Although US President Donald Trump has previously tweeted his negative views on bitcoin and other digital currencies, Trump’s mentality has not narrowed the legal framework for digital currencies during his presidency. The US presidential election will be held next week and there is close competition between Trump and Biden. Decrypt website at an essayHas examined the impact of the choice of either of these two individuals on the digital currency industry. A few days ago, you read an article about the impact of Biden’s choice on digital currencies. We will now look at the impact of Trump’s re-election on Bitcoin and other digital currencies.
Donald J. Trump, the 45th President of the United States, has used Twitter to express his views on many issues during his nearly four years in office, and Bitcoin has been no exception.
Trump’s stance on bitcoin is a soft one for him, who during his four years in office took a hard line against many issues. In July 2019, Trump tweeted: “I am not a fan of Bitcoin.” That could set the stage for digital currency regulation and the monitoring of crypto assets in the United States.
But in practice the situation was different. Although Trump himself may have a personal hatred for bitcoin and other digital currencies, his administration has taken a very realistic stance on digital currencies.
However, given the state of digital currencies in the United States over the past year and the available evidence, it is possible to guess what the conditions will be for digital currencies if Donald Trump is re-elected President of the United States.
Trump’s tweet about digital currencies happened only once. The tweet was most likely influenced by Facebook’s decision to launch the Libra project. The Libra digital currency, a backed-up digital currency, faced strong global backlash from lawmakers at the time.
The text of Trump’s tweet was as follows:
I’m not a fan of bitcoin and other digital currencies. These are not money and their value is very volatile [این ارزش] It is not based on anything. Unlawful digital assets can facilitate illegal behavior, including drug trafficking and other illegal activities. Likewise, Facebook’s Libra’s “virtual currency” will have a low status and little trust. If Facebook and other companies want to become banks, they must look for a new banking privilege and be subject to all banking regulations, like all other banks, both domestic and international.
He added in another tweet:
We have only one real currency in the United States, and that currency is stronger than ever, both reliable and trustworthy. This currency is by far the dominant currency everywhere in the world and will always remain so. Its name is the US Dollar!
Trump’s nationalist rhetoric is not new and surprising given his position and other rhetoric. These remarks are reminiscent of the words of Larry Kudlow, the Trump administration’s chief economic adviser. In 2018, before joining the Trump administration, he called for policies called “King Dollar” that would strengthen the position and value of the dollar. However, it is true that some early and staunch critics of digital currencies have changed their minds over time.
Kadlow wrote in this regard:
Bitcoin is not real money and is not a reliable tool for exchanging and storing value. None of the central bank regulations, network operations, or even centralized issuance make sense. Also, due to severe price fluctuations, Bitcoin can never be a reliable payment system.
Increasing monitoring of digital currencies under Trump
It is a fact that since the first term of Trump’s presidency, the focus on digital currencies by government agencies has increased. These include increasing the oversight of the Internal Revenue Service (IRS) over the tax returns of taxpayers who hold digital currencies. Measures by the US Securities and Exchange Commission (SEC) to counter illegal securities in the form of initial coin offerings (ICOs) were also observed, and several other government agencies increased their digital currency tracking tools.
However, digital currencies have grown dramatically during the Trump presidency. The market value of digital currencies has risen from $ 17 billion when he took office in 2017 to more than $ 400 billion. Digital currencies have been used more widely, both legally and illegally. As a result, it makes sense for lawmakers and government agencies to pay more attention to them from one place to another.
In many cases, legislators and government agencies are using this technology and its applications instead of explicitly and in any way suppressing bitcoin or digital currency. Trump also told US Treasury Secretary Steven Mnuchin in May 2018 that Monitor bitcoins. The quote is from The Room Where It Happened by John Bolton, a former national security adviser to the Trump administration.
However, we have not seen any concerted efforts to legislate bitcoin in the Trump administration. This situation can be largely called a non-interventionist approach. Drew Hinkes, legal adviser to Carlton Fields, believes that this approach will continue if Trump wins the election again.
