Trump proposes crypto proposals that include pardoning Ross Ulbricht of Silk Road, a national crypto reserve, and clearer regulations. Experts talk about how it would affect blockchain innovation and taxation in the US.
President Trump has pledged to make the US the world’s leading crypto nation by signing an executive order to establish regulatory clarity around digital assets, addressing years of uncertainty.
Trump’s order includes creating a national stockpile of digital assets and prohibiting Central Bank Digital Currency (CBDC), while also signing a full pardon for Silk Road mastermind Ross Ulbricht.
The United States is on the correct track
Although the US has long led the world in cutting-edge technology, its government has imposed stringent laws and rules pertaining to the blockchain and cryptocurrency sectors.
According to Will Martino, president and co-founder of the blockchain startup Kadena, this has severely disadvantaged those employed in the US Web3 sector, he told Cryptonews.
Martino, though, thinks that the nation is at last heading in the right route. “It would be foolish to not be extremely bullish on the US-based crypto market,” he added, adding that only time will tell.
Getting Past Bitcoin
Martino went on to say that he wants to see all valid US-based cryptocurrency initiatives included in a US strategic crypto reserve. Although Trump has indicated a desire to establish a strategic Bitcoin reserve, Martino thinks several initiatives should be funded.
The Trump Administration should support the US market for crypto and blockchain, diversifying it across all sectors to foster innovation and growth. Project director for the Data Ownership Protocol, Avidan Abitbol, suggests the US Securities and Exchange Commission should examine crypto ETFs beyond Bitcoin, demonstrating their belief in the broader potential of these technologies.
Crypto-based exchange-traded fund applications have doubled since former SEC Chair Gary Gensler’s resignation, with 33 crypto asset ETF filings submitted to the US SEC. The list includes Bitcoin and Ether products, as well as Solana, Litecoin, Doge, and a Trump exchange-traded fund. A clear approval process for these products could make it easier for institutions to gain exposure to the crypto market.
End Regulation-By-Enforcement
Industry experts predict the end of regulation by enforcement in the US due to the exodus of talent due to unclear regulations around crypto and blockchain. Dave Hendricks, CEO and co-founder of digital asset firm Vertalo, believes an end to regulation-by-enforcement is necessary due to the lack of clarity.
US-based Web3 companies are facing increased legal and business insurance fees due to the ‘pin the tail on the donkey’ approach to regulation. Martino emphasizes the need for clear policies and regulations to accelerate innovation and real-world adoption in crypto and blockchain industries.
Bank Secrecy Act Repeal
Natalie Smolenski, executive director of the Texas Bitcoin Foundation, expressed her desire for the repeal of the Bank Secrecy Act, introduced by Elizabeth Warren in the US Senate in 2023, which mandates recordkeeping and reporting requirements for national banks and foreign banks.
The Bank Secrecy Act would force digital asset providers to follow similar regulations as traditional banks, according to Smolenski. He argues that this would be a violation of human liberty, as using the banking system should be a free choice, not a legal requirement.
Abitbol predicts the Trump administration may be open to innovative solutions like zero-knowledge proofs (ZKPs), which could help keep transactions private while maintaining transparency in crypto. ZKPs allow software to verify transaction legitimacy without revealing details, offering compliance without privacy trade-offs.
Improved Crypto Tax Relief Initiatives
Web3 companies and investors face challenges in tax policies regarding digital assets. The US IRS report in June 2024 mandates reporting of digital asset sales and exchanges by centralized crypto exchanges and brokers. However, further clarity is needed, and potential tax reforms are being monitored.
Challenges to Consider
Trump’s efforts to promote crypto-friendly measures are a step in the right direction, but challenges persist due to misinformation, fear, and uncertainty surrounding blockchain technology. Industry leaders, politicians, and policymakers still lack understanding of the difference between cryptocurrency and blockchain technology, highlighting the need for a new narrative.
Cryptocurrency founder Daniel Polotsky warns that passing lasting legislation is complex, despite the regulatory agencies in the executive branch fostering a pro-crypto environment. With a narrow majority in both chambers, Republicans will likely need to work with Democrats and prioritize legislation before midterm elections.
