As the US Congress and Senate hearings on Facebook’s Libra cryptocurrency wrapped up, members of the Trump administration shifted their gaze onto Bitcoin and cryptocurrency as a whole. During both hearings a number of lawmakers openly aired their opinion that Libra should never be allowed to launch. Even more concerning, on Thursday US Treasury Secretary Steven Mnuchin made media waves when he told CNBC Squawk Box that the U.S. government intends to implement “very, very, strong” regulations on cryptocurrencies to ensure they do not become “Swiss-numbered bank accounts”.
Trump, who announced his distaste for cryptocurrency in general last week, initially failed to impact market sentiment. A subsequent breakdown over the weekend sent Bitcoin below $10,000.
Publishing a dedicated thread on the chances of Trump banning the cryptocurrency, Krueger argued he could theoretically have some success.
By targeting entry and exit points for retail and institutional investors, the president would turn Bitcoin into an isolated, more illiquid asset as it is used by lay consumers
In reality, however, Trump would need to convince Congress of the need to ban Bitcoin, and lawmakers could overturn his demands, even if they occurred via an executive order or similar emergency measures.
“A ban is thus feasible but the probability of it becoming law is extremely low”, Krueger Said
According to Lee, while highly unlikely, the President could easily sign an executive order to ban Bitcoin and cryptocurrency transactions in the United States just like he did for Venezuela. Without providing much explanation, Lee concluded that such a drastic move would probably result in a Bitcoin fork.
In the extremely unlikely event that Trump decides to go after bitcoin, either at the protocol level or on the service layer, he will certainly be vociferously challenged in the courts. The hearings could generate debilitating uncertainty, but at the same time they would push the conversation even further along the path of regulatory clarity, and the resulting decisions on limits to federal power, the freedom inherent in code and even an official recognition of the potential of cryptocurrency will impact tech development at all levels.