As President-elect Donald Trump prepares to take over the White House next year, expectations are growing in the cryptocurrency sector for the role of David Sacks as the US cryptocurrency czar.
In a conversation with BeInCrypto, Ryan Chow of Solve Protocol and Kadan Stadelmann of Komodo expressed optimism about Sacks' appointment and expect a positive change towards a more industry-friendly regulatory environment.
Crypto Industry Welcomes Sacks' Appointment
Earlier this month, Trump appointed Sacks. He is a seasoned entrepreneur and investor with over 20 years of experience in Silicon Valley, and has been appointed as the White House's Block and AI czar.
Sacks brings extensive experience to this role. He was the founding COO of PayPal and is also known as a member of the PayPal Mafia. He later founded Yammer, a corporate software platform that was acquired by Microsoft for $1.2 billion.
The crypto community has high expectations for Sacks, hoping that he will develop a unified national approach to policy-making and position the US as a leader in emerging technologies.
"Sacks is expected to advocate for clear guidance that benefits Block companies, which could reduce regulatory burdens and encourage investment in digital assets." - Ryan Chow, CEO of Solve Protocol
As an early and vocal supporter of crypto, Sacks has endorsed Trump's efforts to collaborate with industry leaders. After his appointment, he expressed excitement about the potential to strengthen US competitiveness in emerging technologies in a post.
"One of Sacks' key responsibilities will be to establish a legal framework for crypto, providing the clarity that the industry often lacks due to regulatory uncertainty. His appointment could signal the Trump administration's intent to implement business-friendly regulations that foster innovation in the Block sector, aligning with Trump's campaign promise to make the US a leader in technology and crypto." - Ryan Chow
With his long-standing passion for crypto, Sacks now has the opportunity to influence the development of industry-friendly regulations.
Gary Gensler's 'Excessive' Regulatory Crackdown
The newly appointed 'crypto czar' is also known for his public disdain for the regulatory approach of the current Securities and Exchange Commission (SEC) chairman, Gary Gensler.
Under Gensler's leadership, the SEC has adopted an aggressive regulatory approach towards major crypto companies and exchanges. While aiming to protect investors, these actions have caused friction within the industry, with stakeholders arguing that they hinder innovation and create regulatory uncertainty.
The US currently lags behind countries like the UAE and Singapore in providing a clear regulatory framework for the crypto industry.
According to Chow, as Trump's crypto czar, Sacks can effectively influence the development of clear regulatory guidance for digital assets.
"Sacks is expected to advocate for clear guidance that benefits Block companies, which could reduce regulatory burdens and encourage investment in digital assets." - Ryan Chow
Sacks now faces the task of determining whether the US will become a leader in Block innovation or risk further regulatory uncertainty within the crypto industry.
Undefined Role
While Sacks has promised a crypto agenda, the responsibilities of the 'crypto czar' remain unclear.
"The ambiguity around Sacks' role being part-time and not requiring Senate confirmation raises questions about his ability to implement significant policy changes." - Ryan Chow
Despite this ambiguity, by appointing pro-crypto figures like Sacks to key positions in his administration, Trump may be able to more easily create a regulatory environment favorable to digital innovation.
"Sacks' selection, along with the appointment of Paul Atkins as SEC chairman, indicates a move away from the enforcement-centric policies of the Biden administration." - Ryan Chow
In addition to Atkins, Trump has appointed Steven Mnuchin, a former Treasury Department official during his first administration, as the chairman of the Council of Economic Advisers (CEA). As the name suggests, this council advises the president on economic matters.
Mnuchin is a strong supporter of crypto and has previously called for regulatory reform in the US. As CEA chairman, he will analyze economic trends, develop growth strategies, and evaluate the effectiveness of existing policies.
Meanwhile, Trump has appointed Bo Hines, a former congressional candidate, as the executive director of the President's Advisory Council on Digital Assets. Hines will work with Sacks to develop a regulatory framework that balances innovation and consumer protection. Nevertheless, the crypto industry is expecting Sacks to have a significant influence on decision-making.
"While Sacks' role is advisory and part-time, his close relationship with Trump puts him in a position to influence key policy decisions affecting both AI and crypto." - Ryan Chow
The Scope of Sacks' Influence
In the conversation with BeInCrypto, Kadan Stadelmann, the CTO of the Komodo platform, ultimately expressed that Trump himself will likely have the greatest influence on crypto policy.
Here is the English translation of the text, with the specified terms preserved:"Through his support for the cryptocurrency industry, Donald Trump himself can greatly help to narrow the gap with countries where regulatory clarity is already a daily routine. Sachs can certainly provide advice, and may even be able to steer other government departments to align with the president's vision." - Stadelmann
According to Stadelmann, Sachs is a good additional figure, but not essential to the formation of regulations.
"Donald Trump's re-election could provide a basis for companies to return to the US, especially when he promises a 15% tax rate for businesses. Sachs' appointment is a secondary issue." - Stadelmann
The cryptocurrency industry is expected to undergo various policy changes with the appointment of a new SEC chairman. This includes an executive order to facilitate bank service access for cryptocurrency companies, the appointment of cryptocurrency-friendly individuals to key government positions, and the possibility of strategic Bitcoin reserves.
CBDC Uncertainty
The conversation on a more friendly approach to digital assets leads to the topic of Central Bank Digital Currencies (CBDCs). Central banks issue and regulate CBDCs, which are digital forms of currency. Unlike cryptocurrencies, CBDCs are designed to coexist with physical money.
Recognizing the digitalization of money and payments, central banks around the world have been exploring CBDC development to ensure their continued relevance in the evolving virtual financial world.
"Sachs is not explicitly tasked with CBDC development, but his influence on cryptocurrency policy could shape the discussion around it. CBDCs can be seen as the government's response to the rise of private digital currencies, which could increase regulation and oversight of these assets." - Chou, BeInCrypto
Since the Trump administration is expected to follow a crypto-friendly policy agenda, CBDC may not be a priority.
"Sachs' preference for regulatory easing could slow or complicate the move towards CBDC establishment, and he may prioritize strengthening the existing cryptocurrency ecosystem over introducing government alternatives." - Chou
It is unclear how much control Sachs will have in creating a US-backed digital currency.
"Critics argue that his ability to significantly influence key decisions on CBDC or private cryptocurrencies could be limited without formal authority or oversight. While CBDC may be discussed during his tenure, well-regulated digital assets may still be preferred in the end." - Chou
Whether Trump wants to create a digital dollar is another obstacle for CBDC supporters. In January, Trump promised in a speech in New Hampshire that as president he would "never allow the creation of a central bank digital currency" and described it as "extremely dangerous" and "government tyranny".
Time will tell if Trump's stance remains the same.
