President Trump on Thursday issued an executive order to support the growth of the cryptocurrency industry, calling for a new plan to regulate a business in which he has substantial personal investments.
The executive order, which was light on details, said the Trump administration would create a working group on digital assets to come up with a comprehensive plan including “regulatory and legislative proposals.” The group would also consider establishing a national cryptocurrency stockpile, the order said — a government-controlled stash of digital coins that the industry has spent months lobbying the new administration to create.
“The digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our nation’s international leadership,” the order said. “It is therefore the policy of my administration to support the responsible growth and use of digital assets.”
Mr. Trump has a significant personal stake in the success of the crypto industry. He and his sons last year helped start a crypto company called World Liberty Financial, which is selling a new digital currency called WLFI. This month, he and his wife, Melania, each began selling memecoins, a type of cryptocurrency inspired by an online joke or celebrity mascot.
The ventures have drawn criticism from ethics experts concerned about conflicts of interest. In effect, Mr. Trump is trying to write the rules for business ventures from which he may personally profit. He has vowed to end the Biden administration’s legal crackdown on crypto companies and made a series of personnel selections at key federal agencies that appear poised to boost the crypto industry’s prospects.
In the executive order, Mr. Trump said his administration was committed to “protecting and promoting” the crypto industry. He promised “fair and open access to banking services,” a response to complaints by crypto companies that banks have denied them accounts. And shortly after the order was issued, the Securities and Exchange Commission rolled back accounting guidance that had deterred banks from getting involved with crypto.
Still, Mr. Trump’s actions did not go nearly as far as many in the crypto industry had hoped. He did not order federal agencies to drop lawsuits against crypto companies, nor direct the government to start buying Bitcoin.
Among the more substantive elements of the order is a prohibition on the creation of a “central bank digital currency,” a type of cryptocurrency that is overseen by the government. Many crypto enthusiasts oppose the creation of such currencies on ideological grounds, and Mr. Trump vowed on the campaign trail to outlaw them.
But in an analysis of the order Molly White, a crypto researcher, noted that no federal agency has ever seriously pursued creating such a cryptocurrency. Ms. White called Mr. Trump’s order “mostly symbolic.”
A one-time skeptic who dismissed Bitcoin as a scam, Mr. Trump became an outspoken enthusiast for digital currencies on the campaign trail, as the crypto industry poured more than $130 million into high-profile congressional races. At a Bitcoin conference in July, Mr. Trump vowed to turn the United States into the “crypto capital of the planet.”
Then, in September, the Trump family started World Liberty Financial, which they marketed as a platform to facilitate borrowing and lending in digital currencies. Mr. Trump is not a direct owner of World Liberty Financial, but he receives a cut of the sales of WLFI, the cryptocurrency associated with the platform.
Since his election, Mr. Trump has moved to reshape the regulatory agencies that pursued crypto companies during the Biden administration. In December, he picked a new chair of the S.E.C. who has worked closely with crypto companies. And he tapped the venture investor and digital currency enthusiast David Sacks to oversee his administration’s policies on artificial intelligence and crypto.
But Mr. Trump’s most aggressive foray into the crypto market came on Friday night, when he announced a memecoin called $Trump. Sales of the cryptocurrency immediately spiked, adding tens of billions of dollars to Mr. Trump’s net worth, at least on paper. The price collapsed two days later, after Melania Trump announced that she was offering a memecoin, too.
The episode prompted outrage from crypto traders who said they felt burned by the back-to-back announcements and chaotic price movement. But the industry still has high expectations for the Trump administration. Crypto executives have lobbied him for months, hoping to secure his support for legislation that would defang the S.E.C. and boost the prices of the leading digital currencies.
Hours before Mr. Trump’s inauguration on Monday, the price of Bitcoin surged to a record of more than $109,000, as crypto supporters celebrated the ascent of a man they described as the first “Bitcoin president.”
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