On January 23, local time, just three days into his presidency, Trump signed an executive order titled "Strengthening America's Leadership in Digital Financial Technology." The order proposes the establishment of a "Presidential Working Group on the Digital Asset Markets" to explore federal regulatory measures for stablecoins and relevant schemes for a national digital asset reserve, and explicitly prohibits the "establishment, issuance, circulation, or use" of central bank digital currencies (CBDCs).

SEC Announces Rescission of Widely Criticized SAB 121

Concurrently, the U.S. Securities and Exchange Commission (SEC) announced the rescission of Staff Accounting Bulletin (SAB) 121, which has been heavily criticized within the crypto industry.

While it remains unclear whether the U.S. President's implementation of certain laws and policies through executive orders will be challenged and overturned by the courts, Trump has already fulfilled many of the promises he made at the Bitcoin Conference in July of last year, anticipating a near-complete overhaul of the previous crypto regulatory framework.

Crypto Executive Order: Establishing a Presidential Working Group to Evaluate a National Digital Asset Reserve

The executive order begins by outlining its purpose and policy, stating that "the digital asset industry plays a critical role in innovation and economic development in the United States and is also relevant to America's international leadership. Therefore, it is the policy of this administration to support the responsible growth and application of digital assets, blockchain technology, and related technologies across all sectors of the economy."

Key elements of the executive order include:

• Protecting and promoting the ability of citizens and private sector entities to legally access and use open public blockchain networks, including the ability to develop and deploy software, participate in mining and validation, engage in transactions with others without illegal censorship, and maintain self-custody of digital assets.

• Promoting the global development of legal and compliant dollar-backed stablecoins.

• Protecting and promoting the right of all law-abiding citizens and private sector entities to have fair and open access to banking services.

• Providing regulatory clarity and certainty based on technology-neutral principles, constructing a framework adaptable to emerging technologies, transparent decision-making processes, and clear boundaries for regulatory authority.

• Prohibiting any agency from taking action to establish, issue, or promote CBDCs within or outside the United States, except as required by law, and immediately terminating any existing agency plans or actions related to CBDC creation.

• Revoking the executive order issued on March 9, 2022, titled "Ensuring Responsible Development of Digital Assets," and directing the Secretary of the Treasury to immediately revoke the "Framework for International Engagement on Digital Assets" issued by the Treasury Department on July 7, 2022.

• Establishing a Presidential Working Group on the Digital Asset Markets within the National Economic Council, led by a Special Advisor on Artificial Intelligence and Crypto, with members including the Secretaries of the Treasury, Justice, and Commerce, the Chairs of the Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC), among others.

Additionally, the order requires the Treasury, Justice Department, SEC, and other relevant agencies to identify all regulations and guidance documents affecting the digital asset industry within 30 days of the order's issuance. Within 60 days, agencies must submit modification suggestions to the Special Advisor. The working group must submit a report to the President within 180 days, proposing regulatory and legislative recommendations to advance the policies of this order, including: (i) suggesting a federal regulatory framework for the issuance and operation of U.S. digital assets (including stablecoins); (ii) assessing the potential for creating a national digital asset reserve and proposing standards for establishing such a reserve.

Trump Has Fulfilled Most of His Crypto Promises

At present, Trump has fulfilled most of his crypto promises. Ordering federal agencies to cease any potential CBDC development was one of Trump's promises to the crypto industry during his presidential campaign. Recently, Trump also fulfilled his promise to pardon Ross Ulbricht, the founder of Silk Road. Gary Gensler officially stepped down on January 20, effectively fulfilling Trump's promise to fire him on his first day in office.

However, since taking office, Trump has not commented on fulfilling his promise that "all Bitcoin should be 'Made in America'."

Despite Trump advancing policies through executive orders, their effectiveness may face some procedural challenges. For example, on January 20, Trump signed an executive order essentially repealing birthright citizenship under the Fourteenth Amendment to the U.S. Constitution, but this move was subsequently blocked by a federal judge on the grounds that it was "clearly unconstitutional."

SEC Officially Rescinds Crypto Accounting Policy SAB 121

While the White House was issuing executive orders, the SEC was also working to reverse the previous crypto regulatory model.

