US President Donald Trump has signed a new executive order focused on cryptocurrency and digital assets. The order aims to resolve some challenges faced by Web3 companies and provide clearer regulations for the industry. A key part of the order is the creation of a working group on digital assets. This group will promote US leadership in cryptocurrency and explore setting up a national stockpile of digital assets. However, the order excludes the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) from this working group.
Trump’s executive order excludes Fed, FDIC from crypto working group. Source: XWhy Did Trump’s Executive Order Exclude the Fed and FDIC?
The decision to exclude the Fed and FDIC has drawn attention because both agencies were previously involved in regulating the crypto industry. Critics, like Caitlin Long, CEO of Custodia Bank, have accused the agencies of making it difficult for crypto companies to access banking services.
In a post on X, Long said, “Trump’s crypto executive order excludes the Fed & FDIC from the digital asset working group. Both tried to kill the industry through debanking.”
No More Crypto Debanking!
During the Biden administration, many crypto firms faced banking challenges. Some insiders claimed this was part of a coordinated effort called “Operation Chokepoint 2.0.” This alleged operation involved pressuring banks to cut ties with crypto companies.
More than 30 crypto and tech founders reportedly lost access to banking services during this time. The situation worsened in 2023 when several crypto-friendly banks collapsed. For instance, New York-based Signature Bank, known for its crypto clients, was shut down by state regulators in 2023. The Federal Reserve announced that the FDIC had taken receivership of the bank to protect depositors. As of December 31, 2022, Signature Bank had $110.36 billion in total assets and $88.59 billion in total deposits.
Additionally, California-based Silvergate Bank voluntarily announced its liquidation and the end of operations in 2023. The bank faced a sharp decline in its stock price and financial struggles after major crypto firms severed ties with it.
Stablecoin Policy Now Under Treasury’s Control
The executive order also impacts stablecoin regulations. Caitlin Long noted that the Federal Reserve will no longer play a role in shaping stablecoin policies. Instead, Treasury Secretary Scott Bessent, a hedge fund manager and Trump’s pick for the role, will oversee this area.
SEC Changes Rules for Crypto Custody
In a separate but related development, the Securities and Exchange Commission (SEC) has rescinded a controversial rule called Staff Accounting Bulletin 121 (SAB 121). This rule required banks holding crypto for customers to record the assets as liabilities.
The new rule, SAB 122, makes it easier for US banks to offer crypto custody services. Industry leaders see this as a positive step for the crypto space.
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