Digital Assets: Executive Orders & What it May Mean for Broker-Dealers (Part I)

Digital Assets: Executive Orders & What it May Mean for Broker-Dealers (Part I)

On January 23, 2025, President Trump issued an Executive Order on Digital Assets (“January Order”) and a subsequent order on March 6, 2025 to establish the Strategic Bitcoin Reserve and United States Digital Asset Stockpile (“March Order”). The January Order established the President’s Working Group on Digital Assets Markets, which has 180 days to propose regulatory and legislative proposals that advance blockchain innovation while prohibiting the establishment of a Central Bank Digital Currency (“CBDC”). The January Order explicitly prohibits any federal agency from issuing or promoting a U.S. CBDC while empowering the U.S. government to stockpile Bitcoin.

Both Executive Orders strengthen the U.S. against BRICS nations (Brazil, Russia, India, China, and South Africa), which seek to disrupt U.S. dollar supremacy through the potential use of the digital yuan or a joint digital currency, to reduce reliance on the U.S. dollar in international trade.  Of note, the Working Group consists of both the Chairman of the Securities and Exchange Commission (“SEC”) and the Chairman of the Commodity Futures Trading (“CFTC”).

For broker-dealers and Alternative Trading Systems (“ATS”) platforms, this means closely monitoring whether the SEC, CFTC, or both will assume jurisdiction over digital assets and evolving with changing compliance obligations. If certain digital assets fall under CFTC jurisdiction, then firms wishing to deal in these products must be registered as a futures commission merchant (“FCM”) or operate through a registered exchange. Even still, these same non-security digital assets may become securitized as part of an investment contract. Additionally, if digital assets are classified as commodity securities, firms could be required to adhere to regulations governing the trading of such products. This presents regulatory crossroads:

• If digital assets move further into the commodities space, firms may need dual regulatory registration with FINRA and NFA
• Firms operating ATS platforms for digital assets will need to assess whether their activities require commodity futures registration

While the digital asset landscape has long been marked by jurisdictional ambiguity and regulatory hesitation, these recent Orders suggest a shift toward greater governmental involvement and clearer rulemaking. With the SEC and CFTC both seated at the table, broker-dealers may see signs of clarity in the coming days.