The Trump Administration has proposed changes that could reshape the American cryptocurrency landscape.
President Donald J. Trump’s stance on cryptocurrencies has evolved significantly since his last presidency. Although in 2019 he voiced skepticism about digital assets, in June 2024, he attended a Bitcoin conference where he pledged to make the United States the “crypto capital of the planet.” At that conference, he promised that the United States would stockpile cryptocurrency, that all cryptocurrencies would be mined in the United States, and that he would fire Gary Gensler, then the Chair of the U.S. Securities and Exchange Commission (SEC).
Today, all cryptocurrencies are collectively worth over $1 trillion, and the value of a Bitcoin has increased by 40 percent since President Trump’s election. In light of cryptocurrency’s increasing significance and global adoption, it is worth exploring potential legal and regulatory changes that may take place in a second Trump Administration.
President Trump vowed to replace Gensler “on day one,” and the SEC announced that Gensler would step down on January 20, 2025. Under Gensler’s leadership, the SEC focused heavily on enforcement actions for fraud and other securities law violations, including against three large cryptocurrency companies purporting to be market makers and several celebrities.
On January 7, 2025, President Trump nominated Paul Atkins to head the SEC. Atkins was an SEC Commissioner from 2002 to 2008, a period during which he developed a record of voting against enforcement actions. He is the chief executive office of Patomak Global Partners, a firm that offers consulting services to a number of cryptocurrency companies.
The SEC under Atkins has already begun to shift away from regulating through enforcement. On February 10, the SEC requested a 60-day pause in its litigation against Binance in light of a potential resolution, and on February 14, the SEC requested a 28-day pause in its action against Coinbase. In its February 14 court filing, the SEC stated that “because the commission’s review of crypto-related issues is ongoing, the commission requests this additional time to prepare its answer to Coinbase’s petition and for appropriate review.”
One of the central regulatory changes that may take place in the current Administration is a shift in the SEC’s stance on how digital assets are classified. Gensler argued that most digital assets are securities. However, the U.S. Commodity Futures Trading Commission (CFTC) has classified many cryptocurrencies, including Bitcoin, as commodities. The distinction is crucial. As a security, cryptocurrency would likely be subject to more stringent controls and potentially reduced access to the financial sector.
The Trump Administration has signaled that it wants to bring regulatory clarity to this space. The Administration reportedly supports the CFTC’s classification of cryptocurrencies as commodities that fall under its purview. The next four years may therefore see the CFTC’s power over cryptocurrencies expand while the SEC’s role in overseeing crypto decreases, with the CFTC potentially overseeing important portions of the digital assets, such as the spot market for Bitcoin and Ethereum and the exchanges they are traded on.
On February 13, 2025, Trump nominated Brian Quintenz to head the CFTC. Quintenz was CFTC Commissioner from 2017 to 2021 and is himself a big advocate of cryptocurrencies. Quintenz’s most recent position was as head of policy for a cryptocurrency venture capital fund.
The tax treatment of cryptocurrencies has also been subject to much speculation, with some advocates calling for the elimination or reduction of capital gains taxes on cryptocurrencies to encourage investment and use.
In response to the regulatory uncertainty regarding Decentralized Finance platforms, which use blockchain to allow entities to conduct financial transactions with each other, regulators and politicians have pursued initiatives to provide clearer guidelines. President Trump’s executive order establishing a “Presidential Working Group on Digital Asset Markets,” and the SEC’s task force for “developing a comprehensive and clear regulatory framework” both reflect this push for clarity. These initiatives could foster innovation by reducing the regulatory burden on new companies that may be struggling to determine their legal obligations.
The decentralized nature of many digital assets also creates a greater risk that illegal payments will be difficult to trace, but stringent anti-money laundering regulations could hinder the widespread adoption of digital assets. Government oversight may also pose a problem to users’ privacy rights.
The Trump Administration could shift the current balance between privacy rights and anti-money laundering regulations by revising or relaxing some of the existing rules to promote cryptocurrency adoption, while still combating illegal activities.
President Trump has also spoken out against the creation of an American central bank digital currency—a proposed digital version of the U.S. dollar—stating that he “will never allow the creation of a central bank digital currency.” President Trump has signaled support, however, for the “safe and responsible expansion of stable coins,” aiming for regulatory clarity to make them safer and therefore more widely used. Stablecoins are often less volatile because they are commonly pegged to the U.S. dollar. Their proponents taut their potential to become a widely used “regular medium of exchange.”
Another aspect of President Trump’s effort to make the United States the “crypto capital of the planet” is his pledge to have all “the remaining Bitcoin” be “made in the U.S.A,” reaffirming that he wants cryptocurrencies to “be mined, minted and made in the U.S.A.” Currently, about 37 percent of Bitcoin mining occurs in the United States while 21 percent occurs China, even though China banned bitcoin mining in 2021. President Trump’s goal is intricately tied to energy policy, as he wants the U.S. to be “energy dominant.” This may translate into energy incentives or reduced regulatory hurdles for energy usage and infrastructure.
Furthermore, some cryptocurrency market leaders are also advocating a U.S. Bitcoin reserve. On July 31, 2024, Senator Cynthia Lummis (R-Wyo.) introduced the Bitcoin Act of 2024. The Act would create a strategic Bitcoin reserve, analogous to a petroleum reserve, by committing the U.S. government to purchase one million Bitcoins—about five percent of the total Bitcoin circulating supply—over five years.
The changes the Trump Administration has proposed could reshape the cryptocurrency landscape in the United States. A clearer regulatory framework with decreased risk of litigation, economic incentives for digital assets through tax or energy policy, and direct government purchasing of digital assets could potentially lead to increased adoption and innovation in blockchain technology.
Increased regulation of digital assets could decrease the risk of these investments both to cryptocurrency companies—which may be less fearful of agency enforcement—and to investors. It is even possible that cryptocurrency may gain institutional adoption in the financial sector, with banks and hedge funds potentially developing their own digital assets making digital assets widely available to a much wider audience.
In recent years, a slew of digital asset companies left the United States, fleeing what they perceived as an unwelcoming regulatory climate and taking American talent with them abroad. A regulatory shift—and the broader change in government attitude the Trump Administration presents—could entice American professionals to move back and develop blockchain technologies in the United States.
