Why Did Trump Change His Mind on Bitcoin?
“I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated cryptoassets can facilitate unlawful behaviour, including drug trade and other illegal activity.”
Thankfully, the official position of the Republican Party has changed dramatically since President Donald J Trump condemned the emerging crypto industry in those uncompromising terms back in 2019.
Earlier this month, the Republican National Committee adopted an ambitious platform to promote innovation in the US’ digital assets industry and protect the rights of bitcoin holders.
For one, the official platform pledges that the Republicans will “defend the right to mine bitcoin.” This represents a much-needed departure from the policies of the incumbent administration.
In February this year, the US Department of Energy’s Energy Information Administration (EIA) issued an “emergency” survey to bitcoin mining companies, demanding highly sensitive information such as the specifications of the machines being used, the specific locations of their mining operations, and contractual information relating to their commercial energy partners. The EIA not only demanded all of this information but pledged to publish even the most commercially sensitive bits of it.
This initiative represented an unprecedented intrusion into the activities of Bitcoin miners and a massive assault on the crypto industry. It prompted organizations such as the Texas Blockchain Council to launch legal proceedings to try and protect the rights of the crypto industry against federal outreach. The Republicans’ pledge to “defend the right to mine bitcoin” is therefore very welcome.
There are other encouraging pledges that the Republicans have made. The GOP has said they will “ensure every American has the right to self-custody their digital assets and transact free from government surveillance and control.”
They have also come out strongly against the idea of a CBDC. “Republicans will end Democrats’ unlawful and un-American crypto crackdown and oppose the creation of a Central Bank Digital Currency,” the party has said.
Of course, all of this is highly encouraging for digital asset industry advocates. But it still begs the question. What caused President Trump to change his mind and start embracing the massive potential of digital assets and decentralized finance? How has this pro-digital asset agenda vaulted into the limelight of Presidential politics?
If there is one man who has contributed more than anybody else to changing Republicans’ mind on crypto, it is Vivek Ramaswamy. The former Republican presidential candidate and entrepreneur is clearly having increasing amounts of influence on the GOP inner circle. At the Republican Convention this month, Donald Trump Jr joked that he would like Ramaswamy to be his running mate in 2036. Indeed, ever since his presidential bid last year, it is clear that he has been one of the leading voices at the upper echelons of the Republicans guiding the party in a more pro-crypto direction.
Ramaswamy made waves in GOP circles when, at the North American Blockchain Summit in Texas last year, he released a detailed and comprehensive plan for the US crypto space.
What did he pledge to do? Perhaps the most eye-catching measure was his promise to fire most of the employees at the bloated Securities and Exchange Commission (SEC) and order the rest to stop trying to bully the crypto industry. Importantly, Ramaswamy defines many cryptocurrencies like bitcoin as commodities that are therefore not under the jurisdiction of the SEC.
“I think it’s nothing short of embarrassing that Gary Gensler, the current leader of the SEC, in front of Congress could not even say whether Ethereum counted as a regulated security or not,” Ramaswamy said during one of the Republican debates last year. “This is just another example of the administrative state gone too far.”
Ramaswamy has been a vocal advocate for innovation in the crypto space and the use of decentralized digital currencies as a tool for financial freedom. He has argued that the right to code should be a right protected by the First Amendment, protecting developers from the overreaches of federal agencies.
He has also said that consumers should have a right to possess self-hosted digital wallets beyond the grasp of the government. This has now been explicitly adopted by the Republicans for their 2024 election campaign, showing the practical influence Ramaswamy is having on Republican policy.
It is not just Ramaswamy who has been positively influencing Republican policy. Back in May last year, Ron DeSantis, the governor of Florida, brought into force a law banning any potential CBDC being used in the state. The regulation “prohibits the use of a federally adopted CBDC by excluding it from the definition of money within Florida’s Uniform Commercial Code.”
Efforts like this have been essential in making the Republican leadership aware of the dangers associated with CBDCs and prompting them to pledge action.
But arguably the most important impactful of Ramaswamy’s crypto activism is to persuade the broader Republican Party that supporting crypto innovation is in line with their political philosophy and natural instincts.
He has powerfully argued that the current federal assault on the crypto industry is “an embodiment of our national decline” in the way it represents an attack on innovation and entrepreneurship, two values the Republicans have always claimed to hold dear.
Ramaswamy has similarly noted that Bitcoin mining is “a frontier in American innovation” in the same tradition as American heroes such as Thomas Jefferson – who Ramaswamy thinks “would have been a Bitcoin miner.” This rhetoric seems to have worked in convincing President Trump and Republican leaders that they should indeed be the pro-bitcoin party.
Another key emerging figure in the Republican party who is of a similar mind on digital assets as Vivek is Trump’s recent VP pick, J.D. Vance. Senator Vance is vocal about his support for bitcoin and digital assets and has a background in tech venture capital. He is young and he understands the importance of courting younger votes.
So, what will “four more years” of President Trump mean for the US digital asset industry?
Let’s end as we started, with another quote from the President – one that shows, thanks to the efforts of Vivek Ramaswamy, Senator Vance and others, just how much the Republican stance on crypto has changed over the last few years.
“I will end Joe Biden’s war on crypto. We will ensure that the future of crypto and the future of Bitcoin will be made in America.”
This is a guest post by Mark Shut and Lee Bratcher. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
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