As Donald Trump prepares to begin his next presidency on January 20, 2025, the cryptocurrency industry is watching closely, anticipating the potential impact of his administration’s policies. Industry leaders predict that the President-elect may issue several crypto-related executive orders on his first day, with at least one potentially causing a surge in Bitcoin’s price.
College of Computing experts—Associate Professor and blockchain consultant Vassilis Zikas and Ph.D. student Agam Shah—discuss implications for the blockchain and cryptocurrency ecosystem.
A New Era for Blockchain Technology
Associate Professor Zikas emphasizes the fundamental distinctions between the blockchain and the standard architecture used by traditional financial institutions like banks. Traditional banks depend on private ledgers maintained by centralized entities. Blockchain, however, utilizes decentralized ledgers, to which all participants have access. According to Zikas, this transparency presents both advantages and disadvantages: it enhances accountability but raises concerns about privacy.
Zikas highlights the potential of blockchain to revolutionize global financial transactions by offering a consistent, borderless mechanism for transferring assets. “The process of sending bitcoin from a U.S.-based user to a U.K.-based user is identical to transferring bitcoin domestically,” he explains. This contrasts sharply with traditional international banking, which is characterized by delays and fees.
The associate professor also notes that Trump’s previous administration had a nuanced stance on crypto. While cautious, it supported regulating initial coin offerings and funding blockchain research. In contrast, the Biden administration’s approach, spearheaded by the Securities and Exchange Commission, created uncertainty in the crypto space and is believed to have pushed crypto entrepreneurship out of the U.S. and into a prolonged “crypto winter.”
Building a Regulatory Framework
Agam Shah, a blockchain researcher, emphasizes that clear regulations are crucial for increasing crypto adoption. “A well-structured regulatory framework can encourage institutional participation by reducing uncertainties and risks while protecting retail investors,” he says.
He highlights the damage caused by unregulated practices, such as wash trading—selling a security at a loss and buying a “substantially identical” security within 30 days. High-profile failures like the cryptocurrency exchange FTX eroded public trust, leading to significant losses for many users. Shah believes that the Trump administration’s positive sentiment toward bitcoin, combined with its pro-crypto stance, could establish a foundation for comprehensive policies that stimulate innovation while protecting investors.
Shah also points to advancements in blockchain technology, such as tools to detect fraudulent activities, as critical to maintaining market integrity. “Technological developments will play a pivotal role in ensuring transparency and fairness in the crypto space,” he adds.
Navigating Challenges and Opportunities
Despite optimism surrounding expected policies, Zikas and Shah advocate a cautious approach. Zikas stresses the need for users and policymakers to learn the reach and limits of the technology. For example, while blockchain can offer privacy benefits, common blockchain ledgers are not completely immune to techniques that can uncover identities. He also notes that, although absolute privacy is technologically feasible, it can facilitate illicit activities. Shah, meanwhile, stresses the importance of balancing innovation with market stability, especially considering the crypto market’s volatility and the challenges posed by Basel III endgame—the latest update to global capital standards—set to take effect in 2025.
Looking to the future, both Zikas and Shah agree that clear and actionable policies will be essential for positioning the U.S. as a global leader in blockchain technology. As Trump’s administration aims to transform the U.S. into a crypto powerhouse, the coming months will be critical in forming the future of digital assets and blockchain innovation.
By fostering a balanced approach that combines regulatory clarity with technological innovation, the U.S. could secure its leadership in the global crypto economy—while also ensuring a transparent and secure ecosystem.
