Presidential nominee and former president Donald Trump recently took to his social media platform Truth Social to announce J.D. Vance as his running partner for this year’s election. Trump emphasized Vance’s exemplary background and career in fintech, as well as his advocacy for American workers. This aligns with Trump’s goals in digital assets and innovation.
Vance, with a strong crypto background, appears to have added credibility to the race. Since his 2022 Senate election, he supported pro-crypto legislation, held Bitcoin (BTC-USD) and criticized SEC chair Gary Gensler’s digital asset regulations. Nic Carter of Castle Island Ventures praised Vance as a pro-tech and pro-American dynamism choice. Vance served in the Marines, attended Yale Law and was previously a venture capitalist for Peter Thiel.
So, let’s dive into why Trump and Vance’s views on Bitcoin and central bank digital currencies (CBDCs) differ so widely.
What Are CBDCs?
According to Investopedia, a CBDC is considered digital money owned by the central bank. This is equivalent to the country’s fiat currency. Compared to cryptocurrencies, the value of CBDCs is regulated. Many countries are now developing their CBDCs, making it essential for the public to understand its implications.
Fiat money is a currency issued by the government. However, it does not have a physical commodity as a backing, like gold or silver. CBDCs are usually in the form of banknotes and coins supplemented by digital-credit-based systems.
Although physical currency is still widely used, it has declined in other developed countries, especially during the pandemic. The rise of crypto coins has become more popular, driving consumer interest in forming a cashless society.
Why Trump Is Against CBDCs?
In January, Donald Trump pledged to block the launch of a U.S. CBDC if elected, calling it a “dangerous threat to freedom.” Campaigning to return to the White House, Trump told New Hampshire supporters he would prevent the creation of a CBDC. His stance comes as governments worldwide explore CBDCs, with China advancing a digital yuan, India moving toward a digital rupee and the European Central Bank preparing for a potential digital euro.
In 2022, the Fed released a note on the pros and cons of a digital dollar. However, Chairman Jerome Powell thinks it remains non-committal. On January 17, Trump vowed to block CBDCs if he was elected back as president. He praised the crowd’s awareness of CBDCs and warned that such a currency would give the federal government absolute control over money. Trump promised to protect Americans from this perceived government tyranny.
Despite investing in digital currency, Trump criticized it as “highly volatile.” Republicans favor crypto-friendly regulations, while the Federal Reserve remains cautious. Trump sees AI as a greater threat, lacking real solutions.
J.D. Vance Is Also Pro-Crypto
Since his Senate election in 2022, Vance introduced and supported pro-crypto legislation, held Bitcoin and criticized SEC chair Gary Gensler’s regulatory approach. He blasted Gensler for politicizing securities regulation. Vance also introduced the Financial Regulatory Accountability Act to prevent federal banking regulators from blocking access to banking services for industries like gun manufacturers and crypto firms.
Vance highlighted crypto’s appeal as a response to Canada’s freezing of bank accounts amid vaccine mandate protests in 2022, emphasizing its role in circumventing political banking restrictions.
The $2 trillion crypto industry sees potential in a Trump-Vance administration to counter anti-crypto initiatives, such as Senator Elizabeth Warren’s “anti-crypto army.” Sam Lyman, Director of Public Policy at Riot Platforms (NASDAQ:RIOT), viewed a Trump-Vance presidency as favorable for individual sovereignty and transaction freedom.
What Trump and Vance Have in Common
In February, around a hundred attendees gathered at Bloomberg’s D.C. office for a Y Combinator conference on antitrust reform. Key figures included Sen. Elizabeth Warren and FTC Chair Lina Khan, advocating for updated American antitrust laws to hold big tech accountable. Sen. J.D. Vance, recently named Trump’s vice presidential pick, also supported the call for regulating major tech companies despite his Silicon Valley ties through Peter Thiel.
Vance, like many influential Republicans, aimed to challenge big tech’s dominance over online speech. This concern has been prominent in Congress and the Supreme Court, especially regarding content moderation on election misinformation.
Shortly before RemedyFest, Vance called for breaking up Google, criticizing its bias toward left-leaning sources. At the event, he stated that Google and Facebook “distorted [the] political process,” suggesting even some on the left might agree, though they may differ on solutions.
Bitcoin Surges Due to Trump-Vance Tandem
Bitcoin surged to a two-week high on Monday, reaching $65,097.15 amid increased optimism for crypto-friendly candidate Donald Trump in the presidential race. This 6.4% rise followed a recent assassination attempt on the former president, drawing parallels to the 1981 shooting of President Reagan, according to Ben Emons of FedWatch Advisors.
After the incident, Trump’s popularity likely surged, boosting market optimism. Bitcoin rose 9%, with crypto stocks like Coinbase (NASDAQ:COIN) and Riot Platforms also gaining. Investors anticipate a Trump presidency could create a favorable regulatory climate for the crypto industry.
Trump had not detailed cryptocurrency regulations but was increasingly supportive of the sector despite earlier skepticism. He planned to speak at a major Bitcoin conference and has been accepting crypto donations since May. His stance positioned him against Democrats like Elizabeth Warren, while macroeconomic policies under a potential second term could create risks for the U.S. dollar, potentially boosting Bitcoin’s value.
Analysts at Standard Chartered indicated that the U.S. presidential election could significantly impact Bitcoin’s price, potentially reaching $150,000 if Trump wins. Despite recent struggles in the crypto market, increased confidence from a likely Trump presidency could revitalize investment and positively influence Bitcoin in the weeks ahead.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
