I. Introduction
In the 2024 US presidential election, Donald Trump ran on the platform of being the "President who supports innovation and BTC", proposing a series of disruptive cryptocurrency policy commitments that completely reversed his anti-crypto stance during his first term. In his campaign, he repeatedly emphasized the goal of making the US the "global capital of cryptocurrencies" and put forward multiple policy proposals to support the development of cryptocurrencies.
This shift not only stems from political strategy considerations to attract the crypto industry's votes, but also reflects the US's strategic considerations regarding the global status of the US dollar - to strengthen the dollar's hegemony through cryptocurrencies. This article systematically reviews Trump's crypto policy commitments, analyzes the progress and obstacles in their implementation, and looks ahead to the impact of his domestic and foreign policies on the crypto market.
II. Review of Trump's Crypto Policy Commitments
1. Top 10 Crypto Policy Commitments by Trump
During the 2024 election campaign, Trump put forward a series of policy commitments aimed at supporting and promoting cryptocurrencies, mainly focused on the following ten core areas:
1) Establishing a National BTC Reserve: Trump proposed to include BTC as a sovereign reserve asset of the US, using the BTC confiscated by the federal government through law enforcement actions as the initial reserve, and legislating annual procurement targets. He believes that by establishing a BTC reserve, the US can take a leading position in the global digital economy, while providing a new avenue for increasing national wealth.
2) Firing SEC Chairman Gary Gensler: Trump criticized the "enforcement-style regulation" of the current Securities and Exchange Commission (SEC) Chairman Gary Gensler, which stifles innovation, and promised to remove him from office on his first day in office. He advocates appointing crypto-friendly regulators to promote the development of the industry.
3) Blocking CBDC Development: Trump believes that central bank digital currencies (CBDCs) may pose a threat to personal freedom, and has pledged to permanently ban the Federal Reserve from issuing a digital US dollar, allowing privately issued cryptocurrencies to play a greater role in the financial system rather than government-led digital currencies.
4) Supporting Stablecoin Development: Trump plans to develop a lax regulatory framework, allowing stablecoins to access the Federal Reserve payment system and promoting them as tools for international trade settlement. Trump believes that stablecoins can improve the efficiency of the payment system and reduce the cost of cross-border transactions.
5) Building a BTC Mining Superpower: Through tax incentives, energy subsidies, and R&D support, Trump hopes to attract global mining companies to the US, enhancing the country's competitiveness in BTC mining. This not only helps create jobs, but also enhances the US's position in the global crypto ecosystem.
6) Defending Self-Custody Rights: Trump advocates legislation to protect users' right to control their own private keys, opposing restrictions on transactions from self-custody wallets. Individuals should have the right to control their own digital assets without interference from the government or institutions.
7) Repealing SAB 121 Accounting Rules: Trump believes that the current accounting rules are unfair to crypto companies and limit their development, and plans to ease the burden on crypto companies' balance sheets to enhance the industry's competitiveness.
8) Terminating "Operation Choke Point 2.0": Trump has promised to stop the regulatory agencies' restrictions on banking services for crypto companies, ensuring that crypto companies can fairly access financial services.
9) Pardoning "Silk Road" Founder Ross Ulbricht: Trump has stated that he will consider pardoning "Silk Road" founder Ross Ulbricht, as a symbolic support for the libertarian values of the crypto community.
10) Establishing a Cryptocurrency Presidential Advisory Council: Trump plans to establish a dedicated advisory council to develop a transparent regulatory framework and promote the integration of the crypto industry with traditional finance. The government should work with industry experts to jointly develop policies that foster innovation and protect investors.
