Trump is comprehensively reforming cryptocurrency regulation, updating tax policies, and working to establish a national Bit reserve strategy, paving the way for the United States to become the first G7 economy to fully embrace cryptocurrency.
Forbes author Sandy Carter wrote: "Trump's second administration is already reshaping the U.S. cryptocurrency landscape."
Small countries like El Salvador have attracted Bit enterprises by establishing strategic Bit reserves and crypto-friendly policies. The International Monetary Fund (IMF) recently limited El Salvador's future Bit purchases, but it has accumulated approximately 6,101 Bits as a strategic reserve. It is reported that one of the world's most profitable crypto companies, Tether, is also moving its headquarters to El Salvador.
Similar to El Salvador's President Bukele, Trump attracted crypto voters during the 2024 campaign. Last July, he made a notable promise to an enthusiastic crypto crowd at the Nashville Bit Conference.
Forbes author Susie Violet Ward, who attended the conference, wrote that Trump said "the United States will become a 'Bit mining powerhouse'" and urged supporters to never sell their Bits.
Susie Violet Ward wrote: "The combination of political determination and financial innovation marks a decisive moment in the Trump era and means broader acceptance of Bit in mainstream politics."
Despite Trump's volatile tariff policies causing market disruption, his crypto-friendly policies helped Bit prices avoid falling below the previous cycle's high of around $73,000. The relative stability of cryptocurrency prices may be partly due to the U.S. government's newly adopted more moderate regulatory attitude.
Trump's Crypto Policies Emulate Singapore and Dubai's Light Regulation Model
Zennon Kapron, a FinTech writer for Singapore and director of the Asia Securities Industry and Financial Markets Association, wrote that Singapore established its reputation as a crypto center by avoiding complex regulations, even without establishing a Bit strategic reserve.
Kapron stated: "Crypto companies are flocking to Singapore, not so much because of specific measures the country has taken, but because of what it hasn't banned."
He added that through a minimalist regulatory approach, Singapore became the world's third-largest blockchain investment center in 2023, behind only the United States and the United Kingdom.
Trump saw Singapore's rapid rise through a light regulation model and established a similar regulatory framework in his administration. This relatively laissez-faire strategy is closer to the non-intervention policies enjoyed by crypto investors in places like the Cayman Islands and Hong Kong. Following this line of thought, Trump signed H.J. Res. 25 on April 10, simplifying the originally complex tax paperwork for DeFi brokers.
Forbes tax contributor Robert Woods explained: "Taxpayers must know when they bought cryptocurrency, how much they paid, and what they obtained. This might be simple for stocks and real estate, but much more complicated for cryptocurrency. Many crypto investors make multiple purchases at different times over several years."
Although crypto users and companies still need to report taxable events, simplifying paperwork makes it easier for Americans to comply with the law. Before this new tax guidance, the U.S. Comptroller of the Currency had written a letter in March to rescind a guideline that made it difficult for banks and savings institutions to provide crypto services.
Earlier this month, a Department of Justice memo showed that the government has disbanded the team of prosecutors focused on crypto companies. Forbes contributor Andrea Tinianow wrote that this DOJ shift could positively impact pending court cases related to crypto privacy tools like Tornado Cash, which will determine "whether developers should be criminally responsible for open-source code used by others to commit financial crimes". According to a memo from Deputy Attorney General Todd Blanche, law enforcement will no longer act as "digital asset regulators" through prosecution, but instead focus on combating "bad actors".
The memo stated: "The Department of Justice will no longer target virtual currency trading platforms, mixing services, and offline wallets for the actions of their end-users or unintentional violations." In short, the DOJ will not pursue developers of crypto tools or tax-paying companies providing legal crypto services. The Trump administration wants the government to stop intervening in the crypto industry.
Forbes tax contributor Joshua Smeltzer wrote: "This aims to reduce regulatory burden, encourage responsible innovation, and ensure consistent treatment of banking activities, regardless of whether the underlying technology involves blockchain."
