The Donald Trump administration has taken initial steps to signal its support for the crypto industry, but meaningful regulatory clarity is far from immediate, according to investment bank TD Cowen.
On Thursday, President Trump signed an executive order establishing the Working Group on Digital Asset Markets. The group’s mandate is to identify and eliminate barriers to crypto innovation.
“This is the easy stuff,” TD Cowen’s Washington Research Group, led by Jaret Seiberg, wrote in a note on Friday. “Every President sets up commissions and task forces on key issues. It is symbolically important as it reflects how Team Trump prioritizes crypto, but it is not the same as rule changes.”
“Establishing the rules the industry needs will take years, not weeks,” Seiberg added.
On Bitcoin reserve
Trump has tasked the working group to “evaluate the potential creation and maintenance of a national digital asset stockpile,” meaning he did not set up a Bitcoin reserve as many had expected.
“We remain dubious as Trump’s priority is U.S. dollar, which could be at risk as a reserve currency if countries turn to Bitcoin,” Seiberg said.
Last month also, Seiberg noted that a Bitcoin reserve is not an initial priority for the Trump administration. “We see this as unlikely as it could conflict with Donald Trump’s core view that the U.S. dollar deserves to be the global reserve currency because the U.S. is the strongest country,” Seiberg said at the time. “Arguing a Bitcoin reserve would be a hedge to preserve the U.S. role in the global economy seems unlikely to sway Trump.”
On SEC’s SAB 121
Besides Trump’s executive order on crypto yesterday, the U.S. Securities and Exchange Commission repealed Staff Accounting Bulletin No. 121 (SAB 121), which required banks holding crypto for customers to classify those assets as their own liabilities.
This move was expected as it could be done without a rulemaking, Seiberg said, adding that it means banks now could serve as crypto custodians.
The SEC also recently announced a new crypto task force aimed at developing a comprehensive framework for the crypto industry. The group is led by Commissioner Hester Peirce, whose term ends in June, although SEC chairman and commissioners can serve up to 18 months after their term expires if not replaced.
Seiberg said Peirce’s crypto task force lays the foundation for action, but the real work will require regulatory proposals that are subject to notice and comment.
“Those rules can be challenged in court,” he said. “The sooner the SEC proposes these changes, the more time there is for this process to play out before the next presidential election. We believe the agency’s actions so far indicate they understand the need for speed.”
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