The Crypto Community's Frustration with President Biden's Approach to Digital Assets

The crypto community is known for its diverse range of political beliefs. However, even the most ardent Democrats within this community are growing increasingly disillusioned with President Joe Biden's handling of digital assets.

In light of this sentiment, some crypto enthusiasts have begun to turn their attention to the potential for a second Trump administration. However, a closer examination of former President Donald Trump's tenure may cast doubt on these hopes.

Throughout his campaign to secure the Republican nomination, the leading candidate from the GOP has hardly mentioned crypto, except for one noteworthy promise made to voters in New Hampshire. He asserted that, if elected, he would "never allow the creation of a central bank digital currency," arguing that it would grant the federal government "absolute control over your money."

The concept of a central bank digital currency, which essentially serves as a digital form of the paper Federal Reserve notes commonly found in people's wallets, is a divisive topic within the crypto community. Some view it as a potential threat to private stablecoins such as Tether or USDC.

It is worth noting that Trump's own Commodity Futures Trading Commission chair, Christopher Giancarlo, who gained industry praise back in 2018 for approving a bitcoin-futures product, holds divergent views. Giancarlo is a staunch advocate for the introduction of a Fed-issued digital currency and currently serves as the chair of the nonprofit Digital Dollar Project, actively working towards this goal.

Contrary to Trump's assertions, Giancarlo has argued that a digital dollar could be designed with "individual economic privacy rights" as an integral aspect. In addition, he believes that such a currency would increase accessibility to bitcoin and other virtual currencies for Americans.

When examining Trump's past statements on crypto, it becomes clear that his perspective may not bode well for the sector in a potential second term. In 2021, he referred to bitcoin as a "scam" in an interview with Fox Business, expressing his dissatisfaction with its status as a competing currency to the US dollar. Similarly, in 2019, amidst the controversy surrounding Facebook's Libra cryptocurrency project, Trump dismissed the value of cryptocurrencies, claiming they are "based on thin air."

While some crypto enthusiasts seeking alternative leadership may find comfort in Trump's stance against central bank digital currencies, his overall remarks and criticisms of crypto raise skepticism about the benefits that a potential second term might bring for the industry.

The Future of Crypto Under a Second Trump Administration

In recent years, the crypto industry has faced significant challenges due to tough regulations and legal battles. Former Treasury Secretary Steve Mnuchin and former SEC Chair Jay Clayton, in particular, received widespread criticism for their actions. Mnuchin's efforts to combat illicit financial transactions with strict regulations on self-hosted wallets and Clayton's campaign against initial coin offerings and involvement in a controversial lawsuit against Ripple XRPUSD were highly controversial.

However, some lawmakers in support of cryptocurrency, such as Rep. Tom Emmer of Minnesota and Sen. Bill Hagerty of Tennessee, both Republicans, believe that a second Trump administration would usher in a more favorable environment for the industry. While they offer no concrete evidence for their claims, they argue that the current political landscape suggests a partisan divide on crypto regulation. Opposition to crypto-friendly legislation has predominantly come from the Democratic White House and Senate.

The potential for a Trump victory also raises the possibility of Republicans gaining control of the House and Senate, which would increase the likelihood of passing crypto-friendly legislation. However, it is crucial to note that a second Trump administration's impact on the industry will heavily depend on his choice of SEC chair.

Crypto enthusiasts are hopeful that Trump would select someone like current SEC Commissioner Hester Peirce, who is known for her criticism of Gary Gensler's strict approach to crypto regulation. Nonetheless, considering Trump's historical skepticism towards the industry and the various interest groups vying for influence, it remains uncertain if this hope will materialize when selecting the SEC chair in 2025.