(Kitco News) - The Trump administration has taken a major step in the realm of digital assets with a newly signed executive order titled "Strengthening American Leadership in Digital Financial Technology" and the next six months will be crucial for the National Digital Asset Stockpile as well as the crypto industry in general, according to Deven Soni, CEO & Chairman of Matador.
The executive order establishes a working group to advise the White House on digital asset policies and tasks the group with exploring a national digital asset stockpile, composed of cryptocurrencies lawfully obtained by federal law enforcement.
According to the CEO of Matador Technologies, Deven Soni, "what we're going to see is more progress in the U.S. and crypto in the next six months than we've seen in the last 10 years."
Soni noted that the executive order's timeline is significant, as "Bitcoin's been around since 2009 and in the popular mind since 2014, 2015, 2016". He believes the next six months will bring more clarity to the crypto space, allowing companies to build more confidently.
Key Components of the Executive Order
- A presidential task force on digital asset markets will be chaired by David Sacks, a special advisor on AI and cryptocurrency, and include top officials such as the Treasury secretary, attorney general, SEC chair, and the CFTC chair.
- The working group excludes the Federal Reserve and the Federal Deposit Insurance Corporation.
- The President's Working Group is required to review prior cryptocurrency policies and submit updated recommendations within 60 days.
- A comprehensive report with proposals for a regulatory framework covering digital assets, and stable coins is due in six months.
- The order bans federal agencies from promoting or issuing central bank digital currencies (CBDCs).
Bitcoin's role
While the executive order does not directly mention Bitcoin, it tasks the working group with evaluating the feasibility of a national digital asset reserve built from cryptocurrencies seized by the federal government.
According to Soni, the administration's message is that America is "the world leader in crypto". While Bitcoin is the number one cryptocurrency by market cap, the order recognizes that innovation extends to other areas, such as tokenized securities, assets, and stablecoins.
Stablecoins and the U.S. dollar
A key aspect of the executive order is the promotion and protection of the sovereignty of the U.S. dollar, including the growth of lawful and legitimate dollar-backed stablecoins worldwide.
The executive order aims to promote the use of stablecoins, seeing them as a benefit to the dollar rather than a detriment. "The government is straight out saying that these are actually helping the dollar not harming the banking system. You're going see a whole lot more people utilizing these assets," Soni said.
The order bans federal agencies from issuing CBDCs, which is intended to prevent a global arms race for CBDCs and maintain the U.S. dollar as the global reserve currency.
“The biggest obstacle for crypto, in the U.S. at least, has been maintaining the strength of the dollar. What they're saying very clearly is that CBDCs are lot more of a threat than Bitcoin is to the dollar. Bitcoin can be an ally. What they don't want is this arms race for CBDCs globally,” Soni stated.
SEC Repeals Accounting Bulletin 121
In another development, the Securities and Exchange Commission (SEC) has repealed Staff Accounting Bulletin 121, which was a key roadblock that kept banks from offering crypto services.
The new directive, announced through Staff Account Bulletin 122, explicitly withdraws the earlier guidance that forced banks to include crypto holdings on their balance sheets.
Soni remarked that the repeal of SAB 121 will allow custodians to onboard clients onto crypto without major adverse risks to their balance sheets and credit ratings.
Tokenization
This comes as Larry Fink, BlackRock's CEO, has urged the SEC to quickly approve the tokenization of bonds and stocks.
Tokenization has the potential to create liquidity in markets that have not been liquid before, according to Soni, and that streamlining the path to liquidity could lead to more products being created for both institutional and retail investors.
Matador
Soni also expanded on Matador, which is building a digital gold product on top of the Bitcoin blockchain that lets users hold gold in their digital wallets the same way they hold Bitcoin.
As regulatory clarity emerges, the company expects to see more innovative, distributed products and increased user adoption.
