Trump, Capitol allies likely looking at quick cryptocurrency legislation

Of all the issues the incoming 119^th U.S. Congress has on its plate, cryptocurrency might generate the swiftest action and biggest headlines.

And it starts with the agenda set by President-elect Donald Trump, a pair of longtime Capitol Hill veterans said Monday.

“It does seem like Congress is on the verge of making big moves on crypto,” said Peter Roskam, former six-term congressman and lobbyist for the law firm BakerHostetler. “The issue’s ripe to me, there's a level of familiarity with rank and file, and there is an understanding that this has to be dealt with, that technology is just cascading past things.”

Roskam was joined by Kevin R. Edgar, a former House counsel and partner, government policy for BakerHostetler, on a webinar analyzing the impact of the election results on financial services.

Cryptocurrency is soaring since Trump won the election. He proposed a bitcoin federal reserve during an appearance at the Bitcoin 2024 conference in July and vowed to make the United States the “bitcoin superpower” of the world.

Monday, the world’s leading cryptocurrency rose nearly 5% after Trump again affirmed plans to create a U.S. “bitcoin strategic reserve.” The surge pushed bitcoin to a new record above $106,000.

“It does seem like the incoming president is very forward leaning with this,” Roskam said, “and in light of that, he's going to put his thumb on the scale and be intentional.”

Crypto convert

Trump once referred to cryptocurrency as a “scam,” but embraced digital assets during his campaign. In his bitcoin conference speech, Trump vowed to make the United States the "crypto capital of the planet."

The Republican National Committee crafted a pro-cryptocurrency paragraph and added it to the party platform and the Trump campaign announced it would accept donations in crypto.

Trump named a White House czar for artificial intelligence and cryptocurrencies, former PayPal executive David Sacks. He is also nominating pro-crypto Washington attorney Paul Atkins to head the Securities and Exchange Commission.

“The president-elect was very clear that he wants the United States to be a place that crypto wants to be in terms of the innovation,” Edgar said.

Trump is not alone in getting the crypto bug, Edgar added. At least three new senators – Sens. Adam Schiff, D-Calif., Bernie Moreno, R-Ohio and Ruben Gallego, D-Ariz., all reportedly received crypto support during their campaigns, he said.

Meanwhile, Trump is backing World Liberty Financial, a cryptocurrency project that recently received a $30 million investment from Justin Sun, a crypto entrepreneur.

Quick legislation

The first 100 days of a new president’s term are generally reserved for high-priority items. A cryptocurrency bill could be high on Trump’s list, likely reflecting the influence of Elon Musk, who reportedly contributed more than $250 million to his campaign. Musk backs Dogecoin, a less common cryptocurrency which is up more than 18% since the election.

A new bill could resemble one the House of Representatives passed in May to create a new legal framework for digital currencies. That bill passed despite a warning from the SEC that it could create new financial risks.

The Republican-sponsored Financial Innovation and Technology for the 21st Century Act passed in a bipartisan 279-136 vote. Bill supporters in Congress argue that it will provide regulatory clarity and help promote the industry's growth.

Crypto businesses need to know what the rules are and whether they answer to the SEC or the Commodity Futures Trading Commission, Edgar explained.

“When would they not be subject to either depending on the product that they're offering,” he said. Cryptocurrency legislation supporters want to “[bring] this marketplace into the U.S. fully so that it's not looking at other jurisdictions who might have a more advanced regulatory or legal regime.”

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