Donald Trump’s embrace of cryptocurrency has moved the sector closer to the center of American finance, but the report argues that the shift may carry serious consequences for markets, investors and the broader economy. What was once a fringe corner of the financial world is now being pulled into the formal banking system, with regulators easing pressure and lawmakers advancing legislation that could give crypto a more permanent role.
The president’s personal financial ties to the industry are central to the concern. According to the report, Trump made $1.2bn from crypto last year, part of a larger $2.2bn personal fortune in his first year in office. That included gains from World Liberty Financial, a crypto company he launched and partly sold to an investment firm linked to the United Arab Emirates, as well as his memecoin $Trump, which drew in unsophisticated investors and generated more than $600m for him. The report says his administration also moved to scale back enforcement at the Securities and Exchange Commission and the Justice Department, reducing scrutiny of crypto-related misconduct.
Why investors are watching closely
For investors, the bigger issue is not just political favoritism but the possibility that crypto’s risks could spread into ordinary finance. The Genius Act, backed by Trump and passed in Congress with support from 206 Republicans and 102 Democrats, allows banks, non-banks and even retailers such as Walmart to issue stablecoins pegged to the dollar. Unlike bank deposits, these holdings are not insured by the FDIC. Their appeal is that they may offer faster, cheaper transactions and broader payment uses beyond speculation, but they also tie the crypto world more tightly to mainstream financial institutions.
That is why major players are moving in. Mastercard is buying crypto businesses and accepting stablecoin settlements, while banks including Citi and JPMorgan are building their own infrastructure and coins. Brokers are also opening the door for clients to invest with stablecoin. As the report notes, there were 233 stablecoins on the market as of early June. Supporters see a new payments rail; critics see an asset class still best known for crime, sanctions evasion and volatile speculation now gaining legitimacy inside the financial system.
The report’s larger warning is that Trump’s policy choices may have normalized an industry that has yet to prove a durable economic purpose. If crypto’s reach continues to expand through banks, brokers and payment networks, the consequences could extend well beyond the fortunes of its early backers.
Source: theguardian.com
