During the World Economic Forum annual meeting in Davos, Switzerland, Coinbase CEO Brian Armstrong expressed optimism about the future of cryptocurrency investment under a potential second term for Donald Trump. Armstrong suggested that Trump’s stance on crypto, particularly his stated intention to be the “first crypto president,” would attract significant investment to the sector.
“The Trump effect cannot be denied here. To have the leader of the largest GDP country in the world come out undeniably and say that he wants to be the first crypto president… This is unprecedented,” Armstrong stated.
However, Armstrong’s enthusiasm was tempered by criticism from Lesetja Kganyago, the Governor of the South African Reserve Bank, who also participated in the Davos panel. Kganyago voiced concerns regarding the cryptocurrency industry’s lobbying efforts in the United States and questioned the rationale behind the idea of governments holding Bitcoin reserves, drawing comparisons to commodities like beef or apples.
“I would have a significant problem with a lobby that says governments should hold this asset or hold that asset,” Kganyago said. “There is a history to gold. There was once a gold standard… If we now say ok, bitcoins. What about platinum? What about coal? Why don’t we hold strategic beef reserves, or mutton reserves, or apple reserves? Why Bitcoin?”
Kganyago also criticized what he perceived as the crypto industry’s attempts to influence financial regulation, raising concerns about the potential for “regulatory capture.” He pointed out that the cryptocurrency industry has invested heavily in supporting pro-crypto candidates, hoping to influence the passage of favorable legislation.
“If regulation is going to be established through the power of money, then we have a problem,” Kganyago said.
In response to Kganyago’s comments, Armstrong defended the role of pro-crypto groups in the U.S. political process, describing it as “democracy working.” Jennifer Johnson, CEO of Franklin Templeton, acknowledged the rapid growth of the cryptocurrency market, noting the need for regulatory clarity to boost confidence.
Crypto investors are waiting to see if Trump will introduce plans for a national reserve of Bitcoin after announcing plans to do so in July 2024. The industry’s mood is optimistic, especially when compared to the downturn of 2022, which saw market turmoil and the collapse of major firms like FTX. While Bitcoin’s price cooled following Trump’s inauguration, Armstrong said plans for a bitcoin reserve were still “alive and well.”
