Trump’s Crypto Working Group Presents Policy Recommendations; Confirms Digital Stockpiling

The key points in the report were outlined in a fact sheet issued by the White House, ahead of the official launch on Wednesday. 

They include:

• Asking Congress to pass the Digital Asset Market Clarity Act. It has already been through the House of Representatives and the Senate’s version has some variations. The Working Group is pressing Congress to use the legislation to close regulatory gaps by giving the Commodity Futures Trading Commission (CFTC) the authority to oversee decentralized finance technologies
• Urging the Securities and Exchange Commission (SEC) and the CFTC to “immediately enable the trading of digital assets at the federal level”. They can do this by being clearer about key areas including such as the registration of ownership, custody regulations, and the trading and recordkeeping of cryptocurrencies
• Demanding clarification about “permissible bank activities” when it comes to the issuing of stablecoins and blockchain use, as well as transparency around bank charters and ensuring bank capital rules are appropriate for the risks associated with digital assets, as opposed to traditional asset classes.

“By implementing these recommendations, policymakers can ensure that the United States leads the blockchain revolution and ushers in the Golden Age of Crypto,” said the White House in the fact sheet.

Crypto stockpile          

The remit for the Working Group was included in an Executive Order on “Strengthening American Leadership In Digital Financial Technology,” issued by the White House three days after President Trump’s second inauguration. 

One of the instructions for the 180-day report was to examine the creation of a Bitcoin reserve and a national digital asset stockpile, potentially using cryptocurrencies seized by the Federal Government. While there was no mention of it in the fact sheet, the White House reaffirmed the plan and said it would "operationalize" the stockpile in a separate communication later in the day:

• The Strategic Bitcoin Reserve and US Digital Asset Stockpile will be capitalized by forfeited digital assets.
• Bitcoin in the Reserve will "generally not be sold" and will be maintained as reserve assets.
• The Treasury and Commerce departments will develop strategies that could be used to acquire additional bitcoin for the Reserve.

Keeping on track

The Working Group is Chaired by David Sacks, former PayPal chief operating officer and now the White House AI and Crypto Tzar, with Hines providing the day-to-day management. Members come from across the Executive Branch departments, including the Treasury, the Attorney General’s office, Homeland Security, National Security, and the SEC, among others. 

This the Working Group’s third report. The first, at the end of the first month of operations, was a compilation of all the “regulations, guidance documents, orders, or other items that affect the digital asset sector”. The second, 30 days later, covered recommendations and proposals about modifying or rescinding those items.