2. Reasons for Trump's Shift in Position
Trump's attitude towards crypto has undergone a dramatic shift from "high-profile questioning" to "active embrace", which is underpinned by the following deeper reasons:
1) Economic Strategic Considerations: Consolidating the Dominance of the US Dollar
The US has long enjoyed the dividends of the US dollar as the world's primary reserve currency and settlement currency, but the trend of de-dollarization and diversification of settlement is accelerating globally. The stablecoins (the vast majority of which are pegged to the US dollar) introduced by the crypto industry provide a new path for the US dollar to maintain its "globally accepted currency" status. The linkage of stablecoins to US Treasuries and US dollar reserves can extend and amplify the US dollar's hegemony in the international financial market.
2) Political Maneuvering: Attracting Voter and Capital Support
With the explosive growth of the crypto industry in the past few years, the number and scale of digital asset holders have increased significantly, especially among young voters and tech professionals, and crypto-mindedness has gradually become a "new trend". During the 2024 election cycle, the cumulative political donations to the two-party candidates exceeded $200 million. Trump was very keen to capture the importance of this emerging force. At the same time, the capital and technological strength of these crypto companies can also provide a greater resource backing for Trump's campaign.
3) Personal and Business Interests: Promoting the Interests of the Trump Family
In addition to the undeniable factors at the political and national strategic levels, the Trump family also has potential interests in the crypto world. The WLFI project supported by the Trump family has already started to buy and hold BTC and ETH, WBTC, ONDO, TRX, LINK, AAVE, ENS, and other digital assets. They have also issued a token related to their image or brand, the "Trump Coin" ($TRUMP), which had a market capitalization of over $15 billion in a short period of time.
In any case, if Trump pushes for a lax crypto policy during the campaign, it will undoubtedly also indirectly increase the value of his family's assets and create a broader stage for their future business layout.
III. Analysis of the Progress and Obstacles in Implementing Trump's Crypto Policy Commitments
1. Measures Already Implemented
1) Change in Regulatory Leadership: Gary Gensler, the Chairman of the US Securities and Exchange Commission (SEC), resigned on January 20, 2025, and Trump appointed crypto-friendly Paul Atkins as his successor, pushing the SEC towards a "guiding-style regulation". In addition, Trump also plans to nominate a16z policy director and former Commodity Futures Trading Commission (CFTC) commissioner Brian Quintenz as the CFTC Chairman.
2) Signing of Crypto Executive Order: On January 24, 2025, Trump signed an executive order establishing an inter-agency working group to coordinate the development of a federal regulatory framework, and banning CBDC development.
3) Repeal of SAB 121: The SEC revoked this accounting rule in January 2025, easing the financial pressure on crypto custody platforms.
4) State-Level BTC Reserve Pilots: Multiple states have proposed or passed legislation to establish strategic BTC reserves, allowing state treasuries to allocate a portion of their budgets to BTC.
2. Ongoing Policies
1) National Bitcoin Reserve Act: Senator Cynthia Lummis has introduced the Bitcoin Strategic Petroleum Reserve Act, proposing to purchase 1 million BTC within 5 years, but it requires congressional budget approval and faces bipartisan concerns over price volatility risks.
2) Stablecoin Regulatory Framework: The Treasury Department and issuers have launched the "Stablecoin Regulatory Standards Program", aiming to establish an international payment framework within 5 years, but traditional banks are likely to oppose the disruption of stablecoins to existing payment networks.
3) Mining Support Policies: The "Bitcoin Energy and Innovation Act" has entered the legislative process, intending to provide tax incentives for green mining, but grid capacity and subsidy funding sources remain controversial.
3. Major Obstacles and Uncertainties
1) Delays in the Legislative Process: Bitcoin reserve and mining subsidy policies at the federal level require congressional approval, and the Republicans have a slim majority in the Senate, with Democratic lawmakers criticizing it as "fiscal adventurism".
2) Legal Challenges: The pardon of Ulbricht may trigger public backlash (he was sentenced to life imprisonment for drug trafficking and money laundering), and the legal procedures are complex.
3) Market Volatility Risks: If the national BTC reserve plan is implemented on a large scale, it may exacerbate the fiscal deficit due to BTC price fluctuations. The US federal budget deficit for fiscal year 2024 is expected to reach $1.8 trillion, an increase of $139 billion from the previous fiscal year.
