Big things are coming! Foreign media: Trump may sign crypto orders on his first day in office, with Bitcoin reserves likely?
White House's new approach aims to promote crypto reform
President-elect Trump is set to officially take office next week, and according to preliminary plans exposed by several media outlets, he may sign multiple executive orders supporting the cryptocurrency industry on his first day in office.
Among the most notable actions is the potential repeal of the Securities and Exchange Commission (SEC)'s previous SAB 121 regulation. This regulation required financial institutions to list clients' cryptocurrencies as liabilities on their balance sheets when custodizing crypto assets, significantly increasing the costs and risks for banks involved in the crypto industry. This move faced multiple protests and was once supported for repeal by both parties in Congress but was vetoed during the Biden administration.
Further Reading
Biden uses presidential veto power! Prevents Congress from interfering with SEC: insists on SAB 121 accounting principles to protect investors
SEC Commissioner Hester Peirce has also acknowledged that SAB 121 is overly favorable to large banks in practical operations, hindering the development of small and medium-sized financial institutions or startups. Now, the Trump administration seems intent on a complete overhaul and strengthening the accessibility of banking services to crypto companies. Market analysts believe that if this policy is successfully implemented, commercial banks will be able to freely offer custody, trading, and other services for Bitcoin or other crypto assets, addressing the long-standing 'de-banking' dilemma faced by the crypto industry from the source.
National strategic assets may include Bitcoin
In addition to addressing the issue of limited banking channels, the Trump team has proposed an ambitious 'strategic Bitcoin reserve' plan, allowing the federal government to officially include Bitcoin in the national asset allocation. This move is similar to the planning of traditional strategic materials like gold and oil, and if it can indeed be implemented after Trump takes office, it will set a global precedent.
Some analysts point out that the market effects brought by this plan are likely to significantly boost cryptocurrency prices, but there is also the risk of 'the government buying in advance while investors lift the price.' Macroeconomist Luke Gromen suggests that the Trump administration should 'lay low first, then announce publicly' to avoid the government incurring high costs for large positions.
Regardless of how it is ultimately implemented, in the face of other countries potentially following suit, once the United States sets this precedent, it could likely spark a bidding frenzy among central banks for Bitcoin, making the future of the cryptocurrency market even harder to predict. It is worth noting that this is not the first time Trump has publicly supported Bitcoin or decentralized finance (DeFi); his campaign team has had close interactions with several cryptocurrency companies, including Ripple, MoonPay, and Kraken, which actively sponsored inauguration-related activities, hoping to seize policy opportunities when the new administration takes office.
Crypto Advisory Committee to include 24 industry elites
To further build industry consensus, the Trump administration plans to form a 'Crypto Advisory Committee' composed of about 24 leaders from the blockchain and cryptocurrency industry to assist the government in formulating more comprehensive digital asset policies.
According to White House staff, the committee will focus on four main directions:
Strategic Guidance: Members will work with management to formulate policies that promote innovation in the cryptocurrency industry while ensuring regulatory clarity.
Legislative Collaboration: The committee plans to work closely with Congress to develop comprehensive cryptocurrency legislation covering key issues such as taxation, investor protection, and anti-money laundering standards.
Bitcoin Reserve: Considering a strategic initiative to establish a national Bitcoin reserve, positioning the United States as a global leader in digital asset management.
Regulatory Cooperation: The committee will coordinate with key government agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Treasury Department, to unify the regulatory framework and promote an environment conducive to the development of cryptocurrencies.
The Trump team is also expected to appoint David Sacks, who has been active in the tech and venture capital sectors, as the first 'Crypto Czar,' and former regulator Paul Atkins, who has been relatively friendly towards cryptocurrencies, will serve as the head of the SEC. Washington observers believe that this cross-departmental collaboration and the formation of industry alliances will break the previous predicament of each unit acting independently, while also signaling that the U.S. government is placing unprecedented importance on new financial technologies.
Further Reading
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Trump officially nominates SEC chair! Who is Paul Atkins? Is crypto regulation likely to be relaxed?
Market expectations and controversies coexist
For investors, the upcoming crypto executive order from Trump can be seen as 'the last piece of good news,' allowing the entire coin market to regain vitality after a series of negative events.
Polymarket's predictions show that over $2 million has been wagered on Trump directly mentioning keywords like 'Crypto,' 'Bitcoin,' and even 'Doge' and 'Dogecoin' in his inauguration speech, indicating high market expectations for the new administration.
Image Source: Polymarket users bet on key terms that Trump will directly mention in his inauguration speech
However, some critics are concerned that if banking restrictions are relaxed and the government directly purchases Bitcoin, it may bring financial risks and money laundering concerns. In response, Trump's camp stated that they will strengthen compliance requirements for financial institutions and exchanges to help regulatory bodies better track the flow of funds. Regardless, the series of signals released by the incoming government indicates that the United States is brewing a 'great leap forward in crypto finance,' with everything from restructuring regulatory frameworks to establishing Bitcoin reserves, which will profoundly impact the international financial ecosystem.
'Big things are coming! Foreign media: Trump may sign crypto orders on his first day in office, with Bitcoin reserves likely?' This article was first published on 'Crypto City.'