Crypto Industry at Crossroads as White House Support Grows
The cryptocurrency industry is navigating a new reality under the Trump administration, where it is receiving an unprecedented level of support. After years of criticizing a hostile regulatory environment, crypto companies are now being courted by the White House. The Securities and Exchange Commission (SEC) has dropped several enforcement cases against crypto companies and is hosting public roundtables to discuss regulation.
Eswar Prasad, a Cornell University professor of international trade, shared his insights on the industry’s prospects in an interview with CNN Business’ Nightcap. Prasad noted that while blockchain technology has potential, the current state of crypto is not the solution to the inefficiencies in traditional financial systems. “Blockchain is certainly a remarkable technology,” Prasad said. “But it’s not entirely obvious you really need blockchain technology for all of this — there are other ways of accomplishing the same thing.”
The industry is divided, with some companies seeking regulatory clarity and others embracing more fringe elements like memecoins. Prasad expressed concerns that the administration’s embrace of these less savory aspects could undermine the industry’s legitimacy. “Some of Trump’s actions, like the issuance of the memecoin, are focusing attention on the seedier and less savory sides of crypto, thereby calling into question that very legitimacy,” he said.
The proposed strategic reserve of cryptocurrencies has also raised questions. Prasad argued that it is “neither strategic nor sensible” and would primarily benefit current holders of crypto and promoters, rather than taxpayers. “If you have a big player like the government starting to sell even a modest portion of its holdings, the price of the cryptos will almost certainly tank,” he warned.
As the crypto industry continues to evolve, experts like Prasad urge caution and careful consideration of the potential consequences of government involvement.
