Trump’s Crypto Executive Order: TD Cowen Warns Regulatory Clarity Will Take Years
President Donald Trump has taken significant initial steps to support the cryptocurrency industry by signing an executive order aimed at fostering innovation within the digital asset market. However, investment bank TD Cowen warns that achieving meaningful regulatory clarity will require years of effort rather than the immediate impact some might expect.
Trump’s Executive Order: A Symbolic Start
On Thursday, President Trump signed an executive order establishing the Working Group on Digital Asset Markets. The primary mission of this group is to identify and eliminate barriers to crypto innovation, signaling the administration’s commitment to enhancing U.S. leadership in the cryptocurrency and blockchain sectors. The order also tasks the group with evaluating the feasibility of creating a national digital asset stockpile, though it stops short of implementing a Strategic Bitcoin Reserve as many had anticipated.
TD Cowen’s Perspective: A Long-Term Effort
Despite the proactive steps taken by the Trump administration, TD Cowen’s Washington Research Group, led by Jaret Seiberg, views the executive order as a preliminary and largely symbolic gesture. In a recent note, Seiberg stated, “This is the easy stuff. 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.”
Seiberg emphasizes that establishing comprehensive regulations for the crypto industry is a complex process that will take years to develop and implement. “Establishing the rules the industry needs will take years, not weeks,” he added, underscoring the substantial work still required to create a robust regulatory framework.
Evaluating a National Digital Asset Stockpile
One of the key initiatives in Trump’s executive order is the evaluation of a national digital asset stockpile. While this has fueled speculation about the potential creation of a Strategic Bitcoin Reserve, Seiberg remains skeptical. “We remain dubious as Trump’s priority is the U.S. dollar, which could be at risk as a reserve currency if countries turn to Bitcoin,” Seiberg explained. He reiterated that a Bitcoin reserve is unlikely to become a priority under Trump’s administration, which traditionally emphasizes the supremacy of the U.S. dollar in the global economy.
SEC’s Regulatory Shifts and Crypto Custodianship
In addition to Trump’s executive order, the U.S. Securities and Exchange Commission (SEC) has taken steps to ease regulatory pressures on the crypto industry. The SEC recently rescinded Staff Accounting Bulletin No. 121 (SAB 121), which previously required banks holding crypto assets for customers to classify them as liabilities. This repeal allows banks to act as crypto custodians, potentially increasing the accessibility and adoption of digital assets.
Moreover, the SEC has announced a new crypto task force led by Commissioner Hester Peirce. This group is tasked with developing a comprehensive regulatory framework for the crypto industry. However, Seiberg notes that significant regulatory proposals will need to undergo a notice and comment process, which can be lengthy and subject to legal challenges. “Those rules can be challenged in court. The sooner the SEC proposes these changes, the more time there is for this process to play out before the next presidential election,” he stated.
Market Reaction and Future Outlook
The cryptocurrency market has responded to these developments with cautious optimism. Bitcoin saw a modest increase, stabilizing around $105,000 after a brief surge, while Ethereum and major altcoins like Solana and XRP also posted gains. However, analysts like Seiberg caution that without concrete regulatory actions, the market may not see significant changes in the near term.
Nigel Green, CEO of deVere Group, remains hopeful about the future impact of the executive order. “The U.S.’s Strategic Bitcoin Reserve is not just a possibility but an inevitability, one that would set off similar policies worldwide. This could be the beginning of a fundamental shift in how wealth and power are stored and protected,” Green told. Meanwhile, Anchorage Digital CEO Nathan McCauley expressed optimism about the SEC’s new task force, stating, “We look forward to engaging with the president’s working group as Washington works to get it right on crypto.”