Trump 2.0: A New Era for the Regulation of Cryptocurrency and Digital Assets

President Trump Signs Executive Order Designed to Support U.S. Crypto Industry
On January 23, 2025, President Trump signed an executive order that sets forth the administration’s policy “to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.” The Executive Order focuses on several key priorities, including:

• Establishing the President’s Working Group on Digital Asset Markets (the Working Group) within the National Economic Council;
• Restricting agencies from engaging in actions to establish, issue or promote central bank digital currencies;
• Promoting the growth of U.S. dollar-backed stablecoins;
• Protecting and promoting crypto companies’ access to banking services; and
• Providing regulatory clarity and certainty for the crypto industry.

The Working Group will be chaired by venture capitalist David Sacks, whom President Trump previously selected to be the administration’s “Crypto and AI Czar.” It will consist of a dozen official members, including the chairs of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), the Secretaries of the Treasury and Commerce Departments, the Attorney General, and several other senior officials from the administration. The Working Group may also solicit input from other relevant federal agencies and stakeholders, including private citizens who are “leaders in digital assets and digital markets.”

The Executive Order directs the Working Group to submit a report to President Trump within 180 days that proposes a comprehensive federal regulatory framework for digital assets, including stablecoins, and that evaluates the potential for a national “stockpile” of digital assets. President Trump signaled an interest in creating a national Bitcoin reserve based in part on the federal government’s existing Bitcoin holdings, and the Executive Order appears to be the first official step toward creating that reserve.

The Working Group will also review regulations, guidance documents, orders, and other policy items that impact the crypto industry and, within 60 days, submit recommendations to the chair of the Working Group for whether those items should be rescinded, modified or remain in place. The Executive Order itself directly repeals one aspect of the Biden administration’s crypto policy: Executive Order 14067 of March 9, 2022, which set forth the Biden administration’s policy objectives for the regulation of digital assets. In other words, the Trump administration appears to be moving swiftly to remove perceived obstacles to the widespread use of blockchain technology and development of the crypto asset markets. By assessing the merits of relevant regulation, guidance and policy that impact the crypto industry, the Working Group will act to further the President’s agenda of generating actionable ideas to provide increased regulatory certainty and concrete guidance to market participants regarding the rules of the road.

SEC Forms New Crypto Task Force
On January 21, 2024, Acting SEC Chairman Mark T. Uyeda announced the creation of a new “Crypto 2.0” task force charged with creating a clear crypto regulatory framework. Commissioner Hester Peirce, who has previously supported regulatory clarity for the crypto industry, will lead the task force. The SEC’s press release announcing the task force critiqued the SEC’s previous “novel and untested” legal interpretations and enforcement actions that attempted to regulate crypto “retroactively and reactively.” The Crypto 2.0 task force will instead look to develop “a comprehensive and clear regulatory framework” for crypto. It will also help the SEC “deploy enforcement resources judiciously.” The task force will collaborate with other federal officials and agencies, including the CFTC, and state and international regulators, and will also seek input from stakeholders and the public.

Pro-Crypto Appointments in Key Roles
In Washington, as the saying goes, “personnel is policy.” President Trump’s appointees for key regulatory positions are already beginning to shape the administration’s crypto policy agenda, will continue to further the President’s agenda, and are widely expected to take a more even-handed and industry friendly approach to crypto regulation and enforcement than their predecessors in the Biden administration.

In the newly created role of “Crypto and AI Czar,” David Sacks advises the President and guides the administration’s policy on matters related to crypto. In a social media post announcing the selection, President Trump stated that Sacks “will work on a legal framework so the Crypto industry has the clarity it has been asking for, and can thrive in the U.S.” As the chair of the crypto Working Group, Sacks is now positioned to carry out that directive. Sacks is a longtime supporter of the crypto industry and is expected to push for more permissive crypto policy that supports innovation and the growth of the industry in the United States.

As described above, the SEC has already launched a new task force aimed at providing clear rules of the road for the crypto industry. Trump has also nominated Paul Atkins to chair the SEC. Atkins, a former SEC commissioner, has expressed support for the crypto industry and served on advisory boards and at advocacy groups that promote crypto and blockchain technology. He is expected to take a considerably different approach to crypto than Biden administration SEC Chair Gary Gensler, who brought high-profile enforcement actions against crypto companies and their executives and was criticized for “regulation by enforcement.” We anticipate that Atkins will take a more even-handed approach to regulating the crypto industry, including by reviewing and reconsidering the enforcement positions the SEC took under former Chair Gensler. The SEC under Atkins will also likely attempt to provide clear rules and guidance to the crypto industry, through the work of the new Crypto 2.0 task force and participation in the crypto Working Group.