On January 24, the SEC issued a new Staff Accounting Bulletin announcing the withdrawal of the controversial SAB 121. "Staff reminds entities that they must still comply with existing disclosure requirements to inform investors about the obligations they undertake for holding crypto assets for others," the announcement read.

SAB 121 required banks and other publicly traded companies to include their clients' crypto assets on their own balance sheets. SAB 122, on the other hand, "revoked previous interpretive guidance" and instead instructed companies to follow the rules of the Financial Accounting Standards Board (FASB) or relevant provisions of International Accounting Standards.

SAB 121 has been controversial since its introduction in March 2022, supported by former SEC Chair Gary Gensler, who argued that the rule could protect investors in bankruptcy events. "We've actually found multiple times in bankruptcy courts that bankruptcy courts have ruled repeatedly that crypto assets are not assets that can avoid bankruptcy risk," he said in a 2023 interview with Reuters.

Issued at the end of March 2022, SAB 121 aimed to better protect investors by detailing how companies should account for custody services for crypto assets. Due to the unique risks associated with crypto assets, staff believed companies should record a liability and corresponding asset on their balance sheets at fair value.

Put simply, if a bank custody 1billionworthofBitcoinforaclient,theymusthold1 billion in cash to offset this "liability" on their balance sheet. The crypto industry widely feared that this could deter banks from custodying digital assets, excluding them from the crypto market.

Last year, SAB 121 became the subject of a resolution under the Congressional Review Act, which passed in Congress but was vetoed by then-President Biden. Now, the SEC's rescission of SAB 121 marks a significant change in crypto industry regulation.

Milestone for U.S. Crypto Regulation

Currently, following Trump's signing of the crypto executive order and the SEC's announcement of the rescission of SAB 121, the U.S. crypto regulatory landscape has reached a milestone. These series of initiatives have brought more regulatory certainty to the industry and filled the market with new expectations for the future. However, change takes time, and it remains to be seen whether the Trump administration can consistently deliver on its promises and how it will further advance the national digital asset reserve plan, which continues to deserve close attention from the industry

On January 23, local time, just three days into his presidency, Trump signed an executive order titled "Strengthening America's Leadership in Digital Financial Technology." The order proposes the establishment of a "Presidential Working Group on the Digital Asset Markets" to explore federal regulatory measures for stablecoins and relevant schemes for a national digital asset reserve, and explicitly prohibits the "establishment, issuance, circulation, or use" of central bank digital currencies (CBDCs).

SEC Announces Rescission of Widely Criticized SAB 121

Concurrently, the U.S. Securities and Exchange Commission (SEC) announced the rescission of Staff Accounting Bulletin (SAB) 121, which has been heavily criticized within the crypto industry.

While it remains unclear whether the U.S. President's implementation of certain laws and policies through executive orders will be challenged and overturned by the courts, Trump has already fulfilled many of the promises he made at the Bitcoin Conference in July of last year, anticipating a near-complete overhaul of the previous crypto regulatory framework.

Crypto Executive Order: Establishing a Presidential Working Group to Evaluate a National Digital Asset Reserve

The executive order begins by outlining its purpose and policy, stating that "the digital asset industry plays a critical role in innovation and economic development in the United States and is also relevant to America's international leadership. Therefore, it is the policy of this administration to support the responsible growth and application of digital assets, blockchain technology, and related technologies across all sectors of the economy."

Key elements of the executive order include:

• Protecting and promoting the ability of citizens and private sector entities to legally access and use open public blockchain networks, including the ability to develop and deploy software, participate in mining and validation, engage in transactions with others without illegal censorship, and maintain self-custody of digital assets.

• Promoting the global development of legal and compliant dollar-backed stablecoins.

• Protecting and promoting the right of all law-abiding citizens and private sector entities to have fair and open access to banking services.

• Providing regulatory clarity and certainty based on technology-neutral principles, constructing a framework adaptable to emerging technologies, transparent decision-making processes, and clear boundaries for regulatory authority.

• Prohibiting any agency from taking action to establish, issue, or promote CBDCs within or outside the United States, except as required by law, and immediately terminating any existing agency plans or actions related to CBDC creation.

