Regulation
Battle lines drawn: Trump argues for crypto while Biden seeks to regulate industry
(Kitco News) – The 2024 presidential race is starting to heat up, with President Joe Biden and former President Donald Trump stepping up their public appearances as they try to attract undecided voters – and crypto s announced as a key issue of the campaign.
On the pro-crypto side is Trump, who has lamented crypto companies fleeing the U.S. market for more welcoming jurisdictions, which he sees as long-term harm.
“Crypto is leaving the US due to hostility towards crypto,” Trump said during an event he hosted Wednesday at his home in Florida for a group of non-fungible token (NFT) enthusiasts. “We’re going to stop it because I don’t want this. If we’re going to accept it, we have to leave them here.”
He used the opportunity to present himself as pro-crypto, as opposed to the U.S. Securities and Exchange Commission (SEC) and Democrats, whom he described as decidedly anti-crypto.
“Gensler is totally against it. Democrats are strongly opposed to it. [but] It’s okay with me; I want to make sure it’s good and solid and everything else, but I’m OK with that,” Trump said.
He also took credit for the recovery of the NFT market, affirming that his Mugshot NFTs and other collections “made NFTs hot again” at a time when the NFT market was stuck in the doldrums.
Trump also attacked Joe Biden-related meme coin Jeo Boden (BODEN), which currently has a market cap of $217 million after hitting a high of $655 million on April 10.
“That’s a lot of money for a coin; I don’t like this investment,” he says said.
On the other side of the spectrum is President Biden, who has specifically targeted the crypto industry in various proposals, including the reintroduction in March of a controversial proposal to impose a 30% excise tax on the cost of electricity used for Bitcoin mining.
The Digital Asset Mining Energy Tax (DAME) has been widely lambasted by industry professionals, who say it could push U.S.-based Bitcoin miners like RIOT Platforms and Marathon Digital Holdings to more welcoming jurisdictions, like Trump’s comments brought it up.
“A proposed 30% punitive tax on digital asset mining would destroy any foothold the industry has in America,” tweeted Wyoming Republican Senator Cynthia Lummis. “I will not let President Biden force the demise of the digital assets industry.”
Independent presidential candidate Robert F. Kennedy Jr. also opposed the proposal, Tweeter“Cryptocurrencies, dominated by bitcoin, along with other cryptographic technologies, are a major driver of innovation. It is a mistake for the U.S. government to hinder industry and spur innovation elsewhere. Biden’s proposed 30% tax on cryptocurrency mining is a bad idea.”
“Just as a biodiverse ecosystem is a resilient ecosystem, our economy will also be more resilient if it has a diverse ecology of currencies, not just a single centrally controlled currency,” he said . added. “Today we see how fragile our overly centralized system is. »
Biden further showed which side of the crypto camp he is on by promising to veto HJ Res. 109, a resolution approved Wednesday by the U.S. House of Representatives that rejects SEC cryptocurrency accounting guidance that the industry says has dissuaded banks from servicing crypto clients.
The SEC’s Staff Accounting Bulletin No. 121 – also known as SAB 121 – was designed to help clarify the accounting treatment of crypto assets, by directing banks holding a customer’s digital tokens to do so in their own balance sheet, which could lead to massive capital expenditures.
A review of the bulletin by the Government Accountability Office (GAO) determined that the agency should have handled it as a matter of course, with full public comment and submission to Congress.
“SAB 121 was issued in response to demonstrated technological, legal and regulatory risks that caused substantial losses to consumers,” Biden said in a statement. statementadding that he “strongly opposes” any disruption of the SEC’s work on this topic.
“By invoking the Congressional Review Act, it could also inappropriately restrict the SEC’s ability to ensure appropriate safeguards and address future issues related to cryptoassets, including financial stability,” the statement said. “Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce significant financial instability and uncertainty into the market.” If the President were to receive HJ Res. 109, he would veto it.
Despite this statement, the House voted strongly in favor of the resolution, with 21 Democrats joining Republicans in passing the measure.
With so much attention given to the crypto industry in Congress and the SEC, the topic is shaping up to be an influential platform in the upcoming elections amid growing awareness of digital assets following the launch of several spot Bitcoin exchange-traded funds (ETFs). in the USA
According to a Tuesday note from Geoffrey Kendrick, a digital assets researcher at Standard Chartered, a Trump administration would be more welcoming and less strict on Bitcoin and crypto than another Biden term would be.
“While Biden administration officials have taken a relatively tough stance on digital assets, Trump said in a March interview that if elected, he would not crack down on Bitcoin or other digital assets,” a writes Kendrick.
He added that Trump would also support a more positive regulatory environment and said the risk of US fiscal dominance with the Fed’s monetization of government debt was increasing, which supports alternative assets like crypto.
“We believe that a second Trump administration would be positive overall due to a more favorable regulatory environment,” the report said. “In a scenario of US fiscal dominance, we believe Bitcoin would be a good hedge against dedollarization and declining confidence in the US Treasury market.”
Kendrick added that U.S. fiscal dominance would likely have three effects on the U.S. Treasury curve: “a steeper 2-year/10-year nominal curve, an increase in breakevens greater than real yields, and an increase in the term premium.” “.
He noted that the price of Bitcoin had a positive correlation with these three potential developments.
Kendrick also warned that if Trump wins the election, a second administration could accelerate the withdrawal of foreign official buyers from the U.S. Treasury due to budgetary concerns, pointing out that during his first term, the average annual net sale of government debt American was 207 billion dollars per year. per year, compared to just $55 billion under Biden’s presidency.
“In addition to the passive boost provided to BTC by dedollarization, we expect a second Trump administration to actively support BTC (and digital assets in general) through looser regulation and the approval of ETFs at the American cash,” he said.
The report concludes by reiterating Standard Chartered’s year-end Bitcoin forecast, with the bank expecting a price of $150,000 in 2024 and $200,000 by the end of 2025, and in noting that Trump’s import tariffs would cause “several large reserve managers to buy.” BTC in 2025.”
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