3 weeks ago
4
Over the last few years, former President Donald Trump has transformed himself from a vocal critic of the digital asset space into the crypto-advocate-in-chief of the United States. Now, as he pushes for a return to office, Trump’s bullish rhetoric on the industry is exciting those within it, hoping the U.S. can become a haven of free-market, anti-interventionist digital asset policy.
Trump characteristically inconsistent journey to reposition himself as the ‘crypto’ presidential candidate began with him publicly denouncing digital assets as a “scam.”
“I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” wrote Trump, in a July 2019 post on X (formerly Twitter).
At the time, he was sitting behind the desk he now seeks to reclaim, from where he warned about the risks of “unregulated crypto assets,” saying they could facilitate “unlawful behavior, including drug trade and other illegal activity.”
After losing to incumbent President Joe Biden in 2020, Trump maintained his unfavorable take on digital assets, calling Bitcoin a “scam” in a July 2021 appearance on Fox Business.
“Bitcoin, it just seems like a scam […] I don’t like it because it is another currency competing against the dollar,” said Trump. “Essentially, it is a currency competing against the dollar. I want the dollar to be the currency of the world, that’s what I’ve always said.”
Fast forward to October 15, 2024, and he’s declaring that “Crypto is the future,” calling it an “incredible technology” and reiterating his intention to help the U.S. become a global leader in digital assets.
Why the change of heart? Is it down to a fundamental reassessment of the potential value, both economic and societal, of the digital asset and blockchain space? Is it in the hopes his own family’s stuttering crypto-project will have a change of fortunes? Or is it, with one eye on a second term, in the hopes of securing campaign financing and a useful block of single-issue voters hungry for a powerful political ally?
Whatever the motivation, Trump’s stark U-turn on digital assets began just over a year after calling Bitcoin a scam when the former president debuted a non-fungible token (NFT) collection in late 2022. Not uncoincidentally, the NFTs were launched shortly after Trump announced his 2024 presidential campaign bid.
After raising $8.9 million on NFTs, Trump continued to demonstrate his new found support for digital assets, reportedly disclosing his investments of between $250,000 and $500,000 of digital assets in August 2023.
With election time creeping ever closer, Trump further threw his lot in with ‘crypto’ by voicing his strong support for Bitcoin mining, in June. He called on the government to encourage “all the remaining Bitcoin” to be mined in the U.S. while claiming this would help the country become “energy dominant.”
A month later, crypto bros rejoiced when Trump named Senator J.D. Vance (R-OH)—a man with a pro-crypto history, over $100,000 in BTC holdings on his financial disclosure forms, and a known dislike of controversial Securities and Exchange Commission (SEC) Chair Gary Gensler—as his vice-presidential running mate.
By August, the 180-degree turn was complete, as Trump promised to unveil a plan to turn the U.S. into the “crypto capital of the planet.”
And if this wasn’t enough to persuade the industry that he’s all-in, on August 6, Trump’s son, Eric, tweeted that he has “truly fallen in love with Crypto / DeFi. Stay tuned for a big announcement.” The following day, Donald Jr. tweeted that “we’re about to shake up the crypto world with…something HUGE. Decentralized finance is the future—don’t get left behind.”
Unfortunately, the ill-defined project, known as ‘World Liberty Finance’—supposedly some form of digital asset borrowing/lending platform—had a shambolic pre-launch and an equally embarrassing first token sale in September.
In real terms, though, what does Trump’s burgeoning love of digital assets mean for the sector should he get elected in November? And what specific and undoubtedly unbreakable promises has the 34-time convicted felon made?
Possible policy
If anything can be inferred from the varied references to digital assets in Trump’s rantings and ravings, both spoken and written, one of his first priorities if elected would be to put the kibosh on a U.S. Dollar central bank digital currency (CBDC)—a digital currency version of the dollar that would be issued and controlled by the Federal Reserve, the central banking system of the U.S.
Trump has fairly consistently—by his standards—made it clear that he is against any form of CBDC.
“Tonight, I’m also making another promise to protect Americans from government tyranny. As your president, I will never allow the creation of a central bank digital currency,” said Trump, during a January 17 speech in Portsmouth, North Hampshire.
“Such a currency would give the federal government, our government, the absolute control over your money. They could take your money, and you wouldn’t even know it was gone. This would be a dangerous threat to freedom and I will stop it from coming to America.”
