6 Crypto Reforms to Expect Under Trump
Key Takeaways
- Donald Trump became the 47th president of the U.S. and the crypto industry anticipates major changes, as he plans to implement pro-crypto policies.
- Trump has promised several reforms that suggest a more collaborative regulatory environment may be on the horizon.
- His opposition to CBDCs, commitment to self-custody, and tax relief on Bitcoin transactions resonate with crypto advocates.
- While Trump’s promises hint at a favorable crypto landscape, achieving these reforms will require navigating complex legal challenges.
In the wake of Donald Trump’s recent 2024 election win, speculation is buzzing around his potential impact on the crypto industry. Bitcoin has already hit a new all-time high, signaling a wave of excitement among crypto investors and stakeholders as they anticipate changes ahead.
Once a skeptic, Trump’s perspective on cryptocurrency has transformed over recent years, becoming a central part of his campaign. Now, as president, he’s expected to deliver on several pro-crypto campaign pledges, with promises to reshape the regulatory landscape and introduce policies that could significantly affect crypto’s future in the U.S.
In this article, we’ll explore the key reforms Trump has pledged to pursue and what they could mean for the crypto industry moving forward.
6 Crypto Reforms to Expect Under Trump
Trump himself has promised a couple of policies when he enters office, although whether and how he’ll actually implement them will only become clear in time. For now, let’s take a look at his promises relating to crypto to get a taste of what’s to come.
1. Remove Gary Gensler as SEC chair
“On day one I will fire Gary Gensler and appoint a new SEC.”
Trump has openly criticized the SEC’s approach to cryptocurrency regulation and promised to remove its Chair Gary Gensler. His statements address growing frustration within the crypto community over Gensler’s perceived overreach. The SEC has taken a hardline stance on crypto, bringing a list of lawsuits against major crypto companies and applying stringent securities laws that many argue stifle innovation.
Trump seized on this as an election platform, garnering huge support from the crypto community. While he’s yet to name a successor, the removal of Gensler could lead to a more crypto-friendly regulatory environment. This change could signal a shift towards a more lenient SEC that prioritizes fostering innovation and collaboration with crypto firms over enforcement.
2. Oppose CBDCs
“There will never be a CBDC while I’m president of the United States.”
Another key campaign message was Donald Trump’s stance on CBDCs, which he has called very dangerous. His stance aligns with many in the crypto community, who view central bank digital currencies as antithetical to decentralization.
CBDCs have gained traction in countries like China, representing government-controlled currency that operates on blockchain-like technology. However, they lack the decentralization and privacy of true cryptocurrencies, with many advocates worried that CBDCs could grant governments unprecedented control over citizens’ financial transactions.
Trump’s strong opposition to CBDCs suggests he may push for legislative measures to limit or prevent them in the U.S. Although it remains to be seen how this stance will translate into policy, Trump’s perspective could see the U.S. reject government-issued digital currency altogether.
3. Pro Mining Stance
“We want all the remaining Bitcoin to be MADE IN THE USA.”
Back in June, Trump sat down at a roundtable with some of the biggest private and public American Bitcoin miners in the business, acknowledging the growing significance of Bitcoin mining within the global landscape.
For years, the USA and China have been locked in a battle for dominance of the Bitcoin mining market. The world’s two largest mining pool operations are Foundry USA (USA) and Antpool (China) respectively, with the pools controlling around 60% of Bitcoin’s total hashpower.
Under Trump’s office, American miners may find themselves operating in a more favorable environment. His commitment to supporting U.S. mining could materialize in various forms, including reduced taxes on mining operations or fewer regulatory restrictions. By promoting a robust domestic mining industry, Trump’s administration could aim to position the U.S. as the global leader in Bitcoin mining. Given the importance of mining to Bitcoin’s security and operations, this policy shift could prove pivotal.
4. Self Custody Guarantees
“We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their digital assets.”
Self-custody is a cornerstone of not just decentralized finance but crypto as a whole. It allows users to store and manage their assets independently of any centralized platform. This provides a higher level of security since users don’t have to rely on a third-party custodian. However, regulatory discussions around restricting self-custody have surfaced globally. Some governments argue that decentralized storage poses risks related to security and accountability.
Trump’s firm support for self-custody could entail safeguards within U.S. regulations to protect this right. His stance reassures crypto advocates that individuals will retain control over their assets, free from potential regulatory interference.
5. Free Ross Ulbricht
“And if you vote for me, on Day One, I will commute the sentence of Ross Ulbricht.”
Ulbricht is the mastermind behind the Silk Road, the now-defunct darknet marketplace where users could buy anything, from drugs to weapons. Ulbricht is currently serving a double life sentence plus 40 years for his Silk Road involvement, but many in the crypto community, sentence excessively harsh. Prominent advocates such as Kraken CEO Jesse Powell, Litecoin creator Charlie Lee, and Bitcoin developer Amir Taaki have all expressed support for Ulbricht.
Trump’s support for his release has sparked discussions within the crypto world, with many hopeful that Ulbricht could receive a commutation or pardon. While this move wouldn’t directly impact crypto’s regulatory framework, it symbolizes Trump’s understanding of the crypto community. In addition, it will demonstrate his willingness to challenge longstanding legal precedents. If he follows through, it would serve as a powerful statement of his commitment to rectifying what he sees as justice system overreach.
6. Eliminate Tax on Bitcoin Transactions
“They have them paying tax on crypto and I don’t think that’s right. #Bitcoin is money and you have to pay capital gains tax if you use it to buy a coffee? I was talking with a friend he said it really shouldn’t be taxed and I agree.”
Trump’s plan for crypto also includes removing the capital gains tax on Bitcoin, highlighting his intentions to create a favorable tax environment for crypto businesses and investors. Furthermore, this could entail a reduction in capital gains taxes on more digital assets, not just Bitcoin. Other improvements could include simplified reporting requirements or specific tax incentives for crypto-focused startups.
By making crypto businesses financially viable within the U.S., Trump could attract domestic and international players to the American market. For crypto investors, a pro-business crypto tax policy would make the U.S. one of the most attractive markets globally. Consequently, this might fuel an influx of new capital into the industry.
Closing Thoughts
With Donald Trump back in the White House, the crypto industry faces a new era of possibilities. Trump’s pro-crypto stance is in stark contrast to the previous administration’s approach. As a result, it’s potentially paving the way for regulatory clarity and economic incentives that favor the crypto sector.
However, the true extent of his impact remains uncertain. Implementing these reforms will require navigating complex legal and political landscapes. Only time will tell whether the Trump administration will deliver on its promises. In conclusion, if it does, this could usher in a golden age for crypto in the U.S.
