Investing.com -- President Donald Trump’s administration has taken its first steps to advance its crypto agenda, but laying the foundation for a robust regulatory framework will require significant time, according to analysts at TD Cowen.
The U.S. President recently signed an executive order establishing the Working Group on Digital Asset Markets, which includes the Treasury secretary and the chairs of the SEC and CFTC.
The group is tasked with identifying barriers to crypto innovation. Meanwhile, the SEC repealed Staff Accounting Bulletin 121 (SAB 121), which had required banks holding crypto for customers to treat those assets as their liabilities, a move that could pave the way for banks to act as digital asset custodians.
While these developments signal the administration’s prioritization of crypto, TD Cowen views them as low-hanging fruit.
"This is the easy stuff. Every President sets up commissions and task forces on key issues. It is symbolically important as it reflects how Team Trump prioritizes crypto, but it is not the same as rule changes," the analysts noted.
The real challenge lies ahead, says the bank. "Establishing the rules the industry needs will take years, not weeks," TD Cowen stated, emphasizing that regulatory proposals will need to go through a formal notice-and-comment process and could face court challenges.
Senator Cynthia Lummis is also making waves, retaining Bitcoin seized by law enforcement to create a strategic reserve. However, TD Cowen remains skeptical, citing Trump’s focus on preserving the U.S. dollar’s status as the world’s reserve currency.
The firm believes the SEC’s actions so far demonstrate urgency, but creating a comprehensive framework will require significant effort and time.