This was the primary main crypto-related coverage shift below the brand new appearing Chair Mark Uyeda. President Donald Trump issued an govt order stopping the event of a US central financial institution digital foreign money (CBDC) and established a working group to place the US as a pacesetter in cryptocurrency. Nevertheless, Bitcoin advocates criticized the shortage of give attention to Bitcoin particularly within the plan. In the meantime, Senator Elizabeth Warren clashed with Elon Musk, chair of the Division of Authorities Effectivity (DOGE), over authorities spending reforms.
SEC Cancels Controversial SAB 121
The Securities and Change Fee (SEC) canceled its very controversial Workers Accounting Bulletin (SAB) 121, which required monetary companies holding cryptocurrency for patrons to report the belongings as liabilities on their stability sheets. The choice was introduced on Jan. 23 of 2025 by way of a brand new Workers Accounting Bulletin. This can be a big win for the crypto trade, which has been towards the rule because it was launched again in March 2022.
Hester Peirce, SEC Commissioner and head of the company’s crypto process pressure, celebrated the transfer in a social media put up by saying, “Bye, bye SAB 121! It’s not been enjoyable.” The rule confronted a whole lot of criticism from each lawmakers and trade stakeholders for creating pointless administrative burdens on monetary companies. Critics argued that requiring reserves towards custodial crypto belongings was inconsistent with customary practices within the monetary providers trade.
Home Monetary Providers Committee Chair French Hill referred to as SAB 121 “misguided” and praised its cancellation. Consultant Wiley Nickel additionally factors out some issues about how the rule might have prevented US banks from custoding crypto exchange-traded merchandise (ETP), probably concentrating dangers in non-bank entities. Senator Cynthia Lummis described the rule as “disastrous for the banking trade” and a roadblock to American innovation in digital belongings.
The rule’s cancellation marks a really large coverage shift below the SEC’s appearing chair, Mark Uyeda, and the primary main crypto-related regulatory change below President Donald Trump. Efforts to cancel SAB 121 beforehand acquired bipartisan help in Congress, however a repeal invoice was vetoed by former President Joe Biden in June of 2024. An try to override the veto additionally fell brief within the Home of Representatives.
New Govt Order Units Anti-CBDC Stance in Movement
US President Donald Trump additionally just lately signed his first govt order affecting the cryptocurrency trade. In a televised deal with from the Oval Workplace on Jan. 23, Trump appeared alongside his “AI and crypto czar,” David Sacks, who supplied extra particulars in regards to the order. The manager order establishes an inner working group whose essential aim shall be to make the USA the worldwide chief in cryptocurrency. Sacks was appointed to chair the initiative.
The order additionally prohibits the institution, issuance, circulation, and use of a US central financial institution digital foreign money (CBDC) and directs the working group to discover the creation of a nationwide cryptocurrency stockpile and a regulatory framework for stablecoins. The group is predicted to incorporate quite a lot of key folks to the group just like the US treasury secretary, lawyer common, chairs of the SEC and Commodity Futures Buying and selling Fee (CFTC), and different company heads.
The directive additionally revokes a March 2022 govt order from former President Joe Biden, which had referred to as on federal companies to develop a regulatory framework for cryptocurrencies. Moreover, Trump additionally pardoned Silk Street founder Ross Ulbricht, which was one other pledge he made throughout his presidential bid.
Whereas the chief order might sign a serious change within the US authorities’s strategy to cryptocurrency, there are nonetheless many questions on the authority of those directives. For example, Trump just lately signed an order attempting to revoke birthright citizenship below the 14th Modification, which was in a short time blocked by a federal choose as unconstitutional. Equally, the feasibility and influence of the brand new crypto-focused initiatives are but to be seen.
Trump’s Digital Asset Stockpile Plan Criticized
Bitcoin advocates are a bit disenchanted over the language that was utilized in US President Donald Trump’s govt order to check the creation of a “digital asset stockpile,” which didn’t point out Bitcoin explicitly. Critics raised issues that the stockpile might embrace different cryptocurrencies as an alternative of focusing solely on Bitcoin, regardless of Trump’s marketing campaign promise to ascertain a “strategic nationwide Bitcoin stockpile.” This promise was made throughout a Nashville Bitcoin convention in July final yr, the place he urged utilizing the over $20 billion value of Bitcoin that was seized by the Justice Division.
Podcaster Peter McCormack identified the shortage of the phrase Bitcoin within the govt order, whereas Travis Kling, Chief Funding Officer of Ikigai Asset Administration, revealed that persons are fairly annoyed about using the time period “digital belongings.” Dennis Porter, CEO of the Bitcoin-focused Satoshi Motion Fund, defended the language by calling it “pragmatic” and “tech impartial” to keep away from political friction. He argued it might assist obtain the aim of constructing the US the biggest holder of Bitcoin globally.
For now, it looks like trade leaders are nonetheless very divided on the matter. Pierre Rochard, Vice President of Analysis at Riot Platforms, accused Ripple Labs of lobbying towards a Bitcoin-only reserve to advertise CBDCs constructed on its platform. Ripple CEO Brad Garlinghouse dismissed these claims after stating that Ripple’s efforts are growing the chance of a crypto strategic reserve, which might embrace Bitcoin.
At present, the US authorities holds a various portfolio of many cryptocurrencies, together with $20.4 billion value of Bitcoin, which accounts for nearly 98% of its holdings, alongside $182 million value of Ethereum and numerous altcoins.
US Authorities crypto holdings (Supply: Arkham Intelligence)
The idea of a digital asset stockpile sometimes refers to a reserve that’s maintained for emergencies or future use. That is totally different from a strategic reserve asset, which is meant to spice up a nation’s monetary power.
Senator Warren and Elon Musk Conflict
In the meantime, US Senator Elizabeth Warren wrote an open letter to Elon Musk, who’s the chair of the Division of Authorities Effectivity (DOGE), and proposed measures to cut back wasteful authorities spending. Warren’s recommendations embrace totally funding the Inside Income Service (IRS), closing the carried curiosity loophole, and introducing a capital positive aspects tax on estates.
Most of her measures goal rich people, and Warren believes that reforms to property tax exemptions might tremendously enhance federal income. She estimates that eliminating the stepped-up foundation for belongings transferred at dying might save over $60 billion yearly.
Warren can be involved about DOGE’s management and potential conflicts of curiosity, and accused the committee of fostering corruption due to its inadequate moral requirements. Though they’re impossible allies, Warren and Musk share a minimum of some overlapping objectives in terms of bettering authorities effectivity, although their approaches are very totally different.
Warren argues that totally funding the IRS might generate huge returns by cracking down on tax evasion and enhancing taxpayer providers. Nevertheless, Musk and President Trump confirmed resistance to increasing the IRS. Musk, whereas initially bold about chopping $2 trillion in authorities spending, modified expectations to a possible $1 trillion as a result of challenges posed by necessary spending applications like Medicare and Social Safety, which account for the majority of federal expenditures.