Day One: Order on Digital Assets/Crypto (and SEC SAB 121)

KPMG Insights

Digital/Crypto Push: Administration sets forth first action toward a “crypto policy”, to help facilitate additional ‘mainstream’ adoption.
Agency Actions: Shortly after the issuance of the EO, the SEC moved to rescind SAB 121. Expect additional swift agency actions (e.g., statements, guidance/frameworks).
Rules Coming: A “whole of government” Executive-level approach, along with expectation for Congressional and agency rules/actions.
De-banking: A call for broader acceptance for banking clients (inclusive of digital/crypto businesses) will still require financial companies to employ sound bank risk management practices.

In the area of crypto and digital assets/technology, the new Administration issues a new executive order entitled “Strengthening American Leadership in Digital Financial Technology”. This order intends to promote U.S. leadership in digital assets (defined to include cryptocurrencies, digital tokens, and stablecoins) and financial technology, while repealing a prior Administration executive order on digital assets and a related Treasury framework. Initial actions related to this order include the SEC’s repeal of Staff Accounting Bulletin (SAB) 121.

Executive Order:

Type	Action	Description
New	EO	“Strengthening American Leadership in Digital Financial Technology” Ensure access to blockchain networks for lawful transactions, development, self-custody, mining, and validating. Promote the development and use of dollar-backed stablecoins. Establish a President’s Working Group on Digital Assets Markets within the National Economic Council, to be chaired by the Special Advisor on AI and Crypto. Eleven members to include Treasury, DOJ, DOC, DHS, SEC and CFTC. Define the role of the Working Group to include identifying current regulations, guidance, order or other items impacting digital assets and recommendations for recission or modification. The Working Group is to also recommend regulatory and legislative proposals to advance the EO policy and to propose new regulatory framework focusing on market structure, oversight, consumer protection and risk management. Prohibit any U.S. agency from creating, issuing, or using Central Bank Digital Currencies (CBDCs). Look to promote banking services for individual citizens and private-sector entities engaging with digital assets, blockchain technology and related technologies.
Rescind/Repeal	EO 14067	“Ensuring Responsible Development of Digital Assets” Research/report on development of a CBDC framework. Enhance fraud protections / regulatory oversight on digital asset exchanges and trading platforms. Improve cross-border payment efficiency and address money laundering and cybercrime through international cooperation.
Rescind/Repeal	Treasury Framework	“Framework for International Engagement on Digital Assets” Promote international cooperation on digital asset principles and standards, including blockchain and CBDC standards. Address regulatory gaps, financial crime, and cross-border payment inefficiencies to enhance financial stability and consumer protection. Reinforce US leadership in the global financial system; engage with G7, G20, FATF, IMF, and World Bank to support standards aligned with U.S. values.

Related Actions:

Related actions have been taken by the SEC and the Senate Banking Committee, with the anticipation that more agencies/actions will follow.

The SEC announces the decision to rescind interpretive guidance in Staff Accounting Bulletin 121, entitled Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users, which will be effective upon publication in the Federal Register.
The SEC announces the launch of a new Crypto Task Force “dedicated to developing a comprehensive and clear regulatory framework for crypto assets.” It is expected to coordinate with federal departments and agencies and state and international counterparts, as well as to solicit public input.
The Senate Committee on Banking, Housing, and Urban Affairs announces the formation of a new Subcommittee on Digital Assets to “ensure the committee is at the forefront of legislation to provide regulatory clarity for the industry.”