With President-elect Donald Trump gearing up to take over the White House in the coming year, all eyes are on David Sacks’ role as the United States’ crypto czar. Industry leaders Ryan Chow of Solv Protocol and Kadan Stadelmann of Komodo shared their positive outlook on Sacks’ appointment in a recent conversation with BeInCrypto, anticipating a shift towards a more favorable regulatory environment for the cryptocurrency sector.
Crypto Industry Welcomes Sacks’ Appointment
Trump recently named Sacks, a seasoned entrepreneur and investor with over two decades of experience in Silicon Valley, as the White House cryptocurrency and AI czar. Sacks brings a wealth of experience to the role, having served as PayPal’s founding COO and later founding Yammer, a platform acquired by Microsoft for $1.2 billion.
The crypto community is optimistic about Sacks’ appointment, hoping that he will lead the development of a cohesive national approach to policymaking and position the United States as a leader in emerging technologies.
“Sacks is expected to push for clearer guidelines that would benefit blockchain firms, potentially easing compliance burdens and encouraging investment in digital assets,” said Brian Chow, CEO of Solv Protocol.
As a vocal advocate for cryptocurrency, Sacks has shown enthusiasm for Trump’s engagement with industry leaders. Following his appointment, Sacks expressed excitement about the prospect of enhancing American competitiveness in emerging technologies.
“One of Sacks’ main tasks will be to establish a legal framework for cryptocurrency that offers much-needed clarity to an industry often grappling with regulatory uncertainty. His appointment signals the Trump administration’s intention to implement business-friendly regulations that could foster innovation in the blockchain sector, aligning with Trump’s campaign promises to position the US as a technology and cryptocurrency leader,” Chow added.
Given his longstanding support for cryptocurrency, Sacks now has the opportunity to shape industry-friendly regulations.
Challenges Ahead: Gensler’s Regulatory Approach
The incoming ‘crypto czar’ is known for his criticism of current Securities and Exchange Commission (SEC) chair Gary Gensler’s regulatory stance on digital assets. Gensler’s aggressive approach has targeted major crypto firms and exchanges in an effort to protect investors. However, these actions have sparked debate within the industry, with stakeholders arguing that they stifle innovation and create regulatory uncertainty.
Currently, the United States lags behind countries like the UAE and Singapore in providing clear regulatory frameworks for the cryptocurrency industry.
According to Chow, as Trump’s crypto czar, Sacks has the opportunity to influence the development of clear regulatory guidelines for digital assets.
“Sacks is expected to advocate for clearer guidelines that would benefit blockchain firms, potentially reducing compliance burdens and encouraging investment in digital assets,” Chow emphasized.
Sacks faces the challenge of deciding whether the United States will lead in blockchain innovation or risk further regulatory uncertainty within the crypto industry.
Clarifying the Role of a ‘Crypto Czar’
While Sacks promises a crypto-focused agenda, the exact responsibilities of a ‘crypto czar’ remain ambiguous.
“The uncertainty surrounding Sacks’ role, being part-time and not requiring Senate confirmation, raises questions about his ability to enact significant policy changes,” Chow noted.
Despite this ambiguity, Trump’s appointment of pro-crypto individuals to key roles in his administration is expected to create a regulatory environment conducive to digital innovation.
“The selection of Sacks, along with Paul Atkins as SEC Chair, suggests a shift away from enforcement-heavy policies seen during the Biden administration,” Chow observed.
In addition to Atkins, Trump has appointed Stephen Miran, a former Treasury official, as the chair of the Council of Economic Advisors (CEA). Miran, a vocal advocate for cryptocurrency, will analyze economic trends and evaluate existing policies to promote economic growth.
Furthermore, Bo Hines, a former congressional candidate, has been appointed as the Executive Director of the Presidential Council of Advisers for Digital Assets. Hines will collaborate with Sacks to develop a regulatory framework balancing innovation and consumer protection. Despite Sacks’ advisory and part-time role, the industry expects him to play a pivotal role in decision-making.
“Although Sacks’ role is advisory and part-time, his close ties with Trump position him to influence critical policy decisions impacting AI and cryptocurrencies,” Chow highlighted.
Assessing Sacks’ Influence
In a discussion with BeInCrypto, Kadan Stadelmann, CTO of Komodo Platform, emphasized that ultimately, Trump holds the most power over crypto policies.
“By endorsing the crypto industry, Donald Trump can significantly aid the US in catching up with countries where regulatory clarity prevails. While Sacks can provide advice and potentially influence other branches of government to align with the President’s vision, his appointment is not essential in shaping regulations,” Stadelmann remarked.
Sacks’ appointment, alongside the selection of a new SEC chair, is anticipated to bring about various policy changes, including executive orders facilitating greater access to banking services for crypto firms, appointments of crypto-friendly individuals to key government positions, and the potential establishment of a strategic Bitcoin reserve.
Implications for CBDCs
The discussion on a more favorable approach to digital assets also raises questions about Central Bank Digital Currencies (CBDCs), which are digital forms of money issued and regulated by central banks.
Central banks globally are exploring CBDCs to adapt to the digital transformation of money and payments, ensuring their relevance in a digitized financial landscape.
“While Sacks is not specifically tasked with developing a CBDC, his influence on crypto policy could shape discussions around it. A CBDC could be viewed as a governmental response to the rise of private digital currencies, potentially leading to increased scrutiny and regulation of these assets,” Chow explained.
Considering the Trump administration’s focus on crypto-friendly policies, CBDCs may not be a top priority.
“Sacks’ preference for deregulation might complicate moves towards establishing a CBDC, as he may prioritize enhancing the existing crypto ecosystem over introducing government alternatives,” Chow added.
The extent of Sacks’ control over a US-backed digital currency remains uncertain.
“Critics argue that his ability to influence major decisions regarding CBDCs or private cryptocurrencies could be limited without formal authority or oversight. While CBDC discussions may arise during his tenure, well-regulated digital assets may remain the preferred choice,” Chow stated.
Whether Trump will pursue a digital dollar remains uncertain, as he previously expressed concerns about CBDCs during his term. Only time will reveal the direction of US digital currency policies.