“Hinks says in this regard:
Government-run executive agencies face a lack of funding. Although the President and the Secretary of the Treasury have taken a hostile approach to digital currencies such as Bitcoin, neither has taken any serious action to ban or restrict its use. I expect this approach to continue and even be strengthened in Mr. Trump’s second term. Given the current administration’s opposition to funding executive agencies, I do not expect to see a new wave of law enforcement or any directive in this area during Trump’s second term.
However, in the last few weeks alone, there have been several guidelines on how to deal with digital currencies. Earlier this month, the US Treasury Department’s Inspector General for Taxation released a report stating that the Internal Revenue Service was not doing enough to oversee digital currency exchanges.
That same week, William Barr, the attorney general of the United States Department of Justice, released an 83-page report entitled “Digital Currency Executive Framework” for agencies under the jurisdiction. The report states:
Today, there are few technologies that are potentially more transformative and disruptive than digital currencies, but at the same time there is a lot of potential for their misuse. Indeed, despite the relatively short lifespan of digital currencies, the technology is one of the most important national security criminal threats facing the United States.
Although the report discusses the role of digital currencies in facilitating terrorism, drug trafficking, child pornography, and other illegal activities, it does not merely address negative aspects. The report of the Ministry of Justice adds:
To realize the transformative potential of digital currencies, these risks must be addressed.
However, Juan Aja Aguinaco, co-founder of Shyft Network, believes the report poses significant challenges for digital currency stakeholders. In this regard, he says:
The proposed framework of the Ministry of Justice and its statement on global cryptography contain clear messages to the digital currency industry on how they interact with this technology, regardless of jurisdiction. This framework extends the responsibility of compliance to the rules to most participants. In general, the implications for digital currencies are huge, as you will be monitored by US lawmakers wherever you have a single point of contact with US servers, user interfaces, and institutions. For other areas, especially those involved in the development of defa, stable coins, advanced evasive tokens, and in general in specific areas of Blockchain development, this framework suggests complex and potentially destructive compliance requirements.
However, some proponents of digital currencies have joined government agencies under Donald Trump. One of the most prominent is Hester Peirce, a member of the United States Securities and Exchange Commission. Pierce, known as the “mother of digital currencies,” was sworn in by Trump for the second time earlier this year as a member of the Securities and Exchange Commission.
He acknowledged that he was still trying to get his colleagues to agree on issues related to digital currencies. Pierce recently issued a statement opposing the commission’s decision against digital currency companies. In the statement, he unveiled a “safe harbor” plan to help companies survive the troubles caused by the decisions of the Securities and Exchange Commission.
Chandan Lodha, co-founder of CoinTracker, believes Trump’s proposed tax policies could benefit digital currency holders. He says:
President Trump’s tax plan is more ambiguous than Joe Biden, although he has hinted at the idea of lowering the capital gains tax rate from 20 percent to 15 percent. This 5% reduction in the tax rate will reduce the amount of tax paid by digital currency holders in the long run. On the other hand, President Trump has explicitly stated that he is not in favor of bitcoin and other digital currencies.
Of course, the impact of government stimulus packages in response to the outbreak of the coronavirus cannot be ignored. Artem Bespaloff, co-founder and CEO of Asic Jungle Mining Hardware Market, believes that stimulus packages could boost US dollar inflation and, as a result, create more demand for bitcoin. He says:
Whether Trump is elected or Joe Biden, it is very likely that we will see continued money and inflation in general. The Federal Reserve has said it wants to keep annual inflation at around 2 percent in order to balance zero interest rates. Democrats and Republicans alike have shown a willingness to push for financial stimulus. This is likely to have a positive effect on the price of bitcoin both before and after the election.
The value of bitcoin could continue to rise in his second term, given Trump’s militant attitude toward other governments and his unwillingness to unite the country. He says:
Trump has been very successful in building a dividing line between the United States and the rest of the world, and between his supporters and other Americans. Divisiveness, along with poor management of the coronavirus outbreak, is not a good sign for the US economy. These factors may lead new users to bitcoin, so that they can use it as a safe haven or tool to expose themselves to less fluctuations in the US market. However, the relationship between the ruling party and the rise and fall of markets and other economic indicators should not be considered as an indicator for short-term movements.