Forbes: How Trump's Bitcoin Policy Makes the U.S. a Global Crypto Hub

Trump's crypto policy follows the light-regulatory model of Singapore and Dubai.

Original article: How Trump's Bitcoin Policies Are Making The US A Crypto Superpower

By Leigh Cuen , Forbes

Compiled by: Luffy, Foresight News

Cover: Photo by Steve Harvey on Unsplash

Trump is overhauling cryptocurrency regulation, updating tax policy, and embarking on a national Bitcoin reserve strategy, putting the United States on a path to become the first G7 economy to fully embrace cryptocurrency.

"Trump's second administration is already reshaping the U.S. cryptocurrency landscape," Forbes writer Sandy Carter wrote.

Small countries like El Salvador have attracted Bitcoin businesses by building strategic Bitcoin reserves and crypto-friendly policies. The International Monetary Fund (IMF) recently restricted El Salvador’s future Bitcoin purchases, but it has accumulated about 6,101 Bitcoins as a strategic reserve. Tether, one of the world’s most profitable crypto companies, has also reportedly moved its headquarters to El Salvador.

Similar to El Salvador’s President Bukele, Trump appealed to crypto voters during his 2024 campaign. Last July, he made a splashy promise to an enthusiastic crypto crowd at the Nashville Bitcoin Conference.

Susie Violet Ward, a Forbes writer who attended the meeting, wrote that Trump said "the United States will become a 'bitcoin mining powerhouse' and urged supporters to never sell their bitcoin."

“The combination of political resolve and financial innovation marks a defining moment in the Trump era and also means that Bitcoin is gaining wider acceptance in mainstream politics,” wrote Susie Violet Ward.

While Trump’s erratic tariff policies have caused market turmoil, his crypto-friendly policies have helped Bitcoin prices avoid falling below the previous cycle’s high of around $73,000. The relative stability of cryptocurrency prices may be partly due to the U.S. government’s new, softer regulatory stance.

Trump’s crypto policy follows Singapore and Dubai’s light-regulatory model

Singapore has built its reputation as a crypto hub by avoiding complex regulation, even without having to build a strategic reserve of Bitcoin, writes Zennon Kapron, a Singapore-based fintech writer and director of the Asian Securities Industry and Financial Markets Association.

“The influx of crypto companies into Singapore has less to do with any specific measures the country has taken than with what it hasn’t banned,” Kapron said.

He added that through its minimalist regulatory approach, Singapore could become the world’s third-largest blockchain investment hub by 2023, behind only the United States and the United Kingdom.

Trump saw the rapid rise of Singapore with a light-regulatory model and established a similar regulatory framework in his own government. This relatively laissez-faire strategy is closer to the hands-off policies enjoyed by crypto investors in other regions such as the Cayman Islands and Hong Kong. Along these lines, Trump signed HJ Res. 25 on April 10, simplifying the previously complex (and sometimes operationally impossible) tax paperwork for decentralized finance (DeFi) brokers.

“Taxpayers must know when they purchased cryptocurrencies, how much they paid, and what they received,” explained Robert Woods, a Forbes tax writer. “This may be simple for stocks and real estate, but it can be much more complicated for cryptocurrencies. Many crypto investors make multiple purchases at different times and over many years.”

While crypto users and companies are still required to report taxable events, simplifying the paperwork makes it easier for Americans to comply with the law. The new tax guidance comes after the Office of the Comptroller of the Currency sent a letter in March rescinding guidance that made it difficult for banks and thrifts to offer crypto services.

Earlier this month, a U.S. Department of Justice memo revealed that the government has disbanded its team of prosecutors focused on crypto companies. Forbes contributor Andrea Tinianow wrote that the Justice Department’s shift could have a positive impact on pending court cases related to crypto privacy tools like Tornado Cash, which will determine “whether developers should be held criminally liable for open source code used by others to commit financial crimes.” According to the memo sent by U.S. Deputy Attorney General Todd Blanche, law enforcement will no longer act as a “digital asset regulator” who “regulates through prosecution,” but will instead focus on cracking down on “bad actors.”

The memo states: "The Department of Justice will no longer target virtual currency exchanges, coin mixing services, and offline wallets for their end-user actions or unintentional violations." In short, the Department of Justice will not hold developers who develop encryption tools and tax-paying companies that provide legal encryption services accountable. The Trump administration hopes that the government will no longer intervene in the encryption industry.

“The move is intended to reduce regulatory burdens, encourage responsible innovation, and ensure that banking activities are treated consistently regardless of whether the underlying technology involves blockchain,” wrote Forbes tax contributor Joshua Smeltzer.

