Joe Biden and Donald Trump aren't proponents of cryptocurrency

President Joe Biden's approach to cryptocurrency hasn't been notably friendly; rather, it resembles that of his predecessor.

As the presidential campaign season intensifies with November looming closer, there's a palpable buzz surrounding Former President Donald Trump's recent endorsements of cryptocurrency. Amidst this fervor, it's worth examining how Trump stacks up against the current administration led by President Joe Biden. While the two leaders often stand at opposite ends of the spectrum on various issues, cryptocurrency seems to be an area of potential convergence.

While Biden hasn't exactly endeared himself to the cryptocurrency community, his stance on the matter has largely been one of ambiguity. Apart from an executive order mandating research on cryptocurrency and a tweet highlighting concerns about ambiguous tax regulations benefiting affluent crypto investors, Biden himself has remained relatively silent on the subject. However, the friction between the administration and the cryptocurrency sphere has primarily been fueled by Biden's team.

In February 2023, alarm bells rang as reports suggested the revival of Operation Choke Point—a policy from the Obama era—under the Biden administration, aiming to ostracize cryptocurrency-related entities from traditional financial channels. Government officials were evidently exerting pressure on banks to sever ties with the cryptocurrency sector, as documented by Nic Carter at the time.

Following this, former Biden administration advisor Daleep Singh disclosed his efforts to advocate for the introduction of a central bank digital currency (CBDC), citing intentions to "crowd out the ecosystem of crypto."

Subsequently, in May 2023 (and reiterated in March 2024), the Biden administration proposed a 30 percent tax on cryptocurrency miners' energy consumption. Despite the White House Council of Economic Advisors framing it as a measure to hold firms accountable for societal harms, critics pointed out its potential to disproportionately target miners, regardless of their energy sourcing, potentially crippling their operations rather than fostering environmental sustainability.

In recent developments, the Energy Information Administration has wielded its emergency authorities to compel compliance from cryptocurrency miners regarding information requests. While the agency eventually rescinded the mandatory collection, this action occurred only after facing legal action and a temporary restraining order issued by a judge.

Over the past few years, the Securities and Exchange Commission (SEC) has been active in issuing regulations and pursuing enforcement actions. At one juncture, SEC Chairman Gary Gensler hinted at a stringent stance, suggesting that "everything other than Bitcoin" could come under scrutiny. This approach, as described by my colleagues Jennifer Schulp and Jack Solowey, has been criticized as illogical and unreasonable. They caution against allowing the SEC to obstruct Americans' engagement with and exploration of a new technological frontier.

Given the adversarial stance taken by regulatory bodies, it's unsurprising that many are seeking change. However, does Donald Trump truly offer a distinct alternative?

Trump appears to have acknowledged public discontent and made gestures to placate cryptocurrency enthusiasts. For instance, he expressed excitement about cryptocurrency transactions for his merchandise sales and indicated hesitancy about restricting their usage. Notably, it was revealed last year that Trump holds a significant amount of cryptocurrency, approximately $2.8 million.

Nevertheless, Trump's views diverge from those of a libertarian or a maximalist. He has advocated for some degree of regulation, stating in February that regulation is likely necessary for Bitcoin. Additionally, he has emphasized the importance of maintaining the dollar's supremacy, hinting at employing various measures, including trade restrictions or even military intervention, to enforce its dominance. This sentiment echoes his earlier remarks in 2021, where he advocated for heavy regulation of cryptocurrencies to safeguard the dollar's position.

During his presidency, Trump's stance was even more antagonistic. In a 2019 tweet, he expressed disdain for Bitcoin and other cryptocurrencies, dismissing them as lacking intrinsic value and potentially facilitating illicit activities. He advocated for stringent regulation, equating companies seeking to create cryptocurrencies with banks and endorsing measures to control their operations.

In summary, Trump has decisively advocated for heightened restrictions on currency competition, bolstered financial surveillance measures, and amplified regulatory requirements.

Regarding policy positions within governmental agencies, the landscape appeared varied, partly due to the burgeoning integration of cryptocurrency into mainstream discourse.

During Stephen Mnuchin's tenure as Treasury Secretary, the Financial Crimes Enforcement Network introduced the contentious wallet rule, aiming to enhance financial surveillance and gather data on cryptocurrency users. Though not as pronounced as Gary Gensler's tenure at the SEC, Jay Clayton oversaw the initiation of 57 cases against cryptocurrency-related entities.

Nonetheless, key figures within the administration adopted more nuanced perspectives, advocating for prudence. Mark Calabria, then-chief economist for Vice President Mike Pence, emphasized an open-minded approach, while Acting Comptroller of the Currency Brian Brooks championed cryptocurrency and advocated for reform. Similarly, Consumer Financial Protection Bureau Acting Director Mick Mulvaney cautioned against excessive regulation, citing potential negative impacts on market participation.

While these examples are not exhaustive, they offer insight into the respective positions of Biden and Trump on cryptocurrency. Trump's track record may marginally outshine Biden's concerning cryptocurrency matters, yet neither president emerges as a staunch "crypto champion." Rather, the choice appears to hinge once more on determining the lesser of two perceived regulatory burdens.