The Trump Administration is set to introduce reforms that may significantly alter the landscape of cryptocurrency in the United States. Former President Donald J. Trump’s perspective on digital assets has undergone notable changes since his previous term. Initially expressing doubt about cryptocurrencies in 2019, Trump’s recent attendance at a Bitcoin conference in June 2024 marked a pivotal shift, where he declared his intent to establish the U.S. as the “crypto capital of the planet.” At this event, he committed to amassing cryptocurrency reserves, ensuring all digital currencies are mined domestically, and stated he would replace Gary Gensler, then-chair of the U.S. Securities and Exchange Commission (SEC).
With the total market capitalization of cryptocurrencies exceeding $1 trillion, and Bitcoin’s value rising by 40% since Trump’s election, the growing relevance of digital assets and their global acceptance warrant a closer look at the potential legal and regulatory shifts that could emerge in a second Trump administration. Trump promised to remove Gensler “on day one,” and it was confirmed that Gensler would step down on January 20, 2025. During his tenure, Gensler prioritized enforcement actions against fraud and violations of securities laws, targeting several prominent cryptocurrency firms and high-profile celebrities.
On January 7, 2025, Trump proposed Paul Atkins for the SEC chair position. Atkins, who served as an SEC Commissioner from 2002 to 2008, gained a reputation for opposing enforcement actions during his term. He is currently the CEO of Patomak Global Partners, a consulting firm that advises numerous cryptocurrency businesses. Under Atkins’ leadership, the SEC is already showing signs of shifting away from an enforcement-heavy approach. For instance, the SEC requested a 60-day suspension of its litigation against Binance on February 10, citing potential resolutions, and sought a 28-day pause in its case against Coinbase on February 14, indicating ongoing reviews of crypto-related matters.
A key regulatory change anticipated in the new administration is a reevaluation of how digital assets are classified. Gensler maintained that most cryptocurrencies should be regarded as securities, while the U.S. Commodity Futures Trading Commission (CFTC) has classified many, including Bitcoin, as commodities. This classification is vital as treating cryptocurrencies as securities would subject them to stricter regulations and may limit access to the financial market.
The Trump Administration aims to provide clarity in cryptocurrency regulations, reportedly aligning with the CFTC’s stance on classifying digital assets as commodities. This shift could lead to an expansion of the CFTC’s authority over cryptocurrencies, diminishing the SEC’s role, particularly in overseeing significant aspects of digital assets like the spot markets for Bitcoin and Ethereum, along with the exchanges they inhabit.
On February 13, 2025, Trump nominated Brian Quintenz, a former CFTC Commissioner from 2017 to 2021 and a proponent of cryptocurrency, to lead the CFTC. His most recent role was as policy head for a cryptocurrency venture capital fund. The discourse around the taxation of cryptocurrencies has also garnered attention, with some advocates pushing for lower or eliminated capital gains taxes on digital assets to stimulate investment and usage.
In light of the regulatory ambiguities surrounding Decentralized Finance (DeFi) platforms, which leverage blockchain technology for peer-to-peer financial transactions, both regulators and politicians are pursuing initiatives to establish clearer guidelines. The creation of a “Presidential Working Group on Digital Asset Markets” by Trump and the SEC’s task force aimed at developing a comprehensive regulatory framework highlight this initiative. These efforts could stimulate innovation by alleviating the compliance burdens on emerging companies striving to navigate their legal responsibilities.
The decentralized nature of many cryptocurrencies raises concerns about the potential for untraceable illicit transactions. However, enforcing strict anti-money laundering regulations could impede the broader acceptance of digital assets. The Trump Administration may recalibrate the balance between privacy rights and anti-money laundering measures by modifying existing regulations to foster cryptocurrency adoption, while still addressing illegal activities.
President Trump has expressed his opposition to the establishment of a U.S. central bank digital currency, a proposed digital version of the dollar, asserting that he “will never allow” it. Conversely, he has indicated support for the “safe and responsible expansion of stablecoins,” advocating for regulatory clarity to enhance their safety and usability. Stablecoins tend to be less volatile due to their peg to the U.S. dollar and are viewed as having the potential to become a widely utilized medium of exchange.
Another facet of Trump’s vision for the U.S. to become the “crypto capital of the planet” includes his commitment to ensuring that all “remaining Bitcoin” is “made in the U.S.A.” Currently, the United States accounts for approximately 37% of Bitcoin mining, while China, despite its ban on Bitcoin mining in 2021, still contributes about 21%. Trump’s ambition is closely linked to energy policy, as he aims for the U.S. to achieve “energy dominance,” which may involve providing energy incentives or reducing regulatory obstacles related to energy usage and infrastructure.
Additionally, various leaders within the cryptocurrency market are advocating for the establishment of a U.S. Bitcoin reserve. On July 31, 2024, Senator Cynthia Lummis (R-Wyo.) introduced the Bitcoin Act of 2024, which proposes creating a strategic Bitcoin reserve similar to the petroleum reserve, committing the U.S. government to acquire one million Bitcoins—approximately 5% of the total circulating supply—over five years.
The proposed reforms by the Trump Administration have the potential to transform the cryptocurrency environment in the United States. A more defined regulatory framework, coupled with reduced litigation risks, economic incentives through tax or energy policies, and direct government investment in digital assets, could lead to greater adoption and innovation within blockchain technology. Enhanced regulation of digital assets may also mitigate the risks associated with these investments for cryptocurrency companies and their investors, potentially paving the way for institutional adoption within the financial sector, with banks and hedge funds likely to develop their own digital assets, broadening access to a wider audience.
In recent years, numerous digital asset firms have left the U.S. in search of a more favorable regulatory environment, taking American talent abroad. A shift in regulations and a more positive governmental attitude, as proposed by the Trump Administration, could entice professionals back to the U.S. to advance blockchain technologies domestically.