4) International Coordination Challenges: The opposition to CBDCs conflicts with the EU's MiCA regulation and China's digital yuan promotion, which may lead to the fragmentation of the cross-border payment system.
IV. Progress of Bitcoin Reserve Legislation in US States
Source:https://legiscan.com/
As of February 11, at least 27 US states have participated in the race to establish BTC reserves, aiming to hedge against inflation and enhance fiscal resilience through diversified investments.
1. States that Have Passed or Are Close to Approval
1) Utah: The Utah House of Representatives passed HB230 on January 28, 2025, allowing up to 5% of public funds to be invested in BTC, high-cap cryptocurrencies, and stablecoins. The bill has been submitted to the Senate and, if passed, will be the first state in the US to formally establish a BTC reserve.
2) Arizona: Senate Bill SB1025 has passed the Senate Finance Committee and is awaiting a vote in the House. If approved, Arizona may closely follow Utah in establishing a reserve.
3) Pennsylvania: The state was among the early movers, proposing a bill in November 2024 to allow the Treasury Department to use 10% (about $1 billion) of the general fund to purchase BTC.
2. States with Bills Under Consideration
1) Texas: A bill was proposed in December 2024, allowing residents to donate to a state BTC fund, requiring BTC to be cold-stored for at least 5 years, and prohibiting out-of-state transactions. The bill has not yet reached the final voting stage.
2) Ohio: Two bills (including House Bill 57) have been proposed, requiring the establishment of a BTC reserve fund and authorizing the Treasurer to purchase BTC, currently in the legislative framework discussion stage.
3) Maryland: House Bill 1389 plans to use confiscated illegal gambling funds to purchase BTC, expected to take effect in October 2025.
4) Kentucky: House Bill 376 allows state funds to invest in digital assets with a market cap over $750 billion (currently only BTC qualifies), with an investment cap of 10%.
5) Other States: Including Florida, Alabama, New Hampshire, South Dakota, and 15 other states have also proposed similar bills, but most are still in the early legislative stages.
3. Failed or Obstructed States
1) North Dakota: House Bill 1184 was rejected (32 votes in favor, 57 votes against) due to significant opposition.
2) Wyoming: The bill did not pass the legislative process, with no specific reasons disclosed.
4. Federal-Level Developments
Senator Cynthia Lummis has pushed the "American BTC Strategic Petroleum Reserve Act", proposing to purchase 1 million BTC (5% of the total supply) within 5 years, and suggesting the use of gold reserves or asset forfeiture funds to support the plan. Although the Federal Reserve maintains a conservative stance, the crypto-friendly policies of the Trump administration may accelerate the federal legislative process.
Source: https://polymarket.com/
V. Impact of Trump's Domestic and Foreign Policies on the Crypto Market
1. Tariff Policies and Trade War Risks
On February 1, Trump signed an executive order imposing a 10% tariff on imports from China and a 25% tariff on imports from Canada and Mexico (with a 10% rate for Canadian energy products). This policy is seen as a continuation of Trump's "protectionist" trade policy, aimed at protecting domestic industries and increasing fiscal revenue.
1) Short-term Market Volatility: After the announcement of Trump's tariff policy, the market experienced a strong risk-averse sentiment, and the crypto market reacted quickly, with BTC price dropping more than 6% within 24 hours, briefly falling below $94,000; ETH had an even larger decline of 27%, with the price dropping to around $2,100. The market liquidation amount exceeded $2 billion.
2) Long-term US Dollar Liquidity Contraction: If the trade war escalates and leads to a sell-off of US Treasuries (currently $36 trillion), the crypto market may come under pressure along with other risk assets.
