Trump’s first-day executive order focuses on cryptocurrency business and lists it as a priority

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According to The Washington Post, David Sacks and the Trump transition team are working closely with cryptocurrency industry leaders to develop legislative strategies. Trump is expected to sign an executive order on his first day in office, which may involve “debanking” and the abolition of the controversial cryptocurrency accounting policy requiring banks to include digital assets in their balance sheets. This move signifies that the U.S. government may formally promote the institutional reform and regulation of the cryptocurrency market.

The announcement has immediately attracted significant attention from both the cryptocurrency industry and the traditional financial sector. This executive order not only carries the expectations of the global cryptocurrency industry but also has far-reaching implications for the U.S. financial ecosystem and the global competitive landscape.

This article will focus on this executive order, exploring its potential impacts and the strategic intentions behind it.

In recent years, the regulatory uncertainty in the U.S. cryptocurrency market has led to the outflow of numerous innovative companies. Trump’s decision to prioritize the cryptocurrency industry demonstrates his team’s awareness of the importance of blockchain technology for the future economy. Through this initiative, they aim to attract capital back to the U.S. and enhance the country’s competitiveness in the global fintech field.

Let us return to the executive order itself. The Trump team’s planned executive order focuses on two main aspects:

“Debanking” Strategy: The so-called “debanking” refers to reducing the dominance of traditional banks in the financial system and providing more open and free financial tools for individuals and businesses. This aligns closely with the core decentralized philosophy of cryptocurrency. Through this measure, the U.S. government may seek to alleviate traditional financial institutions’ control over the market, encourage financial innovation, and promote freer capital flow.

Cryptocurrency Accounting Policy Reform: Currently, U.S. banks holding cryptocurrency must classify it as liabilities under traditional accounting practices. This policy increases financial risks for banks and discourages them from participating in the crypto ecosystem. The Trump team plans to abolish this policy, paving the way for traditional financial institutions to hold and trade digital assets on a larger scale.

Understanding the core of this policy and its background is crucial for effective analysis. The “debanking” approach is not about completely eliminating the role of traditional financial institutions but about providing more opportunities for ordinary users to participate directly in financial activities through decentralized means. This idea aligns with the essence of blockchain technology’s decentralization. The Trump team aims to build a more open and equitable financial environment through the executive order, thereby reducing the reliance of ordinary users on traditional banking intermediaries.

The cryptocurrency accounting policy reform is intended to lower the barriers for traditional financial institutions to enter the cryptocurrency market. At present, U.S. banks must list cryptocurrency holdings as liabilities, which increases financial pressure and limits their participation in the market. By abolishing this policy, the Trump team hopes to encourage more traditional financial institutions to engage in the crypto sector, injecting larger-scale capital and trust into the market.

Such policy adjustments are undoubtedly a significant move to seize the initiative in financial innovation. In recent years, the lack of clear regulations in the U.S. has driven many crypto companies to relocate to crypto-friendly regions such as Singapore and Switzerland. This not only diminished the U.S.’s influence in global fintech competition but also deprived local companies of policy benefits. By making the cryptocurrency industry a priority, Trump seeks to leverage policy advantages to attract capital back, injecting new growth momentum into the U.S. economy.

Beyond policy changes, the executive order may trigger a series of ripple effects. In the short term, the crypto market may experience rapid price and trading volume increases, especially for major assets like Bitcoin and Ethereum, which are likely to see significant fluctuations due to heightened market confidence. Additionally, the policy could attract more institutional investors, increasing overall market depth and stability. However, such rapid changes might also introduce speculative risks, and overinflated expectations could lead to another bubble.

It is worth noting that this policy could also have profound implications for the global financial competition landscape. The U.S. move might prompt Europe and Asia to reevaluate their cryptocurrency policies to avoid falling behind in global competition. For instance, Europe might expedite the implementation of its “Markets in Crypto-Assets” (MiCA) regulation, while Asia could strengthen regional cooperation to promote blockchain technology innovation.

From the Trump team’s strategic perspective, this initiative is not merely about developing the cryptocurrency industry but also about reforming financial rules to attract voter and investor support. Currently, the U.S. faces dual challenges of inflationary pressure and economic slowdown, and the cryptocurrency industry, as a fusion of emerging technology and finance, is seen as a key driver of future economic transformation. Furthermore, Trump’s decision to prioritize this issue reflects his team’s keen awareness of young voters’ preferences. Data shows that younger voters are significantly more receptive to cryptocurrencies, and favorable crypto policies could garner greater political support for Trump.

However, the formulation and implementation of policy are never simple processes. Whether this executive order can truly be implemented depends on overcoming several challenges. Firstly, the complexity of policy implementation cannot be ignored. The “debanking” strategy, as a disruptive approach to the traditional financial system, is likely to face strong opposition from financial institutions. Finding a balance between reform and stability will be a primary challenge for the Trump team. Secondly, international regulatory coordination is another obstacle. If the U.S. excessively relaxes its regulations on the cryptocurrency industry, it may provoke resentment from other countries and potentially destabilize the global financial market.

Despite these challenges, the policy sends a strong signal: the U.S. government is attempting to shed its previous ambiguity toward the cryptocurrency industry and create greater room for growth through proactive policy guidance. For the crypto market, this represents a rare historical opportunity. However, market participants should remain rational, be cautious of short-term risks brought about by policy incentives, and pay close attention to the details of policy implementation to seize the core advantages of this policy.

This cryptocurrency-focused policy reform is not just a simple financial adjustment but a game involving global financial rules. From “debanking” to cryptocurrency accounting policy reform, the Trump team is reshaping the future financial market landscape in unprecedented ways. Regardless of the outcome, this will be an important milestone in the history of cryptocurrency development. For every market participant, the ability to seize opportunities during this transformation will determine their success in the future competition.

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