Strengthening American leadership in digital financial technology (US White House)
U.S. President Donald Trump signed an Executive Order (XO) “prohibiting the establishment, issuance, circulation, and use of a central bank digital currency (CBDC) within the jurisdiction of the United States” on the grounds that they “threaten the stability of the financial system, individual privacy, and the sovereignty of the United States”. The XO uses the standard BIS (2020) CBDC definition: “a form of digital money or monetary value, denominated in the national unit of account, that is a direct liability of the central bank” which is a bit problematic, because it encompasses both retail and wholesale CBDC. It’s problematic because, by that definition, the Federal Reserve (Fed) is already running a WCBDC in the form of commercial bank reserve and settlement accounts. [Read more at the White House]
Instead, the White House could have followed the language of a bill introduced to the U.S. House of Representatives by Rep. Tom Emmers, the “CBDC Anti-Surveillance State Act“. It starts with the same CBDC definition as the White House XO, but goes on to narrow down the impact of the bill to prohibit the Fed from “offer[ing] products or services directly to an individual; maintain[ing] an account on behalf of an individual; or issu[ing] a central bank digital currency, or any digital asset that is substantially similar under any other name or label, directly to an individual [or] indirectly to an individual through a financial institution or other intermediary… [This] may not be construed to prohibit any dollar-denominated currency that is open, permissionless, and private, and fully preserves the privacy protections of United States coins and physical currency.” [Read the Emmers bill here]
The XO also says that “except to the extent required by law, agencies are hereby prohibited from undertaking any action to establish, issue, or promote CBDCs within the jurisdiction of the United States or abroad.
Trump orders crypto working group to draft new regulations, explore national stockpile (Reuters)
In the same XO, President Trump also ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile. The working group will include the Treasury secretary, chairs of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), but notably no one from the Federal Reserve or Federal Deposit Insurance Corporation (FDIC) . The XO also ordered that banking services for crypto companies be protected, alluding to industry claims that the Fed and FDIC have directed lenders to cut crypto companies off from banking services.
SEC rescinds SAB 121 freeing banks to provide digital asset custody (Ledger Insights)
The U.S. Securities and Exchange Commission (SEC) rescinded Staff Accounting Bulletin (SAB) 121, which required companies to put digital assets under custody as an asset and a liability on their balance sheet. Usually, as common sense would suggest, these such assets don’t go on the balance sheet because they belong to the client. This rule is especially problematic for U.S. banks because they are subject to capital requirements based on their balance sheet. The SEC had been exempting some banks from this requirement, but only for very specific assets. [Read more at the SEC]
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Upcoming Speaking Engagements:
- The Central Bank Payments Conference (Paris, February 17–19) will explore the latest issues and developments confronting central banks and their evolving role as operators, overseers, and catalysts within the payments landscape. The focus will be on cross-border payments, CBDC and tokenization, open finance, instant payments, and financial inclusion, among other topics. When you register get 15% off by using the Kiffmeister15 code. [register here]
- The Global Payments Summit (Paris, February 19–21), the second half of Currency Research Payments Week, will explore emerging payments trends and innovations, positioning the ecosystem’s commercial players — banks, PSPs, solution providers — at the center of the discussions. When you register get 15% off by using the Kiffmeister15 code. [register here]
- The Digital Euro Conference 2025 (Frankfurt, March 27) will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [register here]
And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.