2. BTC Reserve Collateralization and High Volatility Risks
The Trump administration has proposed to include BTC in the US strategic reserve assets (SBR), planning to purchase BTC through the Treasury Department's Exchange Stabilization Fund (ESF) to enhance economic resilience. The US government currently holds 207,000 BTC (worth about $10.4 billion). If the policy is implemented, BTC's "digital gold" attribute may be strengthened, driving its valuation higher. However, the feasibility of this path is questionable. If using BTC as collateral for US Treasuries, it requires international creditors to recognize its price stability, but BTC's high volatility may undermine its creditworthiness as collateral.
3. Stablecoin Circulation Mechanism Concept and Compliance Risks
The Trump team has hinted at strengthening the dollar's reflux through a "dollar-stablecoin-US Treasury" closed loop. Currently, 95% of stablecoins are pegged to the US dollar, with 80% of their reserve assets invested in US Treasuries, forming a "stablecoin buying US Treasuries - US Treasuries supporting the US dollar's credit - US dollar flowing back to the US" cycle. If this mechanism is scaled up, it may deeply bind the crypto market to the US dollar system, while also easing debt pressure. However, this mechanism depends on the compliance of stablecoin regulations, and the "21st Century Financial Innovation and Technology Act" promoted in Trump's new policies, if passed, may clarify the classification and regulatory framework of stablecoins, providing a policy foundation for this closed loop.
4. Payment System Fragmentation under US-China Tech Competition
China is accelerating the promotion of the digital renminbi (DCEP), leveraging DCEP pilot projects to expand the influence of cross-border payments, while the Trump administration is firmly opposed to central bank digital currencies (CBDCs) and instead supports private stablecoins to maintain the dominance of the US dollar payment system. This "CBDC vs. Stablecoin" system confrontation may reshape the global financial landscape.
VI. Outlook and Summary: Opportunities and Risks Coexist
Trump's new crypto policy has undoubtedly brought major changes to the crypto industry in the United States, with the policy reforms he proposed emphasizing the "strategic embrace" of the crypto market, to some extent changing the U.S. government's regulatory attitude towards crypto assets. However, the actual effects of the policy and future development still face many challenges.
Historical data shows that Trump's promised fulfillment rate is only 31%. This low fulfillment rate means that the crypto industry needs to be particularly cautious about his policy commitments when facing Trump's new policy. Whether Trump's new crypto policy will succeed still depends on the resolution of three core contradictions.
1) Balancing innovation and risk: Trump's new policy emphasizes a relaxed regulatory policy, trying to provide space for crypto technology innovation by easing regulation. However, excessive relaxation may lead to the risk of a collapse similar to the past, so it is necessary to establish a more dynamic regulatory mechanism, find a balance between innovation and risk, avoid over-regulation that constrains technological development, and ensure market stability.
2) Conflict between political commitments and legislative realities: The grand vision of the Trump administration, such as Bitcoin reserves, needs to break through the political divisions between the two parties and fiscal constraints. In the U.S. political environment, the differences of opinion between the two parties may have a significant impact on the advancement of crypto policies. The implementation of policies will face more political games, which also means that the crypto market will face greater policy uncertainty.
3) The game between U.S. dollar hegemony and the ideal of decentralization: While private stablecoins can consolidate the position of the U.S. dollar, this approach conflicts with the decentralization ideology of the crypto industry. In the crypto industry, decentralization has always been a core value, but Trump's policy may cause the U.S. dollar to further penetrate the crypto market, and this contradiction may challenge the "anti-censorship" spirit of the crypto industry.
In general, Trump's crypto policy has brought unprecedented opportunities for the crypto industry in the United States and even globally, but the implementation of the policy and the market's response are still full of uncertainty. For investors, investors need to be vigilant about the volatility of policies and the risk of market bubbles. The future of the crypto market depends on the consolidation of the technical foundation, such as Layer2 scaling technology, ZK proofs, and a more robust compliance framework. These technologies and compliance measures will help the market overcome cyclical fluctuations and welcome the true era of "crypto civilization".
