Trump Executive Order Could Ease Bank Ownership of Crypto Assets

Trump executive order could ease bank ownership of crypto assets, boosting innovation and increasing financial institutions’ involvement in digital assets.

Circle CEO Jeremy Allaire recently discussed the potential for significant changes in the regulation of digital assets in the U.S. He noted that US President Donald Trump could soon sign an executive order to loosen rules on banks owning crypto assets. Reuters reported that this move is expected to prompt financial institutions to take a wider role in the digital asset area.

Allaire stressed that repealing the US Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB 121) is essential. Right now, this regulation is what prevents financial institutions from placing cryptocurrencies on their balance sheet, he said, which he believes has held the industry back from achieving its growth potential.

Allaire says that this has restricted banks and corporations from completely embracing crypto assets. The company behind the USDC stablecoin, Circle, is a major player in the digital asset market. Additionally, USDC is the second-largest stablecoin by market value and one of the ten biggest cryptocurrencies.

Circle CEO Allaire Favours Trump Executive Orders to Unlock Bank Crypto Potential

Trump, who has called for cryptocurrencies to be embraced, said he would be a ‘crypto president’. His administration is expected to focus a lot on reducing regulatory obstacles and pushing for the acceptance of digital currencies. His own cryptocurrency saw a boom, rising to nearly $12 billion in market value within a few days of his inauguration.

Allaire supported the potential executive orders. Removing SAB 121 allows more opportunities for banks, he says. Several banks have already worked with Circle. This makes them well positioned to benefit from these changes.

Allaire also expects Congress to take a bigger role in digital asset regulation. He foresees heightened legislative activity over the weeks ahead. They will be focused on shaping digital finance’s future.

On the other hand, industry experts like Faryar Shirzad, also foresee that regulatory changes will occur more quickly. Coinbase’s Chief Policy Officer Shirzad expects ‘the SEC to act soon’. Such a development could spur banks deeper into the world of crypto custodial services.

In conclusion, these regulatory changes could serve as a turning point. They provide hope that they will stoke innovation. Moreover, they hope the changes will also entice more financial institutions to adopt digital assets.