On January 27, 2025, the Senate confirmed Scott Bessent as secretary of the Treasury Department. Bessent has been similarly celebrated by the crypto community. In contrast to Biden administration Treasury Secretary Janet Yellen, who at times expressed skepticism of the crypto industry, Bessent has been a vocal proponent of blockchain technology and digital assets. Bessent will shape U.S. financial and economic policy and, like other senior Trump appointees, is expected to push for more measured oversight of the crypto industry that promotes growth and innovation.

Federal Banking Regulators Will Likely Revisit Biden Administration Crypto Policy
During the Biden administration, the federal banking regulators closely scrutinized banks’ own crypto activity and banks’ arrangements with crypto companies. Most notably, the Federal Deposit Insurance Corporation (FDIC) recently disclosed that it issued so-called “pause” letters to more than 20 banks requesting that those banks pause crypto-asset-related activity while the FDIC evaluated whether it would require banks to make regulatory filings or provide additional information before engaging in such activity. The Federal Reserve and Office of the Comptroller (OCC) of the Currency similarly suggested that banks obtain prior approval before engaging in or expanding crypto asset-related activities. In many instances, these policies had the effect of making it more challenging for crypto companies to access the banking system and to provide their products and services to the public.

Under President Trump, new senior officials will be in leadership positions at each of the federal banking agencies. On January 20, President Trump appointed Travis Hill as acting chairman of the FDIC, and Hill issued a statement outlining his short-term policy priorities, including adopting “a more transparent approach to fintech partnerships and to digital assets and tokenization.” Hill has also stated that the FDIC should consider issuing additional guidance that lays out clear expectations for how banks may engage in crypto-related activities. In addition, Michelle Bowman, a leading contender to be nominated the vice chair for Supervision of the Federal Reserve, has also expressed support for clarity and transparency in regulators’ supervision of banks’ crypto-related activities.

The Executive Order specifically names “fair and open access to banking services” for the crypto industry a key priority. We expect that Trump administration banking regulators will provide a clearer framework for banks to engage in crypto-related activities (such as providing custodial services) and to partner with crypto companies to facilitate providing crypto products and services. These officials will also play a key role in shaping the administration’s overall crypto policy and in the development of a comprehensive regulatory framework.

Congress Likely to Consider Crypto Legislation
House Financial Services Committee Chair French Hill and Senate Banking Committee Chair Tim Scott have stated their interest in passing the Financial Innovation and Technology for the 21st Century Act (FIT21), which previously made it through the House of Representatives with bipartisan support. This bill would classify cryptocurrency as a commodity, giving the CFTC the  exclusive authority over cash or spot markets for digital commodities, and the SEC authority when a digital asset is associated with a blockchain that is not decentralized. Whether Congress will enact this legislation remains uncertain, but there is clear interest in Congress to take action to provide clarity in the regulation of crypto.

Companies Must Still Contend with State Regulators
Even if the Trump administration provides a clearer regulatory framework for the crypto industry and expands opportunities for companies to provide innovative crypto services, the federal government is likely to continue prosecuting cases of fraud, money laundering, sanctions violations, and similar crimes in the crypto context. In addition, many companies will still need to navigate the complex web of state regulation that applies to crypto and other digital assets. For example, crypto companies operating in New York will remain subject to New York’s “BitLicense” regulatory and licensing regime. California also recently enacted and is now implementing its Digital Financial Assets Law, which will similarly require many crypto companies to obtain a license. Many states’ money transmission licensing laws will also continue to apply to crypto companies.

In addition, state attorneys general and securities regulators may attempt to fill a perceived gap in crypto-related enforcement. New York Attorney General Letitia James has been particularly active in bringing enforcement actions against prominent crypto companies. This state enforcement activity will continue, and is in fact likely to increase, during President Trump’s second term.

Compliance Considerations and Other Action Items
The prospect of decreased regulation and enforcement under the Trump administration does not necessarily decrease overall risk for the crypto industry, and firms should not compromise on compliance. Complying with the existing rules of the road, including anti-money laundering laws and regulations, will continue to be critically important for crypto companies. In addition, regulated entities will need to satisfy their usual compliance obligations, including by implementing and maintaining appropriate policies and procedures, training, and other controls.

There is clear momentum in the executive and legislative branches of the federal government to design and implement a clearer roadmap that allows digital assets and blockchain technology companies to operate and grow with a greater degree of regulatory certainty. However, change takes time, and companies should continue to carefully assess how their products and services fit within the existing, as well as the evolving, regulatory framework.