President Trump signs executive order to ban central bank digital currencies

Today, President Donald Trump signed an executive order (EO) titled “Strengthening American Leadership in Digital Financial Technology,” marking a significant move in the cryptocurrency space. The EO officially bans the creation and issuance of a central bank digital currency (CBDC) in the United States, defining a CBDC as “a form of digital money or monetary value, denominated in the national unit of account, that is a direct liability of the central bank.”

The order declares: “Except to the extent required by law, agencies are hereby prohibited from undertaking any action to establish, issue, or promote CBDCs within the jurisdiction of the United States or abroad. Except to the extent required by law, any ongoing plans or initiatives at any agency related to the creation of a CBDC within the jurisdiction of the United States shall be immediately terminated, and no further actions may be taken to develop or implement such plans or initiatives.”

In addition to banning CBDCs, the EO establishes a presidential working group tasked with creating a federal regulatory framework for digital assets, including cryptocurrencies and stablecoins. The group will also evaluate the potential creation of a strategic national digital assets stockpile.

“The Working Group’s report shall consider provisions for market structure, oversight, consumer protection, and risk management,” the order states. “The Working Group shall evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile, potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.”

The EO defines “digital asset” as any digital representation of value recorded on a distributed ledger, encompassing cryptocurrencies like bitcoin, digital tokens, and stablecoins.

The national stockpile is expected to primarily consist of bitcoin. During the Bitcoin 2024 Conference in Nashville last summer, Trump pledged to create a strategic bitcoin reserve using bitcoin already in government possession from law enforcement seizures and hacks. According to data from Arkham Intelligence, the U.S. currently holds 198,109 bitcoin, valued at over $20.1 billion.