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Battle lines drawn: Trump defends crypto as Biden seeks to regulate the industry
(Kitco News) – The 2024 presidential race is starting to heat up, with President Joe Biden and former President Donald Trump increasing their public appearances as they try to appeal to undecided voters – and encryption is becoming a major campaign issue.
On the pro-crypto side is Trump, who has lamented the fact that crypto companies are fleeing the US market for more welcoming jurisdictions, which he sees as a long-term detriment.
“Crypto is leaving the US because of hostility towards crypto,” Trump he said at an event he hosted at his Florida home on Wednesday for a group of non-fungible token (NFT) enthusiasts. “Let’s stop this because I don’t want this – if we want to accept this, we have to let them stay here.”
He took the opportunity to present himself as pro-crypto, in opposition to the US Securities and Exchange Commission (SEC) and Democrats, whom he painted as decidedly anti-crypto.
“Gensler is totally against it. The Democrats are totally against it, [but] I’m okay with that; I want to make sure it’s good and solid and everything, but I’m fine with it,” Trump said.
He has also been credited with the revival of the NFT market, claiming that his Mugshot NFTs and other collections “made NFTs hot again” at a time when the NFT market was stagnant.
Trump also attacked the meme coin Jeo Boden (BODEN), linked to Joe Biden, which currently has a market value of $217 million after reaching a high of $655 million on April 10.
“That’s a lot of money for a coin; I don’t like this investment,” he he said.
On the opposite side of the spectrum is President Biden, who has specifically targeted the crypto industry in several proposals, including reintroducing in March a controversial proposal to impose a 30% excise tax on the cost of electricity used to mine Bitcoin. .
The Digital Asset Mining Energy (DAME) tax has been widely criticized by industry professionals, who say it could push US-based Bitcoin miners such as RIOT Platforms and Marathon Digital Holdings into more welcoming jurisdictions, as alluded to in comments made by Trump. .
“A proposed 30% punitive tax on digital asset mining would destroy any foothold the industry has in America,” tweeted Wyoming Republican Senator Cynthia Lummis. “I will not let President Biden tax the digital asset industry out of existence.”
Independent presidential candidate Robert F. Kennedy Jr. also resisted the proposal, tweeting, “Cryptocurrencies, led by bitcoin, along with other cryptographic technologies, are an important driver of innovation. It is a mistake for the US government to undermine industry and drive innovation elsewhere. Biden’s proposed 30% tax on cryptocurrency mining is a bad idea.”
“Just as a biodiverse ecosystem is a resilient ecosystem, our economy will be more resilient if it has a diverse ecology of currencies, not just a single, centrally controlled one,” he said. added. “We are seeing today how fragile our excessively centralized system is.”
Biden further showed which side of the crypto camp he is on, promising to veto HJ Res. 109, a resolution passed by the US House of Representatives on Wednesday that rejects SEC cryptocurrency accounting guidance that the industry says has deterred banks of dealing with cryptocurrency clients.
SEC Staff Accounting Bulletin No. 121 – also known as SAB 121 – was designed to help clarify the accounting treatment for crypto assets by directing banks that hold a customer’s digital tokens to do so on their own balance sheet, potentially incurring huge capital expenditures.
A review of the bulletin by the Government Accountability Office (GAO) determined that the agency should have treated it as a rule, with full public comment and submission to Congress.
“SAB 121 was issued in response to proven technological, legal and regulatory risks that have caused substantial losses to consumers,” Biden said in a statement. declarationadding that it “strongly opposes” stopping the SEC’s work on this matter.
“By virtue of invoking the Congressional Review Act, it could also inappropriately restrict the SEC’s ability to ensure appropriate protections and address future issues related to cryptoassets, including financial stability,” the statement said. “Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for cryptoassets would introduce substantial financial instability and uncertainty into the market. If the President were presented with HJ Res. 109, he would veto it.”
Despite the statement, the House voted strongly in favor of the resolution, with 21 Democrats joining Republicans in approving the measure.
With so much focus on the crypto industry in Congress and the SEC, the topic is turning into an influential platform in the upcoming elections amid growing awareness of digital assets following the launch of several spot Bitcoin exchange-traded funds (ETFs). In the USA
According to a Tuesday note from Geoffrey Kendrick, digital asset researcher at Standard Chartered, a Trump administration would be more welcoming and less strict on Bitcoin and crypto than another Biden term would be.
“While Biden administration officials have taken a relatively tough stance on digital assets, Trump said in a March interview that, if elected, he would not crack down on Bitcoin or other digital assets,” Kendrick wrote.
He added that Trump would also support a more positive regulatory environment and said the risk of US fiscal dominance is growing with the Fed’s monetization of government debt, which supports alternative assets like crypto.
“We believe a second Trump administration would be broadly positive through a more favorable regulatory environment,” the report said. “In a scenario of US fiscal dominance, we believe Bitcoin would provide a good hedge against de-dollarization and declining confidence in the US Treasury market.”
Kendrick added that U.S. fiscal dominance would likely have three effects on the U.S. Treasury curve: “a steeper nominal 2-year/10-year curve, a larger increase in break-even points than in real yields, and an increase in the premium deadline”.
He noted that the price of Bitcoin has a positive correlation with all three of these potential developments.
Kendrick also warned that if Trump won the election, a second administration could accelerate the withdrawal of official foreign buyers from the US Treasury due to fiscal concerns, highlighting that in his first term, the average annual net sale of US government debt was 207 billion dollars per year. year versus just $55 billion under Biden’s presidency.
“In addition to the passive boost to BTC due to dedollarization, we would expect a second Trump administration to actively support BTC (and digital assets more broadly) through looser regulation and the approval of US spot ETFs,” he said. he.
The report closed by reiterating Standard Chartered’s year-end Bitcoin forecast, with the bank expecting a price of $150,000 in 2024 and $200,000 by the end of 2025, and noting that import tariffs under Trump would lead to “ several large reserve managers buying BTC in 2025.”
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