While on the campaign trail, Donald Trump made a variety of promises to the crypto community. He pledged to fire Securities and Exchange Commission (SEC) Chair Gary Gensler “on day one,” promote Bitcoin (BTC) mining in the U.S., create a strategic Bitcoin reserve, prevent a central bank digital currency (CBDC) from being created, and commute the sentence of crypto advocate Ross Ulbricht, among other things.
Because of these promises, many in the crypto industry have high hopes for the incoming presidency, while others are urging caution and advising the community not to get their hopes up too much. Only time will tell how much of President Trump’s agenda will ultimately be enacted.
Firing Gary Gensler
Trump has pledged to remove Gensler from the SEC on his first day in office. Gensler was appointed SEC chair by current President Joe Biden in 2021. During his tenure, he has presided over an SEC that has sued numerous popular crypto exchanges and projects.
The SEC brought enforcement actions against the largest exchange in North America, Coinbase, as well as decentralized exchange Uniswap, blockchain-based video streaming company Lbry, Web3 video game developer Immutable, and MetaMask wallet developer Consensys, among others. In each case, the SEC has claimed that cryptocurrencies are often legally securities and that their developers must register the coins with the SEC.
Many crypto businesses and users have rejected this interpretation of securities law, and Trump has promised to get rid of Gensler because of it. Gensler’s term ends in April 2025. At that point, Trump could replace Gensler with someone more friendly to the crypto industry. He could also remove Gensler “for cause” on day one, although whether Gensler’s actions as chair constitute “cause” is sure to be litigated. Another scenario is that Gensler could resign, sparing Trump the need to fire him.
Freeing Ross Ulbricht
Trump has also promised that he will commute the sentence of former darknet marketplace operator Ross Ulbricht on day one, possibly allowing him to walk free. Ulbricht was the creator of Silk Road, a website that allowed users to sell various items, including illegal products such as unregistered guns and drugs, in exchange for Bitcoin.
Ulbricht was arrested in 2013 and is currently serving two life sentences plus 40 years, without the possibility of parole, for his role in founding Silk Road. Supporters claim that his sentence is too harsh for a web designer who merely facilitated the trade of drugs and did nothing violent. Trump could commute his sentence to time served, setting him free immediately, or reduce his sentence to something less than life without parole.
Supporting American Bitcoin Mining
Trump has promised to encourage Bitcoin mining in the United States, stating he wants “all the remaining Bitcoin to be MADE IN THE USA.” Although the incoming president hasn’t given details on how he will accomplish this aim, some in the crypto community view Trump’s win as bullish due to his pro-mining stance.
Bitcoin mining is sometimes opposed by environmental groups because of the perception that it has a large carbon footprint. However, a pro-mining president could use their position to prevent new environmental regulations against Bitcoin mining from being enacted.
Creating a Strategic Bitcoin Reserve
Another crypto-related promise Trump has made is to create a “strategic Bitcoin reserve” by instructing law enforcement agencies not to sell the Bitcoin they’ve seized from criminal enterprises. Supporters of this policy argue that Bitcoin is an important reserve asset and that holding onto it could eventually help the U.S. pay off its national debt.
Cynthia Lummis, a U.S. senator from Wyoming and a known supporter of crypto, introduced a bill to create such a reserve in July. However, the bill has not been passed.
Preventing a CBDC
Trump has also pledged to prevent the creation of a central bank digital currency (CBDC), a blockchain payment system run by the government. CBDCs use blockchains similar to those used by private cryptocurrencies, except that these networks are controlled by the government.
The crypto industry is divided over whether CBDCs are good or useful, with some seeing them as an improvement over slow and cumbersome banks, while others view them as dystopian systems that will eliminate privacy. Regardless, Trump has vowed to prevent the U.S. from having an official digital dollar, which at least some crypto users see as positive.
Not Everyone Is Convinced
While Trump has made many promises to crypto users and the industry as a whole, some in the industry do not believe he will follow through or that these promises are even possible. For example, in response to Trump’s claim that he wanted all the remaining Bitcoin to be made in the U.S., Shapeshift founder Erik Voorhees called it “absurd nationalist/protectionist nonsense, betraying both a lack of understanding of Bitcoin and a lack of understanding of economics broadly.”
Additionally, Casa wallet founder Jameson Lopp criticized Trump’s plan for a strategic Bitcoin reserve, arguing that half of the BTC seized by law enforcement actually belongs to the Bitfinex exchange and, therefore, must be returned to it.