Bitcoin Under Trump, Including a State's Rights Battle – Featured Bitcoin News


Bitcoin Under Trump, Including a State's Rights Battle

Silence surrounds the probable impact of Trump on Bitcoin because there’s a dearth of facts. Some indications hint at a favorable impact however, even as they pose threats to freedom and prosperity. Indeed, sometimes its because of the threat that bitcoin could surge forward as a safe haven and the solution to the problems government creates. Here’s a sampling of what users can expect: two unintended consequences and two slug-matches brewing. 

Bitcoin To The Rescue on Government-Created Problems

Consider two examples.

Bitcoin Under Trump, Including a State's Rights Battle1) Trump vows to impound or tax remittances sent by Illegal immigrants back to Mexico because the money constitutes “illegal wages.”

‘Illegal’ Mexicans commonly send most of their earnings back home to their families. According to World Bank estimates, such personal remittances amounted to $26,164,387.99 in 2015. The World Banks added, “three of the most frequently used remittance service companies [are] Western Union (6.1%), MoneyGram (6.64%), CitiBank (14.59%) charge 9.11% on average, excluding the conversion fees.”

‘Illegals’ will almost certainly seek a less formal and untaxed path to send remittances home. And Bitso, the largest bitcoin conversion exchange in Mexico, offers a solution; over 130,000 locations in Mexico conveniently convert pesos and greenbacks in and out of bitcoin. Predictably, if allowed by government, other companies will compete and keep the fees reasonable.

Skeptics of crypto-remittances cite the difficulty ‘illegals’ have in obtaining bitcoin. But a January 27 article, “How Trump’s Wall and Remittance Tax Could Give Bitcoin a Boost,” described how the obstacle could be vaulted.

  • Confiscated or highly-taxed remittances become alienated from customary transmission routes;
  • Bitcoin services aim at ‘illegals’ – for example, by not requiring social security numbers or streamlining the remittance of bitcoins;
  • The services avoid reporting or follow compliance regulations, perhaps by functioning on the gray market or having a loop-hole status.

2. The Trump admin wants to clamp down on marijuana even in states where it is legal. 

Former Fed crackdowns have prompted legal marijuana dealers to switch to bitcoin. Operation Choke Point, for example, was a Department of Justice attempt to freeze such dealers out of the traditional banking system. A Nov. 7, 2016, article, “Colorado Cannabis Operations Begin Banking With Bitcoin,“ stated, “the banking industry under the U.S. Federal Reserve wants nothing to do with cannabis money, because marijuana is still illegal at the federal level.” Alternate payment systems, like Paypal, also caved to federal pressure.

Enter bitcoin with no need for bank accounts, or third parties and with lower fees. Enter companies, like 1620 Solutions, with the motto “Hemp Currency = Bitcoin.”

More federal crackdowns are likely to drive marijuana even closer to bitcoin. If the assault merely continues to freeze dealers out of traditional payment paths, then the cryptocurrency will function and flourish openly. If the assault is more repressive, with raids and the confiscation of assets, then bitcoin use will go gray or black market. But the marijuana market will survive and become solidly crypto or cash.

Some Intended Indications For Bitcoin

Bitcoin Under Trump, Including a State's Rights Battle

The foregoing examples are unintended consequences. That is, the use of bitcoin as remittances and as a banking substitute were not intended by the new policies. They are by-products. Other Trump signals more directly address bitcoin.

Consider another two examples.

1. Trump clearly intends to relax regulations on the traditional banking system.

His plans include “dismantling” the Dodd-Frank Act and the Consumer Financial Protection Bureau, giving the financial sector more freedom in such practices as issuing loans. (Both were viewed as consumer protections in the wake of the 2008 banking crisis.)

Presumably, the Durbin Amendment, which is part of Dodd-Frank, would also be repealed. The amendment limits what credit cards can charge merchants for swipe fees. Thus, the cost of receiving credit card payments would almost certainly rise for businesses, making the cost of goods and services rise for card users. Businesses would return to or increase the practice of giving discounts for cash or cash-equivalents. Customers would be incentivized to adopt cryptocurrencies.

2. The Feds and New York State are jousting about which one will lead in the regulation of bitcoin –  the federal Office of the Comptroller of the Currency (OCC) or the NY Department of Financial Services (DFS).

No one knows where the feds will land on bitcoin. The appointment of long-time bitcoin enthusiast Mick Mulvaney to head the Office of Management and Budget is encouraging but says nothing substantial. One thing is clear, however: New York State thinks it knows Trump’s intentions. A battle to ‘own’ the regulation of bitcoin issue is poised to begin, and a challenged Trump does not back down, especially when challenged in his own backyard of NY.

Established in 2011, the DFS is arguably now the most aggressive bitcoin licensing agency in America. A January 17 Press Release was entitled “DFS Superintendent [Maria T.] Vullo Submits Comment Letter to OCC in Opposition of Proposed Special Purpose National Bank Charter for ‘Fintech’ Companies.” The letter vehemently opposed the OCC’s proposal to start regulating fintech:s, which would include bitcoin institutions. Vullo stated, “The OCC should not use technological advances as an excuse to attempt to usurp state laws that already regulate fintech activities.”

The feds versus New York state will be a slug match for financial authority. Whether other Trump-hostile states, like California, follow suit is not clear but likely. Bitcoin could become a state’s rights issue, especially since huge revenue is involved. Whether this would be good for bitcoin is unpredictable.


Whether through unintended consequences or by targeted policies, whether on the open or gray market, bitcoin will rise in value under Trump. The wild card is state’s rights.

What do you think about bitcoin under the Trump administration? Let us know in the comments below.

Images courtesy of Shutterstock,, and Reuters/Brian Snyder TPX Images. 

Tags in this story
Bitcoin, Bitcoin Remittance, Cannabis Industry, DFS, Dodd-Frank Act, Fed, Mexico, Mick Mulvaney, new york, OCC, Trump

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Wendy McElroy

Wendy McElroy is a Canadian individualist anarchist and individualist feminist. She was a co-founder of the Voluntaryist magazine and modern movement in 1982, and has authored over a dozen books, scripted dozens of documentaries, worked several years for FOX News and written hundreds of articles in periodicals ranging from scholarly journals to Penthouse. She has been a vocal defender of WikiLeaks and its head Julian Assange.

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