As a seasoned economist with a deep understanding of financial systems, I find Trump’s stance on central bank digital currencies (CBDC) particularly intriguing. His opposition to increased governmental control over digital assets echoes my own concerns about preserving individual financial freedom.
In the course of his political career, Donald Trump, a former U.S. president and potential 2024 Republican presidential nominee, has frequently failed to keep his campaign pledges.
This year, Trump has shown interest in cryptocurrency as part of an effort to attract voters who are into digital currencies. On July 7th, the Republican Party presented a preliminary version of their political platform, and cryptocurrency was highlighted under their innovation section, alongside initiatives for artificial intelligence advancement and space exploration. The document outlined the primary objective of a Trump administration regarding cryptocurrency:
“Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency. We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”
The political platform was solidified in response to Trump’s remarks at the 2024 Bitcoin Conference in Nashville, where he declared, “I promise to the Bitcoin community that the moment I assume office, the anti-crypto campaign led by Joe Biden and Kamala Harris will cease,” emphasizing his commitment that “it will terminate. It will be completed.
But will Trump really follow through on these bold promises?
Bitcoin “made in the USA”
On June 12th, Trump expressed on Truth Social his desire for “the remaining Bitcoin to be minted within the United States,” asserting that such action would boost America’s position as an “energy superpower.” It is worth noting that about 90% of the total 21-million supply of Bitcoin has already been mined.
As a crypto investor, I’ve been pondering about the potential impact of Trump’s plans to strengthen the U.S. mining industry and localize Bitcoin production. However, it seems that such a move could encounter substantial logistical and regulatory hurdles due to the inherently decentralized essence of Bitcoin mining.
As a data analyst, I’d rephrase that statement as follows: According to Ben Gagnon, CEO of Bitfarms, it is indeed feasible and advantageous for the United States to strive towards becoming the leading nation in Bitcoin mining.
Gagnon stated that America could become the top destination worldwide for Bitcoin mining if Trump simplifies regulations, boosts support, and enhances investments in energy and power grid infrastructure.
It’s worth mentioning that Gagnon acknowledged that it isn’t feasible for a single nation to extract all Bitcoins because of its distributed architecture.
“It’s not possible, nor desirable, that 100% of Bitcoin are mined in the US or in any other country.”
It’s impossible for Trump to fulfill his pledge to mine all remaining Bitcoins, as such an action contradicts the basic principles set by Bitcoin’s creator, Satoshi Nakamoto. Concentrating mining activities in a single location would undermine Bitcoin’s essential characteristic: its decentralized nature.
Crypto can solve the US’ $35 trillion national debt
The national debt refers to the overall sum of loans that the United States federal government has taken out over time, which it still owes.
Over the last century, as reported by Fiscal Data, the U.S. federal debt has significantly grown. It stood at approximately $394 billion in 1924, but by 2024, it had soared to more than $35 trillion.
Accumulating debt could become a significant threat in the future, possibly causing major long-term financial difficulties.
At a gathering centered around his digital collectibles (non-fungible tokens), Trump expressed his belief that cryptocurrency holds a promising future. He suggested that, in theory, the $35 trillion debt could potentially be settled using cryptocurrencies.
As an analyst, I can share that Ric Edelman, the founder of the Digital Assets Council of Financial Professionals’ designation program for advisors, expressed his viewpoint to CryptoMoon. He posits that cryptocurrencies could potentially offer solutions in addressing the persistent problem of the U.S. national debt.
“I have no doubt that a Bitcoin reserve could sharply reduce and even perhaps eliminate our national debt.”
Nonetheless, he acknowledged that “Trump seems just as certain about not being able to establish such a reserve fund, or if he does, his successor might abolish it.” Edelman considered Trump’s statement more of an appealing slogan during the campaign rather than a realistic scenario.
The US will create a strategic Bitcoin reserve
Beyond establishing the U.S. as a global frontrunner in Bitcoin mining, Trump proposes accumulating a strategic reserve of Bitcoins.
Trump’s proposal involves keeping all the Bitcoin that the U.S. has in its control, which amounts to about 100%. However, since a significant portion of these assets were obtained through legal seizures during criminal investigations, this move may face some challenges.
As an analyst, I’ve uncovered that approximately half of the government’s Bitcoin holdings stem from a substantial seizure linked to the aftermath of the Bitfinex hack. Given that these digital assets were initially owned by victims of this incident, there’s a strong legal obligation to either return these funds to Bitfinex or directly to the affected parties.
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Luckily for Trump’s proposal, Senator Cynthia Lummis presented a bill aimed at creating a strategic reserve for Bitcoin. If this bill passes, it would establish a Bitcoin fund as a means to protect against the country’s debt. The aim is to purchase approximately 1 million Bitcoins over a period of five years, with plans to hold these for at least two decades.
Supported by Congress, Trump’s proposal for a Bitcoin reserve could potentially become a reality. However, it’s crucial that more legislators understand and recognize the potential benefits of Bitcoin for this to happen.
Fire Gary Gensler “on day one”
A significant number of individuals within the cryptocurrency sector often express frustration towards the U.S. Securities and Exchange Commission, claiming that they tend to enforce regulations instead of clearly defining them in advance.
