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Action orders working group to start work on crypto

regulations

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Also orders banking services for crypto companies be

protected

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Order bans creation of US central bank digital currencies

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Trump had courted crypto cash during presidential campaign

(Adds late SEC move to rescind accounting guidance in paragraph

3)

By Hannah Lang and Trevor Hunnicutt

Jan 23 (Reuters) - U.S. President Donald Trump on

Thursday ordered the creation of a cryptocurrency working group

tasked with proposing new digital asset regulations and

exploring the creation of a national cryptocurrency stockpile,

making good on his promise to quickly overhaul U.S. crypto

policy.

The much-anticipated action also ordered that banking

services for crypto companies be protected, alluding to industry

claims that U.S. regulators have directed lenders to cut crypto

companies off from banking services - something regulators deny.

The order also banned the creation of central bank digital

currencies in the U.S. which could compete with existing

cryptocurrencies.

In another key action pushed for by the crypto industry, the

U.S. Securities and Exchange Commission late on Thursday

rescinded accounting guidance that had made it very expensive

for some listed companies to safeguard crypto assets on behalf

of third parties. The crypto industry said that guidance had

stymied digital asset adoption.

On the campaign trail, Trump courted crypto cash by pledging

to be a "crypto president" and promote the adoption of digital

assets. That is in stark contrast to former President Joe

Biden's regulators which, in a bid to protect Americans from

fraud and money laundering, cracked down on the industry, suing

exchanges Coinbase, Binance and dozens more, alleging they were

flouting U.S. laws. The companies deny the allegations.

Thursday's order was cheered by the crypto industry, which

had been pushing for the new administration to send a strong

signal of support in Trump's first few days in office.

"Today's crypto executive order marks a sea change in U.S.

digital asset policy," said Nathan McCauley, CEO and co-founder

of crypto company Anchorage Digital.

"By taking a whole-of-government approach to crypto, the

Administration is making a significant first step toward writing

clear, consistent rules of the road."

If implemented by the relevant regulators, Trump's order

has the potential to push cryptocurrencies into the mainstream,

regulatory and crypto experts said. It follows Tuesday's SEC

announcement that it was creating a taskforce to overhaul crypto

policy.

Bitcoin hit a fresh record high of $109,071 on Monday amid

investor excitement over the new crypto-friendly administration,

although it was down to about $103,000 as of late Thursday

afternoon.

"Just days into his administration, President Trump is

delivering on his promises... to keep the United States a leader

in digital assets innovation," Senator Tim Scott, the Republican

chair of the Senate Banking Committee, said in a statement.

The industry has for years argued existing U.S.

regulations are inappropriate for cryptocurrencies and have

called for Congress and regulators to write new ones clarifying

when a crypto token is a security, commodity or falls into

another category.

The working group, which will include the Treasury

secretary, chairs of the SEC and Commodity Futures Trading

Commission, along with other agency heads, is tasked with

developing a regulatory framework for digital assets, according

to the order. That includes stablecoins, a type of

cryptocurrency typically pegged to the U.S. dollar.

The group is also set to "evaluate the potential

creation and maintenance of a national digital asset

stockpile... potentially derived from cryptocurrencies lawfully

seized by the Federal Government through its law enforcement

efforts."

The order did not provide further details on how such a

stockpile would be set up and analysts and legal experts are

divided on whether an act of Congress will be necessary. Some

have argued the reserve could be created via the U.S. Treasury's

Exchange Stabilization Fund, which can be used to purchase or

sell foreign currencies, and to also hold bitcoin.

In December, Trump named venture capitalist and former PayPal

executive David Sacks as the crypto and artificial

intelligence czar. He will chair the group, the order said.