• Revoking the executive order issued on March 9, 2022, titled "Ensuring Responsible Development of Digital Assets," and directing the Secretary of the Treasury to immediately revoke the "Framework for International Engagement on Digital Assets" issued by the Treasury Department on July 7, 2022.

• Establishing a Presidential Working Group on the Digital Asset Markets within the National Economic Council, led by a Special Advisor on Artificial Intelligence and Crypto, with members including the Secretaries of the Treasury, Justice, and Commerce, the Chairs of the Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC), among others.

Additionally, the order requires the Treasury, Justice Department, SEC, and other relevant agencies to identify all regulations and guidance documents affecting the digital asset industry within 30 days of the order's issuance. Within 60 days, agencies must submit modification suggestions to the Special Advisor. The working group must submit a report to the President within 180 days, proposing regulatory and legislative recommendations to advance the policies of this order, including: (i) suggesting a federal regulatory framework for the issuance and operation of U.S. digital assets (including stablecoins); (ii) assessing the potential for creating a national digital asset reserve and proposing standards for establishing such a reserve.

Trump Has Fulfilled Most of His Crypto Promises

At present, Trump has fulfilled most of his crypto promises. Ordering federal agencies to cease any potential CBDC development was one of Trump's promises to the crypto industry during his presidential campaign. Recently, Trump also fulfilled his promise to pardon Ross Ulbricht, the founder of Silk Road. Gary Gensler officially stepped down on January 20, effectively fulfilling Trump's promise to fire him on his first day in office.

However, since taking office, Trump has not commented on fulfilling his promise that "all Bitcoin should be 'Made in America'."

Despite Trump advancing policies through executive orders, their effectiveness may face some procedural challenges. For example, on January 20, Trump signed an executive order essentially repealing birthright citizenship under the Fourteenth Amendment to the U.S. Constitution, but this move was subsequently blocked by a federal judge on the grounds that it was "clearly unconstitutional."

SEC Officially Rescinds Crypto Accounting Policy SAB 121

While the White House was issuing executive orders, the SEC was also working to reverse the previous crypto regulatory model.

On January 24, the SEC issued a new Staff Accounting Bulletin announcing the withdrawal of the controversial SAB 121. "Staff reminds entities that they must still comply with existing disclosure requirements to inform investors about the obligations they undertake for holding crypto assets for others," the announcement read.

SAB 121 required banks and other publicly traded companies to include their clients' crypto assets on their own balance sheets. SAB 122, on the other hand, "revoked previous interpretive guidance" and instead instructed companies to follow the rules of the Financial Accounting Standards Board (FASB) or relevant provisions of International Accounting Standards.

SAB 121 has been controversial since its introduction in March 2022, supported by former SEC Chair Gary Gensler, who argued that the rule could protect investors in bankruptcy events. "We've actually found multiple times in bankruptcy courts that bankruptcy courts have ruled repeatedly that crypto assets are not assets that can avoid bankruptcy risk," he said in a 2023 interview with Reuters.

Issued at the end of March 2022, SAB 121 aimed to better protect investors by detailing how companies should account for custody services for crypto assets. Due to the unique risks associated with crypto assets, staff believed companies should record a liability and corresponding asset on their balance sheets at fair value.

Put simply, if a bank custody 1billionworthofBitcoinforaclient,theymusthold1 billion in cash to offset this "liability" on their balance sheet. The crypto industry widely feared that this could deter banks from custodying digital assets, excluding them from the crypto market.

Last year, SAB 121 became the subject of a resolution under the Congressional Review Act, which passed in Congress but was vetoed by then-President Biden. Now, the SEC's rescission of SAB 121 marks a significant change in crypto industry regulation.

Milestone for U.S. Crypto Regulation

Currently, following Trump's signing of the crypto executive order and the SEC's announcement of the rescission of SAB 121, the U.S. crypto regulatory landscape has reached a milestone. These series of initiatives have brought more regulatory certainty to the industry and filled the market with new expectations for the future. However, change takes time, and it remains to be seen whether the Trump administration can consistently deliver on its promises and how it will further advance the national digital asset reserve plan, which continues to deserve close attention from the industry