Trump Administration's Crypto Strategy Faces Long Road to Success

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• Trump administration's friendlier approach to digital assets industry
• Lack of immediate policy changes reflects the reality of governing
• Uncertainty on how Trump administration will influence Congress's efforts to pass legislation
• Crypto bills may be pushed later into this year or potentially next year for consideration

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The Challenges of Adopting Cryptocurrency as a National Currency

• Cryptocurrencies' volatility, such as Bitcoin's price swings of up to 50% in a matter of months, makes price stability difficult to maintain, unlike fiat currencies managed by central banks.
• Stablecoins like USDC offer relative stability within the crypto ecosystem, but the government must first address a fundamental question before considering deeper integration into the U.S. financial system: Can it responsibly manage national assets in a way that protects economic stability and public trust?
• Unlike gold or U.S. Treasury bonds, Bitcoin's extreme volatility makes it a speculative reserve asset, potentially exposing public funds to unnecessary risk, and a government-held Bitcoin stockpile could invite market manipulation risks, raising ethical and transparency concerns.

Source

Forbes

The Trump administration's friendlier approach to the digital assets industry

• Trump's recent Truth Social post suggests a friendlier approach to digital assets industry
• The SEC's Division of Corporation Finance and the Office of the Chief Accountant will guide companies wanting to raise money with tokens through initial coin offerings as they do for IPOs
• The CFTC was generally viewed as more crypto-friendly, welcoming bitcoin futures in 2021, well before the bitcoin spot ETFs were approved in January 2024

Source

Business Insider

The role of governing agencies in regulating the digital assets industry

• The protocols by which crypto moves will be the deciding factor in how governing agencies will position their oversights
• The Financial Crimes Enforcement Network (FinCEN) proposes anti-money laundering and counter-terrorism financing regulation, and enforces "Know Your Customer" (KYC) and anti-money laundering (AML) policies and systems
• The Internal Revenue Service (IRS) expects taxes from crypto profits to be paid like any other gains, and categorizes digital assets as either capital gains or ordinary income depending on their use

Source

Business Insider

Possible Crypto-Related Elements in Trump's Tax Renewal

• Expectations of crypto-related elements to be added to the renewal of the Tax Cuts and Jobs Act (TCJA) that expires by the end of 2025
• Possible inclusions are tax exclusions on smaller amounts, further clarity on tax treatment of crypto earned through staking or mining, applying the same wash-sale rules for securities to crypto, and expanding the non-tax treatment to digital assets
• Uncertainty whether Trump's promise not to tax bitcoin will be fulfilled and the need to find another avenue to offset the tax losses from it

Source

Business Insider

Uncertainty in Congress's Role in Crypto Legislation

• The Trump administration's influence on Congress's efforts to pass crypto legislation is uncertain, as it could either push to adjust particular aspects of the bills or play a supporter role without shaping policy.
• Other pressing issues, such as tax reform, immigration, government funding, and confirming nominees, will likely push crypto bills later into this year or potentially next year for consideration.
• Despite the delay, it is worth following key lawmakers and committees for signs of incremental progress toward a consensus on the bill text and how many Democrats may be willing to back the efforts.

Source

Forbes

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