The crypto community is politically diverse, but even the staunchest Democrats within it are growing tired of President Joe Biden’s approach to digital assets.
This state of affairs has led some crypto boosters to put their faith in a potential second Trump administration, but a careful look at former President Donald Trump’s term in office could cast doubt on these hopes.
The GOP front-runner has made little mention of crypto in his campaign to capture the Republican nomination, other than to promise voters in New Hampshire on Wednesday that he would “never allow the creation of a central bank digital currency,” which he said would give the federal government “absolute control over your money.”
Central bank digital currency, or a digital form of the paper Federal Reserve notes Americans keep in their wallets, is a divisive topic among the crypto community, with some seeing it as a tool to crowd out private stablecoins like Tether or USDC.
But Trump’s own Commodity Futures Trading Commission chair, Christopher Giancarlo — who won the plaudits of the industry back in 2018 when he greenlighted a bitcoin-futures product — is a major supporter of a Fed-issued digital currency and currently works toward that goal as chair of the nonprofit Digital Dollar Project.
Giancarlo told MarketWatch in 2021 that contrary to Trump’s claims, a digital dollar could be designed with “individual economic privacy rights” as an inherent feature, and that it would make bitcoin
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and other virtual currencies more accessible for Americans.
Meanwhile, Trump’s past statements on crypto are anything but bullish for what a potential second term could portend for the sector.
“Bitcoin, it just seems like a scam,” Trump told Fox Business in 2021. “I don’t like it because it’s another currency competing against the dollar.”
In 2019, amid controversy over Facebook’s Libra cryptocurrency project, Trump lamented that the value of cryptocurrencies is “based on thin air.”
His appointees, including former Treasury Secretary Steve Mnuchin and former SEC Chair Jay Clayton, were also roundly criticized by the crypto industry — Mnuchin for his efforts to combat illicit financial transactions with tough regulations on self-hosted wallets, and Clayton for his campaign against initial coin offerings and for signing off on a controversial lawsuit against Ripple
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.
Today, crypto-friendly lawmakers like Rep. Tom Emmer of Minnesota and Sen. Bill Hagerty of Tennessee, both Republicans, are arguing that a second Trump administration would abandon these approaches and be “much friendlier” to crypto, but they offered no concrete evidence for their convictions in recent interviews with Politico.
“Crypto lobbyists would suggest otherwise, the but the politics of crypto regulation are becoming increasingly partisan,” Christopher Niebuhr, an analyst with Beacon Policy Advisors, wrote in a recent note to clients, noting that opposition to crypto-friendly legislation in recent years has come largely from the Democratic White House and Senate.
He added that a Trump victory would likely mean Republicans had a strong enough Election Day performance to also capture the House and Senate, a scenario that would make crypto-friendly legislation more likely, though still an uphill battle.
In that sense, it may be rational for single-issue crypto voters to root for a Trump victory, although Niebuhr cautions that “whether a second Trump administration is a boon for the industry will rest with the former president’s choice of SEC chair.”
The digital-asset industry hopes that Trump would choose someone like current SEC Commissioner Hester Peirce, known for her criticism of Gensler’s tough stance on crypto. But that may be wishful thinking given Trump’s history of skepticism toward the industry and the many other important interest groups that will want a say in who will run the SEC in 2025.
