Donald Trump this week said he’d never allow the government to release its own digital currency. But what the crypto industry really might like is for the former president to halt the current White House’s aggressive enforcement actions.
There are reasons to doubt whether that would happen, even in a second Trump administration.
Trump said this week that he would never allow the release of a U.S. central bank digital currency, sometimes referred to as a “digital dollar.” At least 130 countries, including the members of the European Union, the U.K., and China, are in various stages of researching or releasing CBDCs, according to the Atlantic Council.
In the U.S., the Federal Reserve has been experimenting with various forms of a CBDC, though its leaders have said the central bank wouldn’t release one without support from the White House and Congress.
“Such a currency would give our federal government the absolute control over your money,” Trump said in New Hampshire. “They could take your money. You wouldn’t even know it was gone. This would be a dangerous threat to freedom.”
The remarks were oddly timed, given that a CBDC isn’t on the horizon. They may reflect the influence of former Republican presidential candidate Vivek Ramaswamy, who immediately became a Trump campaign surrogate upon leaving the race. In an interview with Fox News, Ramaswamy said he had discussed opposition to CBDCs with Trump shortly before the former president said he’d oppose them.
Central bank digital currencies can be designed with various levels of government surveillance or control. On one end of the spectrum, a central bank could host people’s wallets, injecting or removing digital cash to achieve policy objectives. At the opposite end, a CBDC could be designed to be as anonymous as other forms of cash.
The Fed hasn’t gotten close to settling on any one system. In addition to saying they would wait for political input, Fed officials have said that a CBDC would be years away.
Some in the crypto industry cheered Trump’s stance because a CBDC would compete with other crypto products such as stablecoins, whose value is most often pegged to the dollar. They would be less relevant if the Fed issued crypto directly.
The largest stablecoin is issued by
Tether
and has a market value of about $95 billion. Circle Internet Financial, which said this month it would seek to become a public company, backs
USDC,
the second-largest stablecoin, with a value of $25.5 billion.
More critical for the crypto industry is whether the election will derail Securities and Exchange Commission Chair Gary Gensler’s aggressive enforcement efforts against various projects and platforms. To that end, there are reasons the industry shouldn’t get ahead of itself, according to TD Cowen policy analyst Jaret Seiberg.
The first reason is that Gensler’s term doesn’t end until June 2026, though Gensler could choose to step down before that. The SEC didn’t immediately respond to a request for comment.
It’s also unclear that cryptocurrencies would be much of a priority for the Trump administration. The direction of policy would depend on whom Trump appointed to the SEC, Commodity Futures Trading Commission, and other agencies.
“It is far from assured that Team Trump will want the political liability that comes with unilateral action to boost crypto,” Seiberg wrote in a research note this week.
Write to Joe Light at [email protected]
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