When then Presidential Candidate Donald J. Trump pivoted in 2024 from crypto-skeptic to arch crypto-advocate, he successfully won over an industry of potential voters that, for the most part, hadn’t previously been active in politics or, in many cases, even voted at all. With an estimated 50 million crypto users in the U.S., the latent potential of this single-issue voting block was significant. Trump became a David vs. Goliath champion of a nascent digital assets industry that the Biden administration had sought to kill, and indeed managed to force offshore or into hiding. Crypto’s first time voters came out in droves to support Trump.
Without doubt, Trump recognized the power of the crypto vote, and moved to capture it. But he also came to understand the power of the “blockchain and related digital asset technologies to transform broken financial, monetary, and political systems through greater transparency, inclusion, and fairness, not to mention inflation resistance.”
For non-crypto voters, it was hard to understand what all the fuss was about. To most Americans, crypto seems like an alien concept, with a foreign vocabulary, incomprehensible technology; a wild-west of gambling dens and lawlessness. Yet crypto matters for American economic success and prosperity in the competitive and borderless world of technology. If the U.S. abandons its technology leadership position, gained through years of investment, foresight and benign regulatory environments, such as witnessed in the last wave of major innovation (the 1990s internet boom), the chilling effects will extend well-beyond digital assets.
The debate over crypto matters because it gets at the heart of American innovation, entrepreneurship, and freedom of expression. And for many, crypto represents not only an inflation hedge, but a potential escape from the deficit-debt-inflation doom loop now spiraling out of control and eviscerating Americans’ purchasing power.
For four years, the U.S. government under the Biden administration persecuted and prosecuted cryptocurrency industry participants, companies, and investors alike. Through the weaponization of the U.S. regulatory system, especially including the Securities and Exchange Commission’s (SEC) practice of “regulation by enforcement,” under Chair Gary Gensler, the U.S. government’s administrative state went well beyond their legal authority. If entrepreneurs are afraid to start businesses for fear Big Brother will shut them down and arrest time, they will leave and invest elsewhere. The U.S. can lead in the most disruptive emerging technologies of the century, including in both digital assets and artificial intelligence (AI). If the U.S. doesn’t lead here, other countries, including China, Russia, and Iran, will.
Trump must develop and implement a policy framework for digital assets that constructively embraces innovation and entrepreneurship, while providing adequate consumer protections. This is vitally important for U.S. competitiveness and economic growth. In the 1990s, the United States managed to implement policies that resulted in the U.S. becoming the leader in the newly-developed technologies of the era that generated the vast majority of productivity improvements and national wealth creation in the first two decades of the twenty-first century. We can do this again with AI, quantum computing, blockchain technologies, modern nuclear, and many other technologies. But we need the policy framework to support, not suppress, innovation, entrepreneurship, and industry.
There are many steps that can be taken to get crypto regulation right. Trump, and his newly appointed crypto-czar David Sacks (along with his executive director Bo Hines), will likely (and among other things) move to:
- Replace the SEC’s leadership with a pro-crypto Chair (Accomplished with Gary Gensler’s resignation and with Trump’s appointment of Paul Atkins)
- End the SEC’s witch-hunt policy of regulation by enforcement, dropping the hundreds of cases and investigations against the industry
- Stop trying to force twenty-first century crypto regulation into 1930s era financial legislation and administrative frameworks. New wine needs new wineskins
- Seek to end the Treasury and Federal Reserve’s prohibitions on provision of banking services to crypto-related entities
- Establish stablecoin legislative framework including supporting the Financial Innovation and Technology for the 21st Century Act (FIT21)
- Override Biden’s veto of an attempted bipartisan block on SEC staff accounting bulletin (SAB) 121
- Support a legislative policy framework for cryptocurrencies that clarifies their status as a security or commodity or neither, depending on the particular circumstances of each token and protocol
- Kill the proposed IRS tax rule requiring crypto exchanges and De-Fi protocols to collect user trading information
- Establish a Bitcoin U.S. strategic reserve
- Support policies for Bitcoin and other proof-of-work miners
- Support legislation to pass a federal law and related policies on issuance and use of CBDCs (central bank issued digital currencies) including necessary privacy and other protections for consumers
- Support efforts to move real-world asset records, including governmental, to the blockchain, providing greater transparency, efficiency, and immutability, and greater accountability for government spending
Trump has the opportunity to Make Crypto Great Again here in America.