The 2024 U.S. election voting has come to an end, and the Trump camp, which is popular in the encryption industry, has declared victory. This election can be regarded as a collective "team building" in the encryption industry. From the strong support of top Web3 projects and companies to the large-scale betting of retail investors on various prediction platforms, it is clear that Trump and his team have been The crypto industry embraces it.

However, if we look back on his first term, attorney Mankiw finds that his relationship with the encryption industry is completely opposite to what it is now. From opposition to support, why is there such an earth-shaking change? There is no other reason. The enemy of my enemy is my friend, not to mention that this friend also proposed a lot of things that are beneficial to the encryption industry.

However, although the promise is beautiful, it also needs to be implemented. So, let’s take a look at what key benefits our crypto president has put forward, and have these begun to advance?

Building a Bitcoin Power

At the Bitcoin Conference in Nashville, Tennessee, in June 2024, Trump dropped a blockbuster to the global cryptocurrency industry: He He promised that if elected, he would promote the United States to become the absolute leader in the global Bitcoin field through a series of measures. This plan starts from two major directions: establishing a strategic Bitcoin reserve and building a Bitcoin mining power. It aims to establish the United States' technological commanding heights in the global digital economy.

Trump plans to use the Bitcoins confiscated by federal law enforcement as initial reserve assets, and to set annual procurement targets through legislation to gradually expand the size of his Bitcoin holdings. This move will not only elevate Bitcoin from a "speculative asset" to a "sovereign reserve asset", but may also trigger a global chain reaction, prompting others to follow suit. At the same time, the signal that the United States directly holds Bitcoin will significantly enhance its legitimacy and liquidity, providing strong support for the internationalization of digital assets.

At the same time, Trump has proposed the goal of making the United States a Bitcoin mining power through support and technological innovation. He plans to cut energy taxes on mining companies and provide tax incentives and special subsidies for companies that use renewable energy to reduce their operating costs. At the same time, the United States will fund the research and development of high-efficiency mining hardware and reduce reliance on overseas supply chains. Through these measures, Trump hopes to combine Bitcoin mining with the green energy revolution and set a sustainable development standard for the global mining industry.

The potential consequences of this series are far-reaching and complex. The establishment of high-level Bitcoin reserves will significantly enhance Bitcoin's status in the global financial system, and the increase in the proportion of computing power will further consolidate the United States' dominant position in the Bitcoin network. At the same time, green mining technology innovation will help the industry cope with environmental criticism and set an environmental benchmark for the global mining industry. However, the centralization of computing power may raise concerns about the decentralized nature of Bitcoin, which is also an issue that needs attention in future implementation.

At present, these plans have begun to take shape. In August, U.S. Senator Cynthia Lummis submitted to CongressThe “Bitcoin Strategic Reserve Act” was passed, recommending the purchase of 200,000 Bitcoins per year and a cumulative total of 1 million Bitcoins within five years. In November, the Pennsylvania House of Representatives introduced the Pennsylvania Bitcoin Strategic Reserve Act, which would allow the state’s Treasury Department to allocate 10% of its approximately $7 billion in state funds to Bitcoin. In addition, Texas took the lead in piloting an energy subsidy program for mining companies, cooperating with a number of companies to use wind and solar energy for mining. At the same time, the Trump team is also promoting federal legislation, trying to pass the "Bitcoin Energy and Technology Innovation Act" to provide legal protection and financial support for the development of green mining technology.

Support the further development of stablecoins

Trump promised to formulate looser support for the development of stablecoins after being elected, aiming to push stablecoins from existing local applications to Wider payment and settlement areas, while accelerating the deep integration of traditional finance and cryptocurrency through improved compliance. He further stated that he would not promote a central bank digital currency (CBDC) issued by the Federal Reserve, believing that CBDC may pose a threat to the innovative spirit of private cryptocurrency and expand control of the financial system.

Trump’s stablecoin will unfold in three directions:

First, he proposes to develop a clearer regulatory framework for stablecoin issuers to reduce the ambiguity and confusion of current laws. Restrictive.

Secondly, he plans to allow stablecoin issuers to directly access the Federal Reserve payment system to shorten settlement time and reduce transaction costs.

Finally, he specifically expressed his hope to optimize international trade payments through stable currency technology and open up a new path for the international status of the US dollar.

In the past two years, other regions in the world have also actively promoted the development of stable currencies. The MiCA regulations passed by the European Union in 2023 set strict capital requirements and transparency standards for stablecoin issuance. Although it ensures the safety of user funds, it also raises the compliance threshold of the industry. Hong Kong is exploring the launch of an official stablecoin to optimize cross-border payments and trade settlements. This officially endorsed stablecoin may become an important payment tool in the Asian market.

In contrast, Trump’s path focuses more on flexibility and market orientation, and further maintains the dominance of private cryptocurrencies in payments and cross-border settlements by supporting private stablecoins to replace the CBDC model. His stance against the Federal Reserve’s issuance of CBDC leaves room for the development of private stablecoins and allows market forces to continue to play a leading role in financial digitization.

Currently, this has shown preliminary signs. In August this year, the U.S. Department of the Treasury, in conjunction with a number of stablecoin issuers, launched the "Payment Stablecoin Supervision Standards Plan" and plans to develop an international stablecoin payment framework within five years. In addition, the Federal Reserve is conducting tests with a number of financial technology companies to explore how stablecoins can reduce transaction friction in cross-border payments. However, some traditional banks still have doubts about the rapid development of stablecoins, believing that they may pose competitive pressure on existing payment networks.

