How Would Donald Trump Make the US the "Crypto Capital"?

Making the United States the “crypto capital of the planet” is Donald Trump’s latest promise on his run for another shot at the White House since he took a pro-crypto stance. Since his official announcement on X on 29 August 2024, the news immediately made headlines worldwide.

But amidst all of this, there have been few thorough discussions or predictions on how the “orange-pilled” Trump can fulfill that ambitious promise. This article will try to elucidate what the former President means with his latest crypto statement and make a wild guess on what his blueprint is.

Overview Of Trump’s Latest Crypto Promise

On 29 August 2024, Donald Trump made a post on X, delivering a bold promise to not only his 90 million followers on the platform but also his supporters nationwide.

The video with his voiceover asserts that he will make the United States the “crypto capital of the planet” and declare to protect everyone from an ambiguous pronoun “they” (presumably the Federal Reserve and the centralized financial system).

Along with the shared video, Trump also tagged a verified X account with nearly 50,000 followers, known as “worldlibertyfi” (or WLFI). This initiative, which was extensively promoted by Trump’s sons, is a rebranding effort from Donald Trump’s original crypto project called “The DeFiant Ones”.

WLFI, or World Liberty Financial, aims to foster a new DeFi-based banking system that would circumvent established financial infrastructures, giving individuals more control over their financial operations.

How Can a Nation Become the “Crypto Capital of the World”?

The world is holding its breath for Trump’s blueprint on how to make the US the “crypto capital”. But before that, the more important question is what exactly it takes for a country to do that? Below are the top three factors that a nation vying for such a coveted title should focus on:

#1: Favorable Regulatory Framework

A crypto-friendly regulatory framework should offer legal clarity for companies, safeguard consumers, and promote the development of blockchain technology while mitigating risks like money laundering and fraud.

Moreover, a progressive regulatory framework that adapts to the fast-paced nature of the cryptocurrency sector is vital. This encompasses fostering the development of innovative business models, encouraging fair competition, and protecting investors.

#2: High Adoption Rates

Widespread adoption of cryptocurrencies across numerous industries is a clear sign of a crypto capital, reflecting public confidence in cryptocurrencies. This includes individuals using crypto for everyday transactions, businesses accepting crypto payments, and institutional investors allocating capital to digital assets.

To boost adoption, governments should promote financial inclusion and educate the public on cryptocurrencies' benefits and risks. Encouraging companies to use crypto payment solutions and simplifying access to crypto-related financial services can also contribute to broader acceptance.

#3: Robust Technological Infrastructure

Crypto capital requires a solid technical base, including widespread and reliable internet connectivity, modern payment systems, and the infrastructure required to support blockchain-related enterprises. A skilled workforce with expertise in blockchain technology and cryptocurrency is also critical.

To enhance this tech infrastructure, governments should actively engage in building a favorable climate for cryptocurrency firms to grow, especially in the energy sector. Collaborations with educational institutions and business partners also help create a talent pool capable of driving the crypto revolution.

How Would Trump Fulfill His Crypto Promise?

To begin, let’s base on the three factors above and analyze where the US is on its path to achieving the prestigious “crypto capital” title:

• Regulatory framework: Crypto regulation in the United States is fragmented, with numerous agencies including the SEC (Securities and Exchange Commission), CFTC (Commodity Futures Trading Commission), FinCEN (Financial Crimes Enforcement Network), and IRS (Internal Revenue Service). While this protects investors and combats illicit activities, regulatory uncertainty, overlapping jurisdictions, and potential overregulation might hinder innovation.
• Crypto adoption rate: According to the Henley Crypto Adoption Index 2024, the US is currently ranked 4th in mass adoption of crypto, indicating a notable level of public interest since 15% of the population owns cryptocurrency. Yet, the potential is still high, assuming there are many aspects the country can improve with its jurisdictions.
• Technological infrastructure: The United States boasts a high density of cryptocurrency ATMs and crypto-friendly banks, making it easier to obtain digital assets. The number of companies that accept cryptocurrency payments is also rapidly expanding. However, concerns related to energy and SAB 121 (Staff Accounting Bulletin No. 121) create unnecessary burdens for businesses engaging with crypto, potentially deterring them from offering crypto-related services.

Prediction on Trump’s Actions

It is amazing to witness Trump’s shift from opposing cryptocurrency during his tenure in the White House to now fully supporting it. Since his announcement to run for the second administration in May, the former President has conducted numerous pro-crypto actions, including accepting donations in crypto and attending a Bitcoin conference in Nashville.

Details on how Trump plans to make the US the “crypto capital” have not been disclosed yet. However, here are some potential initiatives he might carry out if he is reelected:

• Building a Bitcoin strategic reserve: This plan was briefly shared during his speech at the 2024 Bitcoin Conference in Nashville. Trump planned to build this strategic Bitcoin reserve by maintaining the current crypto holdings that the US has acquired through the seizure of assets from financial criminals.
• Urging the Fed to cut interest rates: Declared at an annual convention in Chicago last July, the Republican presidential nominee pledged to “bring interest rates way down”. Yet, how he intends to do it is unclear, as setting interest rates is the Fed's job, not the president’s, and the Fed functions independently of the White House. One possibility is that Trump, if reelected, would appoint a new Chair of the Federal Reserve when Powell’s term ends in 2026.
• Subsidizing Bitcoin mining: Another potential move from Trump is to make sure all remaining Bitcoins are mined in the United States. He clearly expressed this idea during his meeting with Bitcoin miners in June, where he also stated that it would help the US to be more energy-dominant and fight against the idea of a Central Bank Digital Currency (CBDC) like the “digital dollar”.
• Supporting DeFi: As mentioned above, Trump’s latest action includes his endorsement for World Liberty Financials. According to its white paper, the project will support decentralized lending and borrowing, based on the Ethereum blockchain and the DeFi platform Aave. It also entails a governance token called WLFI. This robust DeFi support seems to be Trump’s weapon against the Fed and the established banking sector.

Is turning the US into a “crypto capital” a realistic promise or just a political way that Trump leverages to squeeze more support from pro-crypto voters? Time will tell. But one thing is certain: Cryptocurrency is here to stay and will continue to develop further in the future.

Therefore, you should be prepared to stay ahead of the curve. During that journey, you will need a reliable companion. Bitget Wallet is exactly what you warrant, as it is a secure and easy-to-use option to help you navigate safely in the volatile crypto realm.

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