With Chair Gary Gensler at the helm, the commission has initiated several investigations into prominent cryptocurrency companies, accused of dealing in unregistered securities.
As a researcher, I’ve noticed that the United States cryptocurrency industry is actively advocating for definitive regulatory guidelines, asserting that the current Securities and Exchange Commission (SEC) guidance is unclear. From my perspective, this ambiguity in rules seems to be causing uncertainty, which in turn discourages market participation and hinders growth within the domestic crypto sector.
One of Trump’s most crystal clear promises is that he will fire Gensler “on day one.”
Trump proposes that fresh leadership could foster a more welcoming regulatory climate for cryptocurrencies, thereby boosting the U.S. crypto sector. Yet, it’s worth noting that Trump does not have the authority to dismiss Gensler, as he is the head of the Securities and Exchange Commission (SEC), an independent agency.
It might not be as simple as Trump believes to dismiss the SEC chair. Although he wouldn’t need Senate confirmation to remove Gensler, doing so abruptly could establish a risky precedent and invite political criticism for getting rid of such an influential regulator in such a casual manner.
The President is required to remove the SEC chairman due to specific reasons such as negligence, inefficiency, or misconduct. This dismissal needs justification based on these grounds. Moreover, determining the cause, undergoing legal scrutiny, and managing the transition process might take more than a year’s time.
So, Trump will likely have to live with Gensler for a while before someone new steps in.
Stop the development of a US CBDC
Donald Trump has vowed to prevent the U.S. Treasury from developing a digital version of national currency (Central Bank Digital Currency or CBDC), indicating his disapproval of more government oversight in the management of digital assets.
At the Bitcoin Conference held in Nashville, Trump stated that under his presidency, there would be no Central Bank Digital Currency (CBDC), expressing concerns about the potential danger it poses to financial privacy.
Trump isn’t the only one expressing skepticism about Central Bank Digital Currencies (CBDCs). In fact, several Republican political figures have spoken out against them. Notably, Governor Ron DeSantis of Florida signed a bill that limits their usage within the state.
Representative Tom Emmer has proposed the CBDC Privacy Protection Act, which prevents the Federal Reserve from launching a Central Bank Digital Currency (CBDC) unless authorized by Congress. The legislation is currently being reviewed by a committee.
Set Silk Road operator Ross Ulbricht free
At the Libertarian National Convention, Trump stated that, on his first day in office, he intends to grant clemency to Ross Ulbricht, the creator of the darknet marketplace known as Silk Road, a platform facilitating the illegal sale of drugs, weapons, and other illicit goods.
Ulbricht’s sentence, which includes two life sentences along with an additional 40 years without the possibility of parole, is extremely contentious given that it was handed down for non-violent offenses.
People who are critiquing this case contend that the penalty given is too severe relative to sentences for similar misdeeds. They bring up matters such as potential judicial overstepping, establishing precedents for crimes in the digital era, and worries about how the criminal justice system manages first-time, nonviolent offenders.
As a crypto investor, I’m confidently stating that just like someone serving a sentence, I believe I’ve already paid my due in the digital investment world. I’ve clocked in 11 years of experience, and it seems enough for now.
As a U.S. President possesses the authority to shorten sentences or pardon individuals convicted of federal crimes, Trump might swiftly fulfill his pledge in this regard.
A commute wouldn’t absolve Ulbricht from his conviction but would allow his early release.
Create a crypto advisory council for precise crypto policies
Cryptocurrency is a vast and intricate subject, often challenging for regulatory bodies. If re-elected, Trump suggested establishing a Presidential Advisory Committee to establish a robust legal framework for cryptocurrencies.
In the future, the ones writing the rules will be those with a passion for your field, rather than those critical of it,” was said by Trump.
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Trump announced that the role of the cryptocurrency advisory group is to create clear regulatory guidelines aimed at helping the entire sector. He believes they can accomplish this within a span of 100 days.
In simpler terms, the well-known but anonymous cryptocurrency expert, often referred to as Crypto Rand, stated in a conversation with CryptoMoon that this particular aspect could be one of the most crucial, given his belief that Congress and the SEC have consistently shown a lack of comprehension about the inner workings and unique characteristics of the crypto market.
Crypto self-custody as a right
Trump has pledged to establish a legal right for cryptocurrency users to hold their own digital assets, essentially turning the phrase “Not your keys, not your coins” into a provision in U.S. federal regulations.
Trump’s dedication towards self-custody of cryptocurrencies is strengthened by the legislation proposed by Republican Senator Ted Budd. He presented the Keep Your Coins Act in the Senate on November 7, 2023, which intends to prevent any limitations on American citizens’ capacity to conduct transactions using personally-managed crypto wallets.
The proposed legislation by the Republican lawmaker contrasts with a plan introduced by Democratic Senator Elizabeth Warren in 2022. Known as the Digital Asset Anti-Money Laundering Act, this bill aims to enforce identification and monitoring of users who hold self-managed digital wallets. This obligation would extend to crypto wallet service providers, miners, validators, and other relevant parties within the crypto market.
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2024-11-02 22:03