Fire the current SEC Chairman

During the 2024 presidential campaign, Trump repeatedly publicly expressed his dissatisfaction with the current Securities and Exchange Commission (SEC) Chairman Gary Gensler and promised that if elected, Gensler will be fired on his first day in office. He criticized Gensler for being too tough in regulating the encryption industry, saying that this law enforcement attitude stifled the potential of the United States in encryption technology innovation and damaged the country's global competitiveness.

For a long time, the SEC led by Gary Gensler has taken severe legal actions against a number of cryptocurrency exchanges and projects, and has classified crypto assets as securities and adopted strict supervision. Although this attempt to protect investors has also caused great dissatisfaction in the encryption industry, it is believed that excessive regulation has become a major obstacle to innovation. If Trump follows through on this promise, firing Gensler and appointing a more crypto-industry-friendly leader will bring about a significant shift that will help boost industry confidence, attract more capital to flow into the U.S. market, and create opportunities for crypto companies Provide a more favorable business environment and promote the rapid development of the industry.

However, this plan faces legal and political challenges. Under current law, the SEC is an independent agency and its chairman cannot be directly removed by the president unless there is a clear legal basis, such as malfeasance or illegal conduct. However, there is also historical precedent that shows that the leaders of many independent institutions choose to resign when a new president takes office.

In addition, Trump hinted in a tweet on November 10 that he might bypass the traditional Senate confirmation process and directly appoint the next SEC Chairman through a Senate recess appointment. . He also mentioned that he would work with potential Senate majority leaders to push for recess appointments to fill key positions "immediately." Under the U.S. Constitution, recess appointments allow the president to grant temporary appointments while the Senate is not in session, valid until the end of the next Senate session.

Repeal of SAB121

Trump made a clear promise during the campaign that if elected, he would repeal SAB 121, the SEC’s accounting bulletin issued in 2022. The requirements of this announcement are widely considered to be too demanding and have become almost a heavy financial burden for crypto asset custody platforms and exchanges. According to SAB 121, companies are required to treat cryptoassets held for customers as a liability and present an equivalent asset on the balance sheet to reflect the company's responsibility to protect customers' cryptoassets. Although this regulation is intended to improve transparency, it actually greatly expands the company's balance sheet, directly restricts the space for capital operation, and affects the company's development and expansion capabilities.

Trump said that this policy not only burdened companies with unnecessary costs, but also severely restricted the competitiveness of American companies in the encryption field. If SAB 121 is abolished, the financial pressure on enterprises will be greatly relieved, especially custody platforms and exchanges, which will have more flexible capital for technology research and development and business expansion.Thus promoting the development of the entire industry.

Previously, some members of the Republican Party have proposed specific actions on the reform of SAB 121. In September this year, 42 Republican congressmen, led by House Financial Services Committee Chairman Patrick McHenry and Senator Cynthia Lummis, jointly sent a letter to SEC Chairman Gary Gensler demanding the repeal of SAB 121. Although both houses of Congress had previously passed a bill to overturn SAB 121, this bill was vetoed by President Biden in May 2024, stalling the reform process.

As of now, the SEC has not officially responded to these lawmakers’ requests, and SAB 121 is still in effect. However, continued pressure within Congress shows a strong desire to reform cryptocurrency accounting rules, and further legislation or adjustments may be possible in the future.

End "Operation Choke Point 2.0"

Trump made it clear during the campaign that if elected, he would immediately end the "Operation Choke Point 2.0" Regulatory action to ensure that the banking system can provide a level playing field for crypto businesses. He believes that this invisibility has not passed a transparent legislative process and restricted the ability of cryptocurrency companies to access the traditional banking system, which is one of the main reasons hindering the development of the US encryption industry.

"Operation Kill 2.0" is widely regarded by the crypto industry as a hidden suppression by regulators. Its core method is to pressure banks to reduce or interrupt services to cryptocurrency companies. This approach not only puts a large number of crypto companies into financial difficulties, but also directly affects the competitiveness of the United States in the global crypto economy. Therefore, Trump’s commitment to end “Operation Kill 2.0” will not only create a fairer financial environment for the encryption industry, but also restore the market’s trust in the U.S. financial system.

At present, although there is no exact repeal plan, Trump’s statement has won widespread support from the encryption industry. Many practitioners believe that if this can be truly implemented, it will greatly improve the living environment of crypto companies, especially in terms of banking channels and capital flows, and eliminate unfair treatment of the industry.

Mankiw Lawyer Summary

Trump’s victory will undoubtedly inject a shot in the arm into the U.S. and global encryption industry. Whether it is establishing a strategic Bitcoin reserve, supporting the development of stablecoins, or repealing the SEC's SAB 121, these commitments directly address the pain points of the industry and attempt to fundamentally change the regulatory environment of the U.S. crypto industry. However, although these promises are exciting, their implementation path and operability are still unknown. After all, whether these can be carried out smoothly still depends on the complex legislative and administrative system of the United States.

However, these proposals also provide certain reference for the supervision of the global encryption industry, such as how to balance innovation and risk, stable currency and cross-border payment paths. In the context of global economic integration, the choices made by the United States will inevitably have spillover effects on other countries.answer. In particular, the confrontation between stablecoin development and CBDC is likely to become a key area of ​​international financial competition in the future. Countries may need to rethink the balance between international settlements and financial sovereignty.

For us, these changes are both challenges and opportunities. We need to continue to pay attention to the dynamics of international encryption, especially the potential leading role of the United States in formulating industry rules. At the same time, regulatory paths that are in line with international standards should also be actively explored to promote the encryption industry to find a balance between compliance and innovation. In the future, both enterprises and legal service institutions need to face the changes in the global encryption economy with a more open vision and provide support for enterprises to seize emerging markets.