Putting aside the hilarious irony of Donald “make America great again” Trump claiming to be the great protector against “government tyranny,” his comments with regards to CBDCs appear to have been said in earnest and were backed up in July when he told the BTC 2024 conference in Nashville:
“I will immediately order the Treasury Department and other federal agencies to cease and desist all steps necessary because, you know, there’s a thing going on in your industry. They want to move the creation of a central bank digital currency. It’s over. Forget it. There will never be a CBDC while I’m president of the United States. And I will always defend the right to self-custody.”
Trump is not alone in this crusade, as legislative maneuvers are underway. In May, the House passed Rep. Tom Emmer’s (R-MN) ‘CBDC Anti-Surveillance State Act,’ which would block the creation of a government-issued, government-controlled CBDC. The bill still needs to be ratified by the Senate, which would likely not happen until early next year, thanks to November’s election and the following lame duck Congress. After that, it would go to the president for approval.
If that president was Trump, it would presumably be waved through with gusto.
Another issue Trump has touched on several times is mining. In July, the Republican National Committee published its official party platform, noting that Trump will “defend the right to mine Bitcoin.”
In the “Crypto” section of the document, it also promised to “ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”
Trump further detailed a set of crypto-friendly policies at the BTC 2024 conference in Nashville. Outside of claims that BTC’s price would soar under his administration, highlights included creating a government stockpile of BTC, on which Trump noted that his administration would “keep 100 percent of all the Bitcoin the U.S. government currently holds or acquires into the future,” adding that the digital asset would act as the “core of the strategic national Bitcoin stockpile.”
As of July 29, 2024, the U.S. government holds 213,297 BTC, worth roughly $14.82 billion, largely seized from criminal investigations.
Another key promise to come out of Nashville was the creation of a digital asset advisory council, called the “Bitcoin and crypto presidential advisory council,” which, according to Trump, would have rules “written by people who love your industry, not hate your industry.”
It is, however, one thing to lay out such plans, it’s another entirely to actually follow through on them, given the chance.
The art of the U-turn
Unfortunately for the optimistic crypto-crowd hoping for a Trump win, the blustering billionaire chancer-in-chief has a track record of not delivering on key campaign promises and rallying cries.
Just for reference, here’s a list of some of the promises the former president broke once he found himself in office the first time around:
- Repealing Obamacare – One of Trump’s key rallying pledges, but Republicans were unable to pass a repeal or reform bill during his term;
- Building a border wall and making Mexico pay for it – By the end of his term, only 194 miles of wall system had been built, and Mexico did not pay;
- Eliminating U.S. debt – By the end of 2019, the federal debt was at $22.7 trillion, more than three trillion more than immediately before Trump took office;
- Reviving U.S. manufacturing – Between January 2017 and the end of 2020, there was a net decrease in manufacturing employment;
- Four-percent Gross Domestic Product (GDP) growth – Average GDP growth never got beyond 2.5% during Trump term;
- Bringing back coal – A November 2020 report from S&P Global Market Intelligence showed a decrease in coal jobs since the start of the Trump administration;
- Ditching North Atlantic Treaty Organization (NATO) – After elected he hosted NATO’s secretary general at the White House, in April 2018, and said the organization was “no longer obsolete.”
- Prosecuting Hillary Clinton – When he took office his “lock her up” rallying cries quickly changed, even saying at one point that the country owes her “a debt of gratitude.”
Of course, to be fair to Trump, he certainly wouldn’t be the first politician to break, conveniently forget, or fail to achieve previously made promises once in office. This characteristic feature of modern governance is one of the reasons public trust in politicians is at an all-time low; market research company Ipsos recently published its Global Trustworthiness Index, which saw politicians place last, just behind advertising executives.
Yet, it does demonstrate that the former president’s apparent enthusiasm for a policy or cause can be fleeting. Once sat in the Oval Office again, goal achieved, his motivation to throw his considerable weight behind the digital asset industry may be less pressing than his desire to cut taxes for the richest 5% or to play golf, especially with his own ‘crypto’ project effectively dead in the water already.
In other words, those crypto-bros greedily drinking up Trump’s wishful waffle of a U.S. “crypto capital” might also do well to remember that this is the guy who wrote, in his 1987 book The Art of the Deal, “a little hyperbole never hurts.”
Watch: Breaking down solutions to blockchain regulation hurdles
English (US) · 