The Trump administration is preparing to make a big move in the world of cryptocurrency. They plan to create the first-ever Senate subcommittee focused on digital assets, which will be part of the Senate Banking Committee.
This new subcommittee will work on creating rules and regulations for the growing crypto industry in the United States.
It is reportedly expected to be chaired by Republican Senator Cynthia Lummis, who is a strong supporter of cryptocurrencies, and is seen as a step towards clearer regulations for the crypto sector.
What is the subcommittee about?
As per reports, the Senate Banking Committee, now led by Senator Tim Scott from South Carolina, will behind the creation of the special subcommittee for cryptocurrency. This new subcommittee will focus on how to regulate digital assets and cryptocurrency businesses.
The subcommittee will be modelled after a similar one in the House of Representatives, led by Representative Patrick McHenry.
Its key role will be to figure out how to create clear and effective rules for the crypto industry. This will help the sector grow, while also protecting consumers and ensuring that the market is not abused.
Senator Lummis, who is a well-known advocate for crypto, is anticipated to lead the subcommittee. She has been involved in crypto regulation for years and is seen as someone who truly understands the space.
The CEO of the Crypto Council for Innovation, Sheila Warren, spoke highly of Lummis, saying her leadership would help create regulations that support both innovation and responsibility.
Senator Tim Scott, who is also a supporter of cryptocurrencies, believes that crypto could “democratise the financial world”, meaning that it could make financial services more accessible to everyone.
The subcommittee will focus on making sure that crypto can grow without limiting technological advancements, and that it benefits everyone.
Crypto industry’s growing influence
The cryptocurrency industry is becoming more involved in shaping US regulations. As Trump prepares to take office, many crypto companies and individuals have made significant contributions to his inaugural fund.
For example, Circle, the company behind the $USDC stablecoin, donated $1 million, while Ripple, a major blockchain company, gave $5 million.
Other firms, such as Kraken and Robinhood, also contributed. This shows just how important the crypto industry has become in Washington and how it is trying to influence policy decisions.
These donations demonstrate that the crypto sector is now seen as a key part of the financial system, and it wants to make sure it has a say in the rules that will govern it.
With so many donations from crypto firms, it is clear that they are ready to support the creation of regulations that will help the industry thrive.
Lummis’s support for Bitcoin
Cynthia Lummis’s anticipated appointment to lead the crypto subcommittee fits perfectly with her long-standing support for digital assets, particularly Bitcoin ($BTC).
Lummis has been one of the biggest advocates for Bitcoin in Congress and has pushed for the US to build a national Bitcoin reserve. This would involve the US government buying large amounts of Bitcoin to hold as a financial asset.
One of Lummis’s most ambitious proposals was the Boosting Innovation, Technology and Competitiveness through Optimised Investment (BITCOIN) Act, which called for the government to purchase 1 million Bitcoin over five years.
This would not involve taxpayer money, but rather existing funds within the Federal Reserve and the Treasury. If successful, this plan could create a major reserve of Bitcoin for the US, which could have a big impact on the cryptocurrency market.
Lummis is also a key voice when it comes to ensuring that crypto has clear regulations. She wants to create a system where new technologies can grow, but also where consumers are protected.
“We need clear rules for the crypto industry, and that’s exactly what this subcommittee will focus on”, Lummis has said.
However, her vision for a Bitcoin reserve may face challenges. The current administration has announced plans to sell $6.7 billion worth of Bitcoin that was seized during investigations into the Silk Road, a notorious online marketplace.
This move could conflict with Trump’s plan to build a Bitcoin reserve, as it may create tension over how the US should handle its Bitcoin holdings.
Trump’s interest in crypto
Although former President Trump has not always shown interest in digital assets, his connection to cryptocurrency has become more noticeable recently.
Trump’s growing crypto portfolio, which is now worth over $11 million, includes a number of digital assets. However, despite his public support for Bitcoin, Trump does not hold any of it.
Instead, his portfolio includes Ethereum ($ETH), wrapped Ethereum ($WETH), and his own token, MAGA ($TRUMP). One of the most interesting parts of his portfolio is a cryptocurrency called Trog ($TROG), which makes up a large portion of his holdings.
Trog is a relatively unknown token, and its value is much lower than more popular cryptocurrencies like Bitcoin. Despite this, Trump’s portfolio is worth $11.42 million, and Trog accounts for about 46% of that total. Trog is traded at a very low price of $0.0000261, and its market value is $10.9 million.
While Trump’s personal involvement with crypto is still developing, the overall crypto market has reacted positively to his election victory.
After Trump won, the value of the entire cryptocurrency market surged dramatically, increasing from around $2.2 trillion to nearly $3.7 trillion by December 2024.
Even after some market volatility, the total value of cryptocurrencies remains significantly higher than it was before the election, showing that investors are hopeful about what Trump’s policies could mean for the future of digital assets.
Many in the crypto community are particularly excited about Trump’s idea of creating a national Bitcoin reserve. They also welcome the expected resignation of SEC Chair, Gary Gensler, who has been criticised for his handling of crypto regulations.
Trump’s appointment of David Sacks as White House Crypto Czar has also been well-received, and the industry is hopeful that these moves will create a more supportive environment for cryptocurrencies.
