Trump cites China competition in vowing to create bitcoin 'stockpile'

[July 29, 2024]  By Stephanie Kelly

NASHVILLE, Tennessee (Reuters) - Republican presidential candidate Donald Trump told a bitcoin conference on Saturday that the U.S. must dominate the sector or China would, his latest move to court advocates of cryptocurrency, which Beijing has restricted and which he once dismissed as a "scam."

Speaking at the Bitcoin 2024 convention in Nashville, Trump positioned himself as the pro-cryptocurrency candidate ahead of the Nov. 5 presidential election, saying he would make the U.S. the world's cryptocurrency leader and embrace friendlier regulations than likely Democratic nominee Vice President Kamala Harris.

The Republican Party has promised lighter regulation for crypto, and Trump has slammed Democrats' attempts to regulate the sector.

"If we don't embrace crypto and bitcoin technology, China will, other countries will. They'll dominate, and we cannot let China dominate. They are making too much progress as it is," Trump said.

China has cracked down on cryptocurrency and there are strict controls on capital movement across its border. But people there are still able to trade tokens such as bitcoin on crypto exchanges, and Chinese investors can also open overseas bank accounts to buy crypto assets.

Trump said he would establish a crypto presidential advisory council and create a national "stockpile" of bitcoin using cryptocurrency the U.S. government currently holds that was largely seized in law enforcement actions.

"Never sell your bitcoin," Trump said. "If I am elected, it will be the policy of my administration, the United States of America, to keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future," he said.

Trump added that he would like to see expanded bitcoin mining by U.S. firms, even though he called cryptocurrency a "scam" in 2021.

The price of bitcoin initially eased after Trump's speech, but then rebounded and was last quoted up 0.94% at $68,182.

Trump also reiterated that he would commute the sentence of Ross Ulbricht, who is serving a life sentence for creating and operating the website Silk Road, which allowed users to secretly buy and sell drugs and other illegal products.

Republican presidential nominee and former U.S. President Donald Trump gestures at the Bitcoin 2024 event in Nashville, Tennessee, U.S., July 27, 2024. REUTERS/Kevin Wurm

Ulbricht's time served was "enough," Trump said to applause and chants of "Free Ross" from the crowd.

Countries around the world, including the U.S., have shown concern that privately operated, highly volatile digital currencies could undermine government control of the financial and monetary systems, increase systemic risk, promote financial crime and hurt investors.

Digital asset proponents say that cryptocurrency users are becoming a growing political force this election cycle, although it is unclear just how many users would prioritize crypto over other issues at the ballot box.

Some crypto advocates are backing Trump, and any move by the U.S. to create a national bitcoin reserve likely would be seen by them as major move to legitimize cryptocurrency.

Jack Mallers, CEO of global bitcoin app Strike, told Reuters that Trump's proposal to create a strategic bitcoin reserve was an "unbelievable vote of confidence."

Meanwhile, crypto executives are upset with the Securities and Exchange Commission's enforcement actions under U.S. President Joe Biden.

The agency has alleged that several crypto companies, including Coinbase and Binance, facilitate the trading of digital assets on their platform that should have been registered as securities, which the firms deny.

A group of nearly 30 Democratic lawmakers and Congressional candidates sent a letter to the Democratic National Committee and Harris on Saturday, urging them to take a "forward-looking" approach to digital assets.

"From an electoral standpoint, crypto and blockchain technologies have an outsized impact in ensuring victories up and down the ballot," they wrote.

(Reporting by Stephanie Kelly, David Brunnstrom and Michael Martina; Editing by Marguerita Choy)

[© 2024 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.