The White House’s Comprehensive Executive Order on Crypto
In March 2022, the White House issued an executive order (EO) on Ensuring Responsible Development of Digital Assets, aiming to establish a unified federal approach to crypto. The EO directed federal agencies to assess the benefits and risks of digital assets across financial stability, illicit finance, innovation, and consumer protection. Subsequent reports from the Treasury Department, Federal Reserve, and other agencies highlighted areas such as central bank digital currencies (CBDCs), regulatory gaps, and potential environmental concerns.
Building on this, the White House is expected to push for comprehensive legislation in 2025 to consolidate these findings into actionable policy. Key components could include:
Clear Regulatory Frameworks: Defining jurisdictional boundaries between agencies like the SEC and CFTC.
CBDC Development: Accelerating research and development of a U.S. digital dollar.
Consumer Protections: Ensuring transparency, reducing fraud, and promoting equitable access to digital assets.
Climate Concerns: Supporting sustainable crypto-mining practices.
This comprehensive approach signals that the U.S. government is increasingly recognizing crypto’s systemic importance while aiming to mitigate risks.
The Reversal of SAB 121 The Financial Accounting Standards Board (FASB) recently announced updates that effectively reverse Staff Accounting Bulletin (SAB) 121, a move with significant implications for cryptocurrency accounting. SAB 121, introduced in 2022 by the SEC, required companies to account for digital assets held on behalf of customers as liabilities on their balance sheets, with corresponding safeguarding obligations as assets. While it aimed to address investor protection, it faced criticism for its complexity and potential disincentive to adopt crypto-related services.
The reversal reflects evolving views on digital assets and recognizes the burden SAB 121 placed on institutions. With the FASB’s updated framework emphasizing fair-value accounting for crypto, companies can now present digital assets more transparently without artificially inflating liabilities. This marks a shift toward regulatory frameworks that encourage, rather than hinder, innovation in the crypto industry.
The Probability of a Strategic Bitcoin Reserve
Discussions about the U.S. potentially creating a Strategic Bitcoin Reserve (SBR) have gained momentum as Bitcoin solidifies its role as “digital gold.” Proponents argue that holding Bitcoin could enhance national financial security, especially in the face of de-dollarization trends and geopolitical shifts. Countries like El Salvador and private entities in other nations have already embraced Bitcoin reserves, sparking curiosity about whether the U.S. will follow suit.
However, establishing an SBR faces significant hurdles:
Volatility: Bitcoin’s price swings could introduce instability to national reserves.
Regulatory Resistance: Skepticism from policymakers and regulators could impede adoption.
Alternative Investments: Gold and other assets remain less contentious options for diversifying reserves.
Despite these challenges, the idea is not far-fetched. With growing institutional adoption and Bitcoin’s deflationary design, it could become a strategic asset for hedge purposes. The probability of an SBR remains low in the near term but could rise if Bitcoin gains greater mainstream and geopolitical utility.
Bottom Line:
The reversal of SAB 121, which had required companies to treat customer-held crypto as liabilities, marks a shift toward simpler and more crypto-friendly accounting rules, making it easier for businesses to engage with digital assets. Meanwhile, the White House is working on a broad plan to regulate cryptocurrencies, focusing on clear rules, consumer protections, and exploring a U.S. digital dollar. Lastly, there’s growing talk about the U.S. creating a Strategic Bitcoin Reserve, similar to gold reserves, to hedge against financial risks, but challenges like Bitcoin’s volatility and regulatory concerns make this unlikely for now.

