Author: Wu Tianyi, DeThings
On January 23, US President Donald Trump signed an executive order to promote the development of US cryptocurrencies and commit to establishing a national digital asset reserve. Venture capitalist David Sacks, known as the "crypto tsar", co-signed the order with Trump.
The order states that "the digital asset industry plays a critical role in innovation and economic development in the United States and in the international leadership of our nation."
According to CoinDesk, China is planning to replace the US dollar. China and Russia have reduced their holdings of billions of dollars in US debt, while increasing their gold reserves. China, Iran and Russia are actively building a parallel cross-border economic system, not only bringing neighboring countries into their orbit, but also their allies with whom they have extensive trade relations.
At the same time, five departments including the People's Bank of China jointly issued the "Opinions on Promoting Institutional-level Opening-up in the Financial Sector in the Qualified Free Trade Zones (Ports) to Align with International High Standards". The document mentions "supporting mainland residents in the Guangdong-Hong Kong-Macao Greater Bay Area to purchase eligible investment products sold by Hong Kong and Macao financial institutions through Hong Kong and Macao financial institutions, and expanding the scope of participating institutions and eligible investment products". This policy may provide opportunities for the potential development of the crypto asset industry.
Is Bitcoin the key battlefield?
Most of the content of the executive order signed by Trump focuses on establishing cryptocurrency technology and rules, as well as its development in the US. One key item is the establishment of a working group to consider establishing a national digital asset reserve, "potentially from cryptocurrencies legally seized by the federal government through law enforcement actions".
The order also outlines other key priorities for the digital asset industry, including protecting individuals and private enterprises using blockchain networks from "persecution". The document details certain protections for developers and miners, stating that they should be able to freely "develop and deploy software" and "participate in mining and validation", recognizing the technical personnel who protect the Bitcoin network.
The President also promised to defend the rights of those who choose to self-custody their digital assets. This means they do not rely on centralized entities like Coinbase to custody tokens, but use personal crypto wallets, which are sometimes not regulated by the US Internal Revenue Service.
The order emphasizes promoting the US dollar's sovereignty by supporting the development of globally legitimate, US dollar-backed stablecoins.
CoinDesk said US policymakers are too narrowly focused on sanctions and pushing the dollar as a reserve currency as macroeconomic tools. The real battle is now taking place on smartphones and global currency markets. For example, more than half of Japanese companies accept Alipay, and more than a third accept WeChat Pay.
China is closely following the US's relevant Bitcoin policies. Wang Yongli, former deputy governor of the Bank of China, wrote in the 1st issue of "China Foreign Exchange" in 2025 that Bitcoin highly mimics gold in the "currency" layer, with its total supply and periodic new issuance completely set by the system, which is more stringent than gold (the actual reserves of gold are not clear), and the amount that can be used for exchange and transaction is more limited, and it cannot grow with the increase in tradable wealth, which does not meet the essential requirements of currency. Accompanying Trump's victory in the US presidential election, his proposed new Bitcoin policy has received widespread attention and heated discussion, which needs to be calmed down, rationally and objectively grasped, and avoid making subversive mistakes.
Previously, Zhou Xiaochuan, Vice Chairman of the Boao Forum for Asia and former Governor of the People's Bank of China, mentioned at the "Boao Forum for Asia New Year Outlook 2025" event that the recovery of the world economy in 2025 is full of uncertainties, and the industrial chain is forced to be reshaped. Global public debt is about to exceed 100 trillion US dollars, which will increase the external financing costs and exchange rate depreciation pressures of emerging markets and developing countries, and pose challenges to the fiscal sustainability of developed countries. The impact of digital encrypted assets on global financial stability and financial security needs to be vigilant.
Regarding the "Opinions on Promoting Institutional-level Opening-up in the Financial Sector in the Qualified Free Trade Zones (Ports) to Align with International High Standards" jointly issued by five departments including the People's Bank of China, Liu Honglin, a lawyer at Mayer Brown, said that with the active exploration of the Hong Kong SAR government in virtual asset regulation, such as the launch of virtual asset ETFs, it is worth looking forward to whether these products can be included in the cross-border wealth management connect in the future.
Combining the policy clauses, if Hong Kong's crypto asset products can provide investment channels for mainland investors through the wealth management connect, it will not only enrich the asset allocation options for mainland residents, but also become an important tool to promote the internationalization of the RMB. Once the scope of the cross-border wealth management connect is further expanded, virtual asset ETFs or on-chain bonds may be the first to be piloted, opening the door for the financialization applications of the blockchain industry.
Different attitudes towards CBDC
It is worth mentioning that Trump's executive order also prohibits the "establishment, issuance, circulation and use" of the US central bank digital currency (CBDC), and requires the working group to study the possibility of establishing and maintaining a national cryptocurrency reserve and a stablecoin regulatory framework.
The order to federal agencies to halt any potential CBDC development is one of Trump's campaign promises to the crypto industry during his presidential campaign.
Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered Bank, told Cointelegraph: "CBDC is dead under Trump. Instead, they are going the private stablecoin route, and the Fed is powerless." Government spokesman Brian Hughes told Reuters that "the Trump administration will provide a platform for government officials who are committed to defending the rights of the American people, America First, and ensuring the most effective use of taxpayers' money."
This rhetoric is consistent with the Republican Party's general skepticism of government intervention in the financial industry and the desire for widespread deregulation of the industry. Therefore, it is not surprising that CBDC has become a target, as CBDC has become the object of public privacy concerns.
Although some CBDC developers like the European Central Bank have stated that privacy is the top priority, it seems that few in the public believe this, which has hindered CBDC efforts. According to the CBDC Tracker, only 4 out of the 169 CBDC projects currently underway have been launched.
In contrast, as of July 24, the e-CNY app has attracted 180 million individual wallet users, and the cumulative transaction volume in the pilot areas has reached 7.3 trillion RMB (1 trillion USD). The mBridge project is expected to enter the Minimum Viable Product (MVP) phase in mid-2024. The project aims to explore a multi-CBDC platform shared by participating central banks and commercial banks, built on distributed ledger technology (DLT), to enable instant cross-border payments and settlements.
The mBridge project is the result of extensive collaboration since 2021 between the BIS Innovation Hub, the Bank of Thailand, the Central Bank of the UAE, the Digital Currency Research Institute of the People's Bank of China, and the Hong Kong Monetary Authority. The Saudi Central Bank joined in 2024.
In September 2024, Reuters reported that currently 134 countries (accounting for 98% of the global economy) are exploring digital versions of their national currencies, with nearly half of the countries in the late stage, while early movers like China, the Bahamas and Nigeria are already seeing usage pick up. The usage of the e-CNY has grown by nearly four times, reaching 7 trillion RMB (987 billion USD).
A study released by the Atlantic Council think tank on Tuesday showed that all G20 countries are researching central bank digital currencies (CBDCs), with 44 countries currently piloting them.
Dong Zhiyong, a scholar at Peking University, believes that the incentive mechanism of payment institutions is a challenge. Merchants do not need to pay fees to accept the digital RMB, which is good for them, but if the usage is not widespread, merchants will face additional administrative burdens and cannot earn commissions from the transactions, lacking the motivation to join. Therefore, he suggests establishing a reasonable fee mechanism and jointly exploring value-added services with payment institutions.
