President Trump directs federal agencies and central bank to reassess cryptocurrency companies' connectivity to national financial infrastructure.

In a significant move to modernize the nation's financial landscape, US President Donald Trump issued an executive order on Tuesday, instructing federal agencies to revamp their regulatory frameworks and seamlessly integrate digital assets and cutting-edge technologies into the country's traditional financial systems. The directive aims to stimulate the growth of financial technology services, incorporating them into the existing payment and financial infrastructure.

As outlined in the order, the US government's objective is to simplify regulatory processes, eliminate unnecessary hurdles, and foster cooperation between fintech companies, federally supervised financial institutions, and federal financial regulators. To achieve this, the heads of financial regulatory bodies have been tasked with conducting a comprehensive review of their current rules over the next three months, with a focus on identifying any regulations that unjustly hinder fintech firms from forming partnerships with federally regulated entities.

Within a six-month timeframe, regulators have been instructed to implement measures that promote innovation, based on the findings of the review. One key aspect of this initiative involves the Federal Reserve Board of Governors reassessing its approach to granting access to payment accounts and services for uninsured depository institutions and non-bank financial companies. Additionally, the 12 Federal Reserve banks will be asked to consider whether they can independently provide payment accounts, which could potentially benefit special purpose depository institutions in Wyoming and similar entities.

Notably, the Federal Reserve Bank of Kansas has already granted limited access to a master account to Kraken, a Wyoming-based special purpose depository institution, earlier this year. Other companies have also sought similar access, and the Federal Reserve is currently working on developing a more formal "skinny" master account, having published a proposal in December to facilitate access for certain firms. This executive order is one of two signed by Trump on Tuesday, with the other directive focused on strengthening the Bank Secrecy Act to prevent undocumented immigrants from accessing bank accounts or payment services. The Treasury Department and financial regulators have been tasked with exploring ways to combat the use of unregistered money services businesses, third-party payment processors, and peer-to-peer platforms to facilitate undocumented wage payments that bypass reporting thresholds and tax obligations.