How can the Trump administration change the cryptocurrency landscape?

As Donald Trump prepares to resume the presidency on January 20th, the cryptocurrency industry is abuzz with anticipation over the potential impact of his administration’s policies. According to reports, industry leaders expect President-elect Trump to issue several cryptocurrency-related executive orders on his first day, and at least one is expected to send Bitcoin prices higher. College of Computing Experts – Associate Professor and Blockchain Consultant Vassilis Zikas And Ph.D. student Ajam Shah – Discuss the implications for the blockchain and cryptocurrency ecosystem.

A new era of Blockchain technology
Associate Professor Zikas emphasizes the fundamental differences between blockchain and the common architecture used by traditional financial systems such as banks. While banks rely on private ledgers maintained by centralized entities, blockchain technology uses decentralized ledgers that are accessible by all participants. He explains that this transparency is a double-edged sword: it enhances accountability but raises privacy concerns.

Zikas highlights blockchain’s potential to revolutionize global financial transactions by offering a consistent, borderless mechanism for transferring assets. “The process of sending bitcoin from a US-based user to a UK-based user is identical to the process of transferring bitcoin domestically,” he explains. This is in sharp contrast to traditional international banking, which is full of delays and fees.

The associate professor also points out that the previous Trump administration had a mixed stance on cryptocurrencies. Although cautious, it has supported regulating initial coin offerings and funding blockchain research. In contrast, the position of the Biden administration, led by the SEC, has created uncertainty in the cryptocurrency space and is believed to have contributed to pushing cryptocurrency entrepreneurship out of the United States and into a prolonged “crypto winter.”

Building the regulatory framework
Agam Shah, a blockchain researcher, stresses the importance of clear regulations in boosting cryptocurrency adoption. “A well-structured regulatory framework can encourage institutional participation by reducing uncertainties and risks while protecting individual investors,” he notes.

It highlights the harm caused by unregulated practices, such as wash trading, which occurs when you sell a security at a loss and buy a “substantially identical” security within 30 days before or after the sale. High-profile failures like the FTX cryptocurrency exchange have eroded public trust and caused many users to lose their money. Shah believes the Trump administration’s positive sentiment toward bitcoin, coupled with his administration’s pro-cryptocurrency stance, could lay the foundation for comprehensive policies that foster innovation while protecting investors.

Shah also points to advances in blockchain technology, such as tools to detect fraudulent activity, as crucial to maintaining market integrity. “Technological developments will play a pivotal role in ensuring transparency and fairness in the cryptocurrency space,” he adds.

Navigating between challenges and opportunities
Despite the optimism surrounding the expected policies, Zikas and Shah suggest a cautious approach. Zikas stresses the need to make users and policy makers aware of the extent (and limits) of technology. For example, while blockchain technology can provide privacy benefits, common blockchain ledgers are not completely immune to technologies that can reveal identities. Although absolute privacy is technologically possible, it can facilitate illicit activities. At the same time, Shah stresses the importance of balancing innovation with market stability, especially in light of the volatility of the cryptocurrency market and the challenges posed by the end of Basel III – the latest update to global capital standards – which is scheduled to come into force in 2025.

Looking to the future, both Zikas and Shah agree that clear, enforceable policies will be essential to positioning the United States as a global leader in blockchain technology. As the Trump administration aims to transform the United States into a crypto powerhouse, the coming months will be pivotal in shaping the future of digital assets and blockchain innovation.

By promoting a balanced approach that combines regulatory clarity and technological innovation, the United States can solidify its leadership in the global cryptocurrency economy — while ensuring that the ecosystem remains transparent and secure.