- Trump bans federal CBDC issuance, promoting private sector innovation.
- U.S. securities laws could adapt, easing digital asset trading.
- Impact: Major shift in U.S. crypto regulatory landscape.
Central banks are focusing on moderate liquidity and digital innovations. The U.S. restricts central bank digital currencies (CBDCs), endorsing private digital assets. European banks push wholesale CBDC pilots with distributed ledger technology. [*Source: Central Bank and U.S. Government Policies.*]
President Donald Trump enacted legislation on January 23, 2025, prohibiting federal central bank digital currency (CBDC) issuance, prioritizing private digital asset innovation in the United States.
The U.S. moves away from federal CBDC development, instead backing private sector involvement, impacting global digital currency efforts.
The President’s decision marks a pivotal shift in U.S. policy, aiming to safeguard financial stability and individual privacy. President Trump asserted that CBDCs threaten U.S. sovereignty, urging private innovation. The President’s Working Group on Digital Asset Markets will offer new regulatory structures, likely enhancing market clarity and supporting innovation.
The decision affects various industries by potentially fostering a more robust digital asset market. Stablecoin providers, in particular, are expected to benefit from enhanced regulatory support. The European Central Bank, meanwhile, advances wholesale CBDC pilots, aligning with digital innovation initiatives globally.
Financial implications include broader institutional participation in digital markets, with Tether’s $13.7 billion profit signaling increased involvement. The U.S. regulatory framework could further diversify financial services, paving the way for technological advancements and new opportunities in the sector.
The shift aligns with U.S. opposition to CBDCs, contrasting global efforts, especially within EU’s wholesale CBDC trials. Regulatory clarity may heighten institutional interest, affecting governance, asset classes, and compliance landscapes. These steps reflect strategic priorities aiming to reshape the financial ecosystem.
“Measures will be taken to protect Americans from the risks of CBDCs, which threaten financial system stability, individual privacy, and US sovereignty. This includes prohibiting the establishment, issuance, and use of CBDCs within the United States.” – Donald Trump, President, United States
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