days later, after Melania Trump announced that she was also offering memecoins.
The incident angered cryptocurrency traders who said they felt burned by the successive announcements and chaotic price action. But the industry still has high expectations for the Trump administration. Cryptocurrency executives have been lobbying him for months, hoping to secure his support for legislation that would weaken the Securities and Exchange Commission and boost prices of the leading cryptocurrency.
Hours before Mr. Trump’s inauguration on Monday, the price of bitcoin soared to a record high of more than $109,000, as cryptocurrency supporters celebrated the rise of a man they described as the first “bitcoin president.”
