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With a presidential election approaching, cryptocurrency investors are keeping their eyes peeled for what former President Donald Trump and current Vice President Kamala Harris might do with cryptocurrency regulation.
When Trump was president, he was not very supportive of cryptocurrencies. On July 11, 2019, he tweeted: “I am not a fan of Bitcoin and other cryptocurrencies, which are not money and whose value is highly volatile and based on nothing. Unregulated crypto assets can facilitate illegal behavior, including drug trafficking and other illegal activities.”
Yet just recently, Trump told a Nashville cryptocurrency audience that he intends to make the United States “the crypto capital of the planet” if elected, according to ABC News.
Experts are trying to predict how a second Trump presidency would affect cryptocurrency regulation.
A more lenient regulatory environment
Indeed, Trump appears to have completely changed course, according to Ryan Waite, a digital advocacy and policy expert and vice president of public affairs at Think Big.
“In recent months, Trump has gone from skeptic to ardent advocate of cryptocurrencies, even billing himself as the ‘crypto president’ during his campaign,” Waite said.
He explained that Trump’s agenda includes ambitious proposals such as establishing a U.S. bitcoin reserve, creating a cryptocurrency advisory board and appointing crypto-friendly regulators.
“Trump has criticized the Biden administration’s regulatory approach, pledging to reverse what he calls their “anti-crypto crusade” and end what he describes as the “persecution” of the industry,” Waite said.
So if Trump wins the presidency, Waite said he expects a more lenient regulatory environment that could foster innovation in the crypto space while reducing federal oversight.
Currently, cryptocurrency regulation is still in its infancy, although governments around the world are all considering what type of regulation to put in place, especially after recent bank failures were found to be at least partially linked to cryptocurrency activity. Although two bills have been introduced in the U.S. Congress—the Financial Innovation and Technology (FIT) for the 21st Century Act and the Blockchain Regulatory Certainty Act—they have made no progress, according to the World Economic Forum.
Waite added that while the easing of regulations could be beneficial for innovation, “this shift also brings uncertainties, including how these policies might interact with existing financial regulations and the broader global banking and crypto market.”
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An effort to make the United States a leader in cryptography
According to Blake Morgan, managing partner of Mineral Vault, a cryptocurrency tokenization company, if Trump were to win the presidency, it is likely that he would not only be supportive of the cryptocurrency industry, but (according to his statements) push for the United States to be “a leader in cryptocurrency.” He noted that Trump has offered much-needed support and easier regulation for the cryptocurrency industry.
“(Trump) has criticized and highlighted the current administration’s tough approaches. Thus, he has promised to replace key regulatory figures, such as SEC Chairman Gary Gensler, after he takes office.”
Overall, Morgan expects Trump’s presidency to lead to more industry-friendly policies. “He should create a national strategy for bitcoin that will clearly oppose central bank digital currencies.”
JD Vance could be the driver
Morgan said many analysts believe the crypto policies suggested by Donald Trump could actually be led by his running mate, JD Vance, who is openly pro-crypto and has also invested in cryptocurrencies.
“Overall, Trump’s recent actions indicate acceptance of bitcoin donations and promotion of NFTs, making him a big supporter of cryptocurrencies.”
Political support for industry is divided
Even though the cryptocurrency industry also appears to be leaning toward Trump in its support, one of the leading pro-cryptocurrency political action committees (PACs), Fairshake PAC and its affiliated super PACs, have actually pledged millions of dollars to support Democratic Senate candidates in crucial races in Michigan and Arizona, as reported by NBC News. This raises the question of whether the cryptocurrency industry as a whole truly believes that Trump has its best interests at heart.
Overall, Harris has yet to outline a strategy for regulating cryptocurrencies, so people assume she will take a similar approach to President Joe Biden, who favors regulating the industry.
For now, cryptocurrency proponents will have to wait and see how the November election plays out.
Editor’s Note on Election Coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and provide balanced reporting on politically-oriented financial topics. You can find more coverage of this topic at GOBankingRates.com.
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