Posted July 26, 2024 at 5:14 pm EST.
NASHVILLE, Tenn. — Former President Donald Trump is set to be a keynote speaker at the Bitcoin Conference this Saturday, plus host a campaign fundraiser where a seat at dinner with Trump is $844,600, the maximum allowed by any one person. (A chance to get your picture with him is either $60,000 a pop or $100,000 for couples.)
This appearance caps off a few months of strong overtures to the crypto industry, which includes adding a crypto plank to the Republican Party platform, which begins, “Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown.” And on Saturday, he may offer up an additional one: for the U.S. government to create a strategic Bitcoin reserve.
Read more: What Would Trump Announcing a U.S. Bitcoin Strategic Reserve Mean?
But prior to that, over the last three months, Trump has promised many things in his quest to be a pro-crypto, pro-bitcoin, pro-innovation, pro-digital assets President. Specifically, Trump has pledged the following:
- Never allow the creation of a central bank digital currency (CBDC) in the U.S.
- End what he calls Biden’s “war on crypto” and keep Elizabeth Warren and her “goons” away from people’s crypto
- Ensure the future of cryptocurrencies and Bitcoin will be made in America, which alludes to the idea that Trump wants the rest of Bitcoin to be mined in America
- Free Ross Ulbricht, the Silk Road founder, from prison
Most of Trump’s promises to the crypto community are: (1) not something the President has the power to do on his own, (2) are very broad in concept without specifics on how they would be realized, and (3) are reversals of his past positions, including when he was President. Prominent figures such as the Winklevoss Twins and Kraken’s founder Jesse Powell have donated $1 million dollars in crypto each, and many other crypto luminaries have donated as well. (In the case of the Winklevoss Twins, they were refunded part of their donation as the maximum allowable is $844,600.)
Read more: Why a Trump Presidency Could Be Even More Bullish for Crypto Than You Think
These crypto benefactors filling Trump’s campaign war chest obviously expect major changes. The question is, can the former President deliver on these promises?
Trump’s Ability to Deliver on a Crypto Industry Wish List
End the ‘War on Crypto’
Last winter, the SEC passed staff guidance known as SAB121 that has prevented banks from custodying crypto. Even after the Senate voted to repeal that guidance, Biden vetoed that repeal, explicitly demonstrating the Biden Administration’s hostility toward crypto. The crypto industry has also argued that there has been an ‘‘Operation Choke Point 2.0,” where it appears the Administration has been purposefully trying to cut crypto companies off from traditional banking services.
Read more: In the Ongoing SAB 121 Fight, Here’s How Crypto Can Move Forward With Bipartisan Support
More recently, Biden seemed a bit less hostile to crypto when the House passed the Financial Innovation and Technology for the 21st Century Act (FIT 21) legislation. At that time, his administration released a statement saying although he didn’t support FIT21, he wanted to work with Congress to come up with new legislation.
Trump’s promise to “end Biden’s war on crypto” and make the U.S. the leader in cryptocurrency and innovation indicates he would work to end Operation Choke Point 2.0 and sign into law rather than veto pro-crypto bills passed by Congress. Trump would need the new Congress in 2025 to produce pro-crypto legislation for him to sign into law for his promise to be most effective.
Also, if anything is at the top of the crypto industry’s wish list and would go furthest toward ending the war on crypto, it is the replacement of SEC Chair Gary Gensler. However, Trump, who through custom would likely get to name a Republican SEC Chair—barring an unforeseen event like Gensler fighting a new nominee being appointed in the Senate—has not made this explicit promise yet, nor has he described how important it is that his nominee to the SEC be one that is pro-crypto. Even so, Trump as President would be reliant on any new SEC Chair that he nominates to carry out a pro-crypto agenda at the regulatory level where the crypto industry tends to feel the most pain.
No CBDC
As for a central bank digital currency, in 2022, Biden signed Executive Order 14067 that included exploring the benefits of a U.S. Central Bank Digital Currency (CBDC). Trump promised back in January that he would “never allow the creation of a central bank digital currency.” The crypto industry has expressed concerns over both the privacy impacts as well as how the U.S. CBDC could co-opt the growth of crypto itself.
Trump likely cannot stop the Federal Reserve from creating a CBDC on his own, since the Fed is an independent agency that sets monetary policy such as inflation. In March, Federal Reserve Chair Jerome Powell testified before Congress that the Fed is not ‘remotely close’ to issuing a CBDC. However, the Fed has been exploring the issue, and Powell explained that such a currency would be issued by the government through the traditional banking system, the way that dollars are circulated among the population today. He added that this would raise the possibility that the government could see citizens’ transactions, which he said is not what “we would stand for or do or propose here in the United States.”
To fulfill his vow, Trump would need to use the judicial branch to stop a CBDC as well as get support from Congress in the form of a new law amending the Fed’s powers to fulfill this promise.
Read more: Regulated Dollar Stablecoins Created by a Proposed New Senate Bill Would be Crypto’s Ultimate Trojan Horse
Bitcoin ‘Made in the USA’
On June 13, after a closed door meeting with bitcoin miners, Trump announced on Truth Social, “Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left. We want all the remaining Bitcoin to be MADE IN THE USA!!!” While there has not been clarity as to exactly what this means, the concept appears to be that the remainder of bitcoin should be mined here in the United States, which, because Bitcoin is decentralized, is impossible for anyone, let alone Trump, to force.
However, it seems that he may just be signaling that the U.S. is welcoming to Bitcoin miners. On July 9th, the Republican National Committee (RNC) passed a draft of a policy platform that actually addresses crypto first in an emerging technologies section, ahead of artificial intelligence (AI) and freedom and prosperity in space. In the ‘Champion Innovation’ section, the policy states, among other things, “We will defend the right to mine Bitcoin.”
Free Ross Ulbricht
The Biden Administration has not publicly mentioned anything regarding clemency for Ross Ulbricht. Trump’s promise to free Ulbricht was made on May 25 at the Libertarian National Convention. “On Day One, I will commute the sentence of Ross Ulbricht,” said Trump to a crowd that reacted with enthusiasm.
Whether the libertarian party translates to the entire crypto industry wishing for Ulbricht to be pardoned is not clear; however, many have made it clear that a promise to ‘Free Ross’ earns their vote. This is the one area where Trump can easily deliver on his pledge to offer clemency and make Ross a free man.
Ultimately, when industry supporters donate to the former President’s campaign war chest and say that a vote for Trump supports crypto, they are taking a leap of faith not just regarding what he will do, but in terms of the fact that a President doesn’t always have the power to make the kinds of changes that he is promising to the industry.
Read more: As President Biden Drops Out, Where Do Kamala Harris and Other Potential Candidates Stand on Crypto?
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