This may be inspired by smaller countries that have taken a more relaxed approach to crypto regulation. Dubai lawyer and Forbes contributor Irina Heaver wrote that hundreds of crypto companies have flocked to the UAE, which is regulated by Dubai's DMCC. They now contribute 7% of the UAE's gross domestic product (GDP).

“Regulatory clarity is a cornerstone of Dubai’s success as a crypto hub,” Heaver wrote.

Bitcoin Mining Dominance

Trump has made no secret of his reasons for clearing obstacles for the crypto industry: to bring high-paying jobs and dominance in crypto mining to the United States.

According to the Cambridge Bitcoin Electricity Consumption Index, the most powerful crypto mining companies in 2022 are from China or Russia. Since then, dozens of companies have moved to Texas, but the shift has stalled under the Biden administration.

Trump’s second term now coincides with a four-year bull run in the crypto market; bitcoin prices have risen nearly 30% since Trump’s victory six months ago.

Abubakar Nur Khalil, a Forbes contributor, Bitcoin Core developer and venture capitalist, wrote: "Bitcoin prices have risen significantly in each halving cycle, whether in the year of the halving or two years later. Unlike previous halvings, investors can now use a growing number of financial tools and methods to capture Bitcoin's price movements, from directly buying Bitcoin, shares of Bitcoin mining companies or shares of public companies that hold Bitcoin on their balance sheets, to Bitcoin ETFs."

Legal experts such as Tonya Evans, a former professor at Pennsylvania State University Dickinson School of Law and a Forbes contributor, have also pointed out how the Trump family has allowed themselves to personally benefit from crypto projects, an unprecedented move by a sitting president. In addition to various Altcoin companies, Eric Trump and Donald Trump Jr. announced their new Bitcoin mining venture, American Bitcoin, earlier this month.

Bipartisan Support for Strategic Crypto Reserves

So far, Trump’s Bitcoin reserve strategy appears to have bipartisan support. Forbes contributor Sam Lyman describes California Rep. Ro Khanna as “an important voice in the Democratic caucus on crypto issues,” while Alabama Democratic Rep. Shomari Figures and Arizona Democratic Rep. Yassamin Ansari have also made public statements indicating possible support for the strategy. Ansari promised that she would “lead the way in blockchain and crypto innovation.”

In addition, 14 Democrats, including New York Congressman Ritchie Torres, wrote to the chairman of the Democratic National Committee last year, asking the party to "take a forward-looking attitude towards digital assets and blockchain technology." Even Trump expressed in March that he hopes to include riskier assets such as ETH, ADA and XRP in strategic crypto reserves.

In addition to welcoming bitcoin mining companies, holding various cryptocurrencies in strategic reserves, and suspending enforcement actions against small industry players, the Trump administration has also tapped into bipartisan interest in protecting dollar-denominated stablecoins. If the world's popular crypto assets continue to be pegged to the dollar, this could indirectly benefit the U.S. economy.

“The recent 13-hour marathon revision of the Stablecoin Transparency and Accountability for a Better Ledger Economy Act may be a sign that longer bipartisanship is needed,” said Cleve Mesidor, executive director of the Blockchain Foundation and a Forbes contributor.

It’s too early to tell whether these policies will attract new companies to the U.S., but industry giants like Coinbase CEO Brian Armstrong are now criticizing the previous administration, preferring the Trump administration’s policies. Many crypto companies, including Coinbase, Kraken, Ripple, Robinhood, and Circle, also donated to Trump’s inaugural committee. Shortly after Ripple’s donation, U.S. regulators dropped legal charges against the company related to XRP, and the Trump administration also included XRP in its strategic reserve plan.

The Future of U.S. Crypto and Bitcoin Price Trends

Bipartisan efforts to ease regulations and build a strategic reserve of crypto assets appear to be insulating the cryptocurrency market from the turmoil on Wall Street, with bitcoin’s current price action more stable than that of the U.S. stock market.

The current halving cycle may end in early 2026, and the Trump administration’s policies may further affect the Bitcoin market. This includes the normalization of conflicts of interest. The Trump family is now actively involved in the crypto business, as well as the reallocation of law enforcement resources and the pardon of Bitcoin “veterans” such as Silk Road founder Ross Ulbricht and BitMEX exchange founders Arthur Hayes, Benjamin Delo, Samuel Reed and Gregory Dwyer.

Going forward, doing crypto business in the U.S. may involve fewer legal risks.

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