Trump’s Crypto Czar: Laying the Groundwork for a Crypto-Friendly US
A South African entrepreneur with experience at PayPal, a clear pro-crypto stance, and a new top tech job courtesy of Donald Trump: this is David Sacks. As America’s new AI and crypto czar, Sacks moves in similar circles to Elon Musk, and the similarities between the two are notable. While the internet has no shortage of opinions on Musk, this article focuses on Sacks’ next steps now that he has been handed the private keys to America’s crypto kingdom.
In the coming months, the world will get a clearer indication of whether the US is serious about establishing itself as a hub of web3 innovation. The actions of the Trump administration will reveal whether the pro-crypto President is truly committed to change or merely playing to the crowds.
Unpacking Trump’s Crypto Credentials
Before diving into the known unknowns, it’s important to start with what’s already known. Donald Trump wasn’t always a fan of Bitcoin initially, and while he’d initially been relatively slow to grasp the potential of crypto, he has since become an outspoken supporter. He has also shown an eagerness to capitalize on the crypto boom through investments and controversial memecoins launched in his name, as well as that of his wife.
However, it would be cynical to suggest that his decision to appoint a Presidential Working Group on Digital Assets, alongside the SEC’s Crypto Task Force, are solely for the purpose of bolstering his personal financial interests.
Another known element is Trump’s apparent ambition in his second term. He has demonstrated a clear desire to accomplish considerably more than preceding administrations did. He has made good on promises, such as the fulfillment of his campaign commitment to release Ross Ulbricht, the Silk Road founder. This may appear to be a small accomplishment, but it demonstrates his ability to honor commitments, even on the smaller scale.
What, then, about the bigger picture: bringing crypto innovation back to the US?
Bringing the USD Back Home
The unabashed emphasis on America and its interests – frequently combined with protectionist policies – has defined Trump’s initial weeks in office. Broadly speaking, his administration aims to bring everything that’s great about the US back to the USA, from oil production to manufacturing.
Therefore, it’s no coincidence that one of the first tasks for crypto czar David Sacks is to address the matter of stablecoin regulation. A significant irony is that the majority of the world’s stablecoins, are denominated in USD but originate overseas, out of necessity due to policies of the previous administration. It is likely frustrating for US officials that other nations are essentially benefiting from the US dollar’s brand and stability. Even more frustrating is the fact that the issuance of these stablecoins is not primarily controlled and governed by regulators in the United States.
Sacks has already confirmed that stablecoin regulation is among his top priorities. The goal is provide greater regulatory clarity for US businesses. This should enable firms to utilize stablecoins for various forms of payments without fear of legal problems. Senator Bill Hagerty is proposing a bill to provide updated guidance on stablecoins. Sacks has been quick to point out their potential for generating revenue for US-based companies, while also helping to lower interest rates.
At the SEC, Sacks will collaborate with Hester Peirce, whose approach contrasts sharply with Gary Gensler’s. Peirce broadly views crypto as an opportunity and not necessarily a threat. However, she is also committed to protect the investors, a fundamental element of her role. During her stewardship, it appears that the SEC’s definition of investor protection will evolve beyond suing US-based startups. The agency aims to focus on practical steps. These include clear rules that will help in defining a digital asset as a security. This will keep the SEC’s Crypto Task Force busy in the months ahead.
Despite Trump’s often autocratic style of leadership, there are indications that when it comes to crypto regulation, dialogue is the preferred method. Discussions have taken place with US Senators and key crypto figures. These discussions are focused on making the US more crypto friendly, with topics including tax reform, stablecoins, and tokenized assets.
Bitcoin Reserve, A Strategic One
With stablecoin regulation, token classification, and bureaucracy reduction being addressed, and with David Sacks promising major news on the crypto front, there is a sense that the Trump administration has been working quickly to address the most urgent tech-related issues.
During the White House Crypto Summit in early March, President Trump pledged to ease restrictions on cryptocurrency and announced plans for a US Strategic Bitcoin Reserve (SBR). While crypto investors have responded positively to this announcement, expectations need to be tempered. The SBR would require specialist boards and expert committees to determine everything from digital asset composition to custodial arrangements.
While not certain, bold crypto pledges, such as the SBR, may not be as immediately achievable as intended. However, the appointment of figures like Sacks and Peirce indicates the end of the reactionary era of US crypto policy. Common sense crypto has arrived.
