Donald Trump is trying to be the crypto community’s best friend. In 2019, he called Bitcoin a scam and said crypto would fuel crimes.
Fast forward to this election year, and he’s singing a different tune, calling himself the “crypto president.”
Why the change? Well, it’s simple. He wants votes and money. His campaign has already pulled in about $25 million from donations in the industry.
But the big question is, can he actually remain pro-crypto if he takes back the Oval? Spoiler alert. Probably not.
At the Bitcoin conference in Nashville, he promised to make the U.S. the “crypto capital of the planet.”
He’s talking about creating a Strategic National Bitcoin Stockpile. This means holding onto all the Bitcoin the U.S. government has, which is worth over $12 billion at press time.
He also wants to set up a Crypto Advisory Council, packed with industry insiders to create new rules.
Oh, and he’s completely against Central Bank Digital Currencies (CBDCs), calling them a “dangerous threat to freedom.”
He’s gonna do everything in his power to stop the Federal Reserve from creating one. It’s all designed to get the crypto community on his side and to fight what he calls “Biden’s anti-crypto crusade.”
Promises vs. reality
Trump’s promises sound great on paper, but they’re not realistic. The Strategic National Bitcoin Stockpile idea, specifically, is crazy.
Bitcoin is volatile. Using it as a core part of U.S. monetary policy is like playing with fire. The plan to create a Crypto Advisory Council sounds nice, but it’s not clear how that will work.
Who will be on this council? How much influence will they have? Knowing Trump, it’s likely to be filled with people who support his business ventures.
Trump has a new business, World Liberty Financial. It’s allegedly a crypto trading and lending platform. His family owns 70% of it. This is a huge conflict of interest.
How can he be both a president and a businessman without mixing the two? Jordan Libowitz from Citizens for Responsibility and Ethics in Washington says it’s a recipe for disaster.
The platform claims it’ll leave behind “slow and outdated big banks.” But details are scarce. Charles Hoskinson, the guy who co-founded Ethereum and Cardano, is not happy. He says:
“Trump is launching a DeFi application, and that’s scary to me as an industry.”
Why? Because anything Trump touches becomes a political circus. Charles is worried that the Democrats will weaponize U.S. institutions to slow down Trump’s crypto plans.
He thinks there could be DOJ investigations or SEC lawsuits. And he’s not wrong. If this happens, it’ll create a mess for the entire industry.
The economic impact
If Trump’s crypto policies take off, they could affect the economy. He says he’ll push the Federal Reserve to lower interest rates by an insanely big margin.
This could be good for crypto investments but might lead to inflation. The more money people have to spend, the higher the prices go. That’s basic economics.
Then there’s his support for decentralized finance (DeFi). Trump thinks DeFi could break traditional banks’ stranglehold on finance. But this is a big if. DeFi is still a Wild West.
There’s a lot of scams and hacks happening every other day. How does Trump plan to regulate it without killing its innovative spirit? He hasn’t said.
Trump also wants to subsidize Bitcoin mining. He thinks this will boost energy production. It sounds good, but it’s not that simple. Bitcoin mining uses a lot of electricity.
This could strain power grids and hike up energy prices. Not to mention the environmental impact. Crypto mining isn’t exactly green.
CBDCs are another hot topic. They could centralize power in the hands of the government. They could destabilize the financial system.
If people start moving their money from banks to CBDCs, banks could run into liquidity issues. It’s a domino effect that could trigger a financial crisis.
In times of economic stress, people might rush to convert their bank deposits into CBDCs, making things even worse.
Privacy is another issue. CBDCs would likely require tracking and identification. This could lead to government surveillance.
People don’t want the state looking over their shoulder every time they spend money. Cybersecurity is also a concern. A breach in the CBDC system could be catastrophic. It’s a big, juicy target for hackers.
Voter strategy
Trump’s love affair with crypto is also about votes. The crypto crowd skews young and male. They’re often anti-establishment and tired of government meddling in finance.
By jumping on the crypto train, Trump is hoping to win over these disillusioned voters. But he’s also alienating traditional Republicans who are wary of crypto’s volatility and security issues.
Charles isn’t convinced Trump can deliver on his promises. He says Trump’s staff turnover is too high. And doesn’t think Kamala Harris would be any better.
He calls her a continuation of Biden’s disastrous policies. So, it’s a lose-lose situation for the crypto industry.
Trump has support from top people in crypto like Marc Andreessen, Ben Horowitz, and the Winklevoss twins.
But he’s not the only one. Mark Cuban and Reid Hoffman are backing Kamala. The crypto community is divided.
Charles says, “I don’t see that level of quality and sophistication in the discourse” from either candidate.
He thinks the U.S. could gain “five to ten trillion worth of crypto stuff” over the next decade if the government would just get its act together.
He’s more optimistic about Congress. He said he’s had good talks with Republicans like Tim Scott and Cynthia Lummis, and even Democrat Ron Wyden.
Charles warns that Trump is making crypto a partisan issue. That’s bad news. Crypto has always been bipartisan. Turning it into a political football could set the industry back years.
If Trump goes down, he could take the whole industry with him.
Source: https://www.cryptopolitan.com/impossible-for-trump-to-remain-pro-crypto/