How Trump’s Actions Will Reshape the Cryptosphere in 2025

As 2025 unfolds, the cryptocurrency landscape is being significantly reshaped by the actions of the Trump administration. With a clear focus on fostering innovation while maintaining the dominance of the U.S. dollar, President Trump’s policies are set to have a profound impact on the development, regulation, and adoption of digital assets. This article will delve into the key areas influenced by these policies, examining the potential consequences and opportunities that lie ahead.

Trump’s Executive Order: A Pro-Crypto Policy

President Trump’s Executive Order, signed on January 23, 2025, titled “Strengthening American Leadership in Digital Financial Technology,” signals a shift towards a more favorable stance on cryptocurrencies. It aims to encourage responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy, marking a departure from previous administrations’ cautious approach. The order emphasizes the importance of the digital asset industry in innovation and economic development, including policies to ensure access to open public blockchain networks for lawful purposes and providing regulatory clarity with technology-neutral regulations. Trump campaigned on the promise to make the United States the “crypto capital” of the world and has taken steps to advance that goal.

The Working Group on Digital Asset Markets

The Executive Order establishes a Working Group on Digital Asset Markets within the National Economic Council. This group is tasked with reviewing current regulations and proposing a federal regulatory framework governing the issuance and operation of digital assets, including stablecoins, in the United States. The Working Group, chaired by the President’s Special Advisor for AI and Crypto, has aggressive deadlines for making regulatory and legislative recommendations. Within 30 days of the Executive Order, agency heads must identify regulations, guidance, orders, and other items that affect the digital asset sector. Within 60 days, each federal agency must submit recommendations for rescinding or modifying these rules. By July 22, 2025, the working group must submit recommendations on regulatory and legislative proposals, including a proposed federal regulatory framework relating to the issuance and operation of digital assets and the potential establishment of a “national digital asset stockpile”.

USD-Backed Stablecoins and the Sovereignty of the U.S. Dollar

A central tenet of Trump’s policy is bolstering the U.S. dollar’s global standing through lawful USD-backed stablecoins. The order indicates the administration’s policy to promote legitimate dollar-backed stablecoins worldwide. By promoting their use, the administration aims to leverage the efficiency and accessibility of digital assets while retaining control and influence over the global financial system.

The Prohibition of Central Bank Digital Currencies (CBDCs)

The decision to prohibit the establishment, issuance, and use of Central Bank Digital Currencies (CBDCs) reflects concerns about risks to financial stability, individual privacy, and national sovereignty. Trump’s Executive Order prohibits federal agencies from pursuing CBDCs, characterizing them as threats to “the stability of the financial system, individual privacy, and the sovereignty of the United States”. This move opens the door for private-sector innovation in the digital currency space, particularly for stablecoins.

Revoking Biden’s Digital Asset Policies

Trump’s approach involves undoing many of the digital asset policies implemented by the Biden administration. The Executive Order expressly revokes President Biden’s March 2022 Executive Order and the Department of the Treasury’s Framework for International Engagement on Digital Assets. This signals a shift away from international regulatory cooperation and CBDCs in favor of a domestic-focused approach centered on deregulation, financial autonomy, and technological innovation. All policies, directives, and guidance issued pursuant to these two items from the previous administration are rescinded.

What to expect in Trump’s second term?

Economy and Taxes:

• Tax Cuts: A push to extend the 2017 Tax Cuts & Jobs Act (TCJA), which are set to expire at the end of 2025, is highly likely. These cuts would primarily benefit high-income households and decrease federal revenue. Other proposals include lowering corporate taxes, potentially to 15%, and reversing the deduction cap on state and local property taxes. Additional tax breaks on tips, Social Security, and overtime pay may also be considered.
• Deregulation: Trump is expected to pursue economic growth through deregulation, including easing restrictions on businesses, promoting fossil fuel production, and allowing exploration on federal lands. He also aims to increase housing availability by relaxing regulations, though most building codes are determined locally.
• Aggressive Tax Reforms: Proposals include potentially aggressive tax reforms, such as establishing two federal income tax rates and abolishing most deductions and credits. There may also be consideration of a “nearly flat tax” on wage income.
• Tariffs: Expect the implementation or raising of tariffs on imported goods.

Immigration:

• Mass Deportation: Plans for a large-scale deportation program are anticipated, potentially involving the National Guard and law enforcement.
• Restrictive Policies: Expect a reinstatement of policies such as the “Remain in Mexico” initiative and strict limitations on entrants from certain countries. “Ideological screening” for prospective immigrants and an end to birthright citizenship may also be implemented.
• Reduction in Immigration: Measures to lower the numbers of refugees, work visa holders, and asylum seekers are likely. This could also include the reintroduction of immigration rules from 2017 to 2021. Plans might involve dismantling the Department of Homeland Security and combining it with other immigration enforcement units to create a larger border policing operation. Other potential changes include eliminating visa categories for crime and human trafficking victims, increasing fees on immigrants, and allowing fast-tracked applications for migrants who pay a premium.

Executive Power and Bureaucracy:

• Reducing Federal Employees: Measures to simplify the process for dismissing federal employees, potentially by reclassifying many as exempt from civil service protections, are possible.
• Control Over Spending: Expect assertions that the president holds exclusive authority over federal expenditure, allowing discretion in financial matters.
• Department of Education: There may be an attempt to shut down the Department of Education and return educational authority to state governments.

Climate and Energy:

• Fossil Fuels: Energy and transportation policies may be anchored around fossil fuels, with support for traditional infrastructure and combustion-engine vehicles. Expect attempts to eliminate incentives promoting the development of electric vehicles and reduce fuel efficiency standards.
• Environmental Protection: There may be efforts to limit or eliminate various environmental protection programs, potentially including the National Oceanic and Atmospheric Administration and redirecting the National Weather Service’s focus towards selling weather data. A key goal could be to “stop the war on oil and natural gas”.

Foreign Relations:

• Isolationist Stance: Expect a more isolationist diplomatic approach, non-interventionist military policies, and economic protectionism.
• Military Expansion: Promises of military expansion and increased Pentagon funding, potentially including a missile defense system, are likely.