This may have been inspired by smaller countries with more relaxed attitudes toward crypto regulation. Dubai lawyer and Forbes contributor Irina Heaver wrote that hundreds of crypto companies are flooding into the UAE, regulated by Dubai's DMCC. They now contribute 7% to the UAE's GDP.
Heaver wrote: "Clear regulation is the cornerstone of Dubai's success as a crypto center."
Bit Mining Dominance
Trump makes no secret of his reasons for clearing obstacles for the crypto industry: to bring high-paying jobs and Bit mining dominance to the United States.
According to the Cambridge Bit Power Consumption Index, the most powerful crypto mining companies in 2022 were from China or Russia. Since then, dozens of companies have moved to Texas, but this shift stalled during the Biden administration.
Now, Trump's second term coincides with the crypto market's four-year bull market cycle; Bit prices have risen nearly 30% since Trump's victory six months ago.
Forbes contributor, Bit core developer, and venture capitalist Abubakar Nur Khalil wrote: "Bit prices have significantly increased in each halving cycle, both in the halving year and two years later. Unlike previous halvings, investors can now use increasingly more financial instruments and methods to capture Bit price trends, from direct Bit purchases, stocks of Bit mining companies, or stocks of publicly traded companies with Bit on their balance sheets, to Bit ETFs."
Legal experts like Tonya Evans, former professor at Penn State Dickinson Law School and Forbes contributor, also noted how unprecedented it is for a sitting president's family to personally benefit from crypto projects. In addition to various Altcoin companies, Eric Trump and Donald Trump Jr. announced their new Bit mining enterprise, American Bit, earlier this month.
Bipartisan Support for Strategic Crypto Reserves
So far, Trump's Bit reserve strategy seems to have bipartisan support. Forbes contributor Sam Lyman described California Representative Ro Khanna as an "important voice in the core group of Democrats on crypto issues", while Alabama Democratic Representative Shomari Figures and Arizona Democratic Representative Yassamin Ansari also issued public statements indicating potential support for the strategy. Ansari promised to "lead the way in blockchain and crypto innovation".
Additionally, 14 Democrats, including New York State Representative Ritchie Torres, wrote to the Democratic National Committee Chairman last year, requesting the party to "adopt a forward-looking attitude towards digital assets and blockchain technology". Even Trump stated in March that he hoped to include high-risk assets such as ETH, ADA, and XRP in strategic crypto reserves.
Besides welcoming Bitcoin mining companies, holding various cryptocurrencies in strategic reserves, and suspending enforcement actions against small industry participants, the Trump administration also leveraged bipartisan interest in protecting dollar-denominated stablecoins. If globally popular crypto assets continue to be pegged to the US dollar, this could indirectly benefit the US economy.
Cleve Mesidor, executive director of the Blockchain Foundation and Forbes contributor, stated: "The recent 13-hour marathon revision of the 'Stablecoin Transparency and Accountability for a Better Ledger Economy Act' may indicate the need for longer bipartisan cooperation."
It is too early to assert whether these policies will attract new companies to the US, but industry giants like Coinbase CEO Brian Armstrong are now criticizing the previous administration, preferring Trump's policies. Many crypto companies such as Coinbase, Kraken, Ripple, Robinhood, and Circle also donated to Trump's inauguration committee. Shortly after Ripple's donation, US regulators dropped legal charges related to the company and XRP, and the Trump administration also included XRP in its strategic reserve plan.
The Future of US Crypto Enterprises and Bitcoin Price Trends
Bipartisan efforts to relax regulations and establish crypto asset strategic reserves seem to be protecting the cryptocurrency market from Wall Street volatility. Bitcoin's current price trend is more stable than the US stock market.
The current halving cycle may end in early 2026, and Trump administration policies could further influence the Bitcoin market. This includes normalizing conflicts of interest. The Trump family is now actively involved in crypto business, reallocating enforcement resources, and potentially pardoning Bitcoin "veterans" like Silk Road founder Ross Ulbricht and BitMEX platform founders Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer.
Looking ahead, conducting crypto business in the US may involve fewer legal risks.
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