Trump’s Crypto Czar Places U.S. Bitcoin Reserve and More as Administration’s Top Priority
Stablecoin Regulations & SEC-CFTC Power Split Form Crux of the Discussions Amid Market Turmoil from Global Tariff Chaos
David Sacks, Trump’s ‘crypto czar’, has announced plans for the crypto working group established by the recently inaugurated president to explore the U.S. Bitcoin reserve and stablecoin regulations as a top priority.
Sacks made the assertion in his first press meeting conference on Tuesday alongside four congressional leaders: Senate Banking Committee Chair Tim Scott, House Financial Services Committee Chair French Hill, Senate Agriculture Committee Chair John Boozman and House Agriculture Committee Chair Glenn Thompson.
Trump’s Crypto Czar offer Stablecoin Payment Clarity
During the press conference, Senator Bill Hagerty announced the Clarity for Payment Stablecoins Act of 2024 which he nicknamed the “GENIUS Act”, co-sponsored by Senators Kirsten Gillibrand, Cynthia Lummis, and Tim Scott.
Furthermore, the working group will also collaborate with the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to draft a federal regulatory framework for digital assets and stablecoins.
The bill mandates that stablecoins pegged to the U.S. dollar maintain 1:1 reserves in cash, Treasurys, or liquid assets.
Additionally, Issuers must also publish monthly audits, avoid risky practices like rehypothecation, and comply with anti-money laundering laws. Nonbank issuers would fall under the Office of the Comptroller of the Currency (OCC), while smaller firms could settle for state oversight until reaching a $10 billion threshold.
The legislation which was promised to be passed within the first 100 days of the administration will also imposes a two-year ban on algorithmic stablecoins. This is to give the Treasury enough time to study their risks.
SEC and CFTC Get Different Oversight Functions
French Hill, House Financial Services Chair, highlighted the Financial Innovation and Technology for the 21st Century Act (FIT21), a bipartisan bill set to change crypto regulation in the US.
Under FIT21, the SEC and the CFTC would have different oversight powers. While the SEC would oversee digital assets controlled by centralized entities like Binance’s BNB, decentralized tokens like Bitcoin and possibly Ethereum would fall to the CFTC.
The regulatory push coincides with the SEC launching its first crypto task force, led by Commissioner Hester Peirce following the resignation of former chair, Gary Gensler.
Peirce criticized the agency’s past regulatory stance and pledged to clarify rules for token offerings, custody solutions, and staking programs. “We need frameworks that protect investors without stifling growth,” she said.
Sacks also criticized the SEC’s “arbitrary prosecution and persecution” of crypto firms under previous leadership, vowing to replace harsh enforcement with clear regulations.
