Trump vs Biden: Contrasting Stances on Cryptocurrency Policies
Summary:
This article contrasts the cryptocurrency policies of former President Donald Trump and current President Joe Biden. Under Biden's administration, crypto-related businesses and users faced restrictions, such as a revival of Operation Choke Point and a proposed tax on crypto miners' energy use. Trump's administration was also hostile toward crypto, despite his public statements supporting it. Comparing their stances, the author concludes that neither leader comes off as a "crypto champion," adding that voters again face a decision between the lesser of two evils when it comes to cryptocurrency policy.
With the presidential elections fast approaching, the excitement among the public is rising regarding Donald Trump’s positive views on cryptocurrency. However, how does he stand in comparison to the current President? Despite their differences on many fronts, Trump and Biden seem closely aligned on the issue of crypto. President Biden hasn't earned much support from the crypto community, but apart from an executive order on cryptocurrency research and a tweet targeting tax loopholes benefiting wealthy crypto investors, he hasn’t been too vocal about it. The disapproval comes primarily from the actions of his administration.
For instance, in February 2023, there was public outcry over the revival of Operation Choke Point – an initiative from the Obama era – by the Biden administration, which aimed to ostracize businesses and users related to cryptocurrency from the conventional financial system. As observed by Nic Carter, the government was increasing pressure on banks involved with cryptocurrency.
In the following month, Daleep Singh, a former advisor to Biden, admitted his efforts to promote the establishment of a Central Bank Digital Currency (CBDC) as it would challenge the existing crypto ecosystem. Further, the Biden administration proposed a 30 percent tax twice – in May 2023 and again in March 2024 – on the energy expenditures of crypto miners. The Council of Economic Advisors of the White House reasoned that the tax would make firms more aware of their societal harms. However, many highlighted that the objective seemed to be more aligned towards shutting down miners rather than environment conservation, as the tax applied even to miners using renewable energy.
Recently, the Energy Information Administration imposed a mandatory data-collection order on crypto miners which was eventually revoked upon being challenged in court. Moreover, over the past few years, the Securities and Exchange Commission (SEC) has been repeatedly releasing regulations and taking enforcement actions. Gary Gensler, Chairman of SEC, even suggested that everything excluding Bitcoin could be under threat. Jennifer Schulp and Jack Solowey, my colleagues, have described this approach as irrational and unfair.
Considering this hostile behavior, it’s understandable why people are anticipating a change. But, is Donald Trump the answer? Trump has certainly seized the public discontent and catered to it by expressing interest in his sneaker sales’ contribution from cryptocurrency and indicated that he wouldn’t want to disrupt it just yet, considering his possession of around $2.8 million in cryptocurrency as revealed last year.
But, Trump’s not an outright libertarian or maximalist. In a statement regarding Bitcoin in February, Trump mentioned the need for regulation and emphasized his intent to retain dollar’s dominance by reiterating his stand from 2021 on the necessity for strict regulation of crypto to prevent it from rivaling the dollar.
Throughout his presidency, Trump was notably averse to cryptocurrencies, stating in 2019 that he was not a fan of Bitcoin and other cryptos, criticizing them for their high volatility and unsubstantiated value which promotes unlawful activities like drug trade and illegal behavior. He even suggested that organizations planning to create cryptocurrencies should be monitored as banks. Clearly, Trump supports stricter control on currency competition, more financial scrutiny, and increased regulatory burdens.
In terms of policy at the agency level, the scenario varied as cryptocurrency was gradually becoming mainstream. Under Stephan Mnuchin, Treasury Secretary, the Financial Crimes Enforcement Network introduced the notorious wallet rule to enhance financial surveillance and collect data on crypto users. Jay Clayton, SEC chair, took action against 57 cryptocurrency-related firms. However, some top officials advised caution. Then-chief economist for Vice President Mike Pence, Mark Calabria, stated, "We are approaching this with an open mind." Acting Comptroller of the Currency Brian Brooks was pro-crypto and endorsed reforms. Similarly, CFPB Acting Director Mick Mulvaney warned against over-regulation.
While Trump might seem slightly more favourable on cryptocurrency matters than Biden, neither can be labeled as a "crypto champion". Yet again, voters will have to decide between the lesser of two evils.
Nicholas Anthony, a policy analyst at the Cato Institute's Center for Monetary and Financial Alternatives, is the author of The Infrastructure Investment and Jobs Act’s Attack on Crypto: Questioning the Rationale for the Cryptocurrency Provisions and The Right to Financial Privacy: Crafting a Better Framework for Financial Privacy in the Digital Age. This article is meant for informational purposes only and must not be construed as legal or investment advice. The author's views are exclusive and might not represent those of Cointelegraph.
Published At
3/16/2024 1:48:53 AM
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