Trump's Executive Order Excludes Fed and FDIC from Crypto Working Group, Bringing Major Changes to the Crypto Landscape
Trump’s Executive Order Excludes Fed, FDIC from Crypto Working Group
According to industry insiders, the executive order will also exclude the US central bank from future stablecoin regulation.
US President Donald Trump signed an executive order with the aim of resolving some banking challenges faced by Web3 companies and establishing clearer regulations for digital assets.
This executive order gave rise to a working group on digital asset markets. The group is tasked with identifying ways to enhance US leadership in the crypto industry and "evaluating the creation of a strategic national digital assets stockpile."
In a significant development, the executive order excludes the US Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) from the cryptocurrency working groups.
Caitlin Long, the founder and CEO of Custodia Bank, believes that this could put an end to previous debanking efforts in the crypto industry. Long wrote in a Jan. 23 X post:
"Trump’s crypto executive order excludes the Fed & FDIC from the digital asset working group. Both tried to kill the industry through debanking & especially targeted my company, Custodia Bank. Both belong on the outside."
During the Biden administration, multiple cryptocurrency firms were denied access to banking services. Some insiders described this as an orchestrated effort known as "Operation Chokepoint 2.0."
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Marc Andreessen, the co-founder of Andreessen Horowitz, has revealed that more than 30 technology and crypto founders were "secretly debanked" over the past four years.
The collapse of crypto-friendly banks in 2023 led to the first allegations of Operation Chokepoint 2.0. Critics, such as venture capitalist Nic Carter, characterized it as a government effort to pressure banks into severing ties with cryptocurrency firms.
US Central Bank “Frozen Out of Stablecoin Policy,” Says Long
According to Long, Trump’s new executive order implies that forthcoming US stablecoin legislation will fall outside the jurisdiction of the central bank:
"Pretty incredible that the US central bank has been frozen out of stablecoin policy making. I believe this means Scott Bessent (as Treasury Secretary) will be firmly in charge of it."
Trump’s pick for Treasury secretary, Scott Bessent, is a billionaire investor and hedge fund manager who was previously a partner at Soros Fund Management.
SAB 122: Smoother Crypto Custody for US Banks
On Jan. 23, the Securities and Exchange Commission rescinded the controversial Staff Accounting Bulletin 121, or SAB 121. This rule mandated that financial firms holding crypto on behalf of customers must record them as liabilities on their balance sheets.
A new bulletin, SAB 122, stated that it "rescinds the interpretive guidance" of SAB 121 — a rule that was published in March 2022 and which the crypto industry has long been seeking to have repealed.
Reaction to SAB 122
WazirX founder Nischal Shetty wrote in a Jan. 24 X post that SAB 122 will make it "smoother for US banks to custody digital assets."
The cancellation of SAB 121 marks the first significant move by the SEC under President Donald Trump and acting Chair Mark Uyeda.