Donald Trump’s Crypto-Friendly Policies

Donald Trump’s return to the White House would positively impact the cryptocurrency and digital asset sector, according to a recent note from Compass Point Research & Trading.

Trump is supportive of crypto, and his campaign is accepting crypto donations. Last month, he met with crypto miners to discuss how the crypto industry could enhance U.S. energy production, distribution, AI development, and data centers.

The former president wants all Bitcoin (BTC) mining to occur in the U.S. His pro-crypto stance is now part of the Republican National Committee’s 2024 Platform, which aims to end the crackdown on crypto and prevent the establishment of a central bank digital currency (CBDC). The platform also advocates for the self-custody of crypto assets and BTC mining.

Additionally, Trump has chosen Senator J.D. Vance (R-OH) as his Vice Presidential candidate. Vance, who previously campaigned on a pro-crypto platform, is circulating draft legislation to address crypto regulation by the SEC and CFTC. His bill is viewed as more favorable to the industry than the Financial Innovation and Technology for the 21st Century Act (FIT21), which passed the House with broad bipartisan support. Vance also holds between $100,000 and $250,000 in BTC.

Compass Point notes that under a Trump/Vance administration, the prospects for crypto legislation becoming law would improve significantly, possibly accelerating crypto legislation. Currently, there is an expectation that stablecoin legislation will lead the crypto movement in Congress. However, Trump’s pro-crypto stance and the bipartisan support for FIT21 suggest that broader crypto legislation could be enacted in 2025 or 2026.

Compass highlights bipartisan support as crucial for improving the outlook for crypto policy. Senate Agriculture Committee Chair Debbie Stabenow (D-MI) is circulating a draft bill to give the CFTC authority over digital assets, a crucial step for moving crypto regulation forward before the August break.

Collaboration with House Financial Services Committee Chair Patrick McHenry (R-NC), who oversaw FIT21’s passage, indicates potential for bipartisan cooperation on crypto regulation.

Looking ahead to 2025, a Trump administration with a Republican-controlled Congress would have a valuable two-year window to pass crypto legislation. The passage of FIT21 and Stabenow’s push to move her bill through committee shows a shifting landscape favoring comprehensive crypto legislation.

Compass’s analysts assign a better than 60% chance for comprehensive crypto legislation to become law in the 119th Congress, with intentions to reassess this outlook after the November election.

A change in administration may also bring a new SEC Chair. Hester Peirce, a potential candidate for the position, supports crypto, which could halt enforcement actions and expedite the resolution of ongoing cases like the SEC’s lawsuit against Coinbase (NASDAQ: COIN). This change could also allow the SEC to define when a digital asset qualifies as a security.