During the previous week, the crypto community once again got jittery over global headlines. This time, the news source behind them is no one else than the main driver of global news in a previous couple of years – US President Donald Trump. He took to his favorite social media, Twitter, to state that he is not a big fan of cryptocurrencies, mainly because they are as he put it, volatile and are basing their value on nothing more than thin air.
Besides the fact that bitcoin and other digital currencies are not so important that the most powerful politician is openly discussing them, the attention is a double-edged sword like it regularly ends up being. The market, in general, shrugged off the same statement, signaling what is unequivocally an indifference, especially in the light of the big pull-out of the bull market that took place in a previous couple of weeks.
However, the discussion that Trump started did open one relatively new area – what are the odds of the US government under the helm of Donald Trump of simply banning bitcoin and other cryptocurrencies. In other words, how would the US President go about when it comes to dealing with bitcoin and what would that mean for the crypto markets not just in the country, but on the global level?
Bring it on
For many who are the most fervent members of the crypto community, the initial reaction was expected. It simply equated to: bring it one. Many believe that any such ban would be first and foremost unconstitutional. Others point out that even if it passed, there would be no impact on the whole market. The same assumptions are expectedly bold and many passed unchallenged by the legal or legislative community and experts.
But one thing is certain – the indifference, confusion and entrenched positions that are now a decade old all show that no one understands the larger impact of crypto on the global economy. Nothing is stopping Trump from trying to ban bitcoin. If his initiative is successful, the ban could make a big and lasting material impact on the value of the same tech. However, chances are that Trump will never even try something like this.
The Mechanism of a Ban
First and foremost, how would Trump even theoretically go about trying to ban bitcoin? Essentially, he would need to ban the very programming code that is behind bitcoin’s blockchain network. Nothing else would be encompassed enough to be meaningful. However, here immediately comes the idea that banning a piece of code.
This is where the argument of civil liberties comes into play. Code is in its basic form speech, according to his argument. This place is squarely in the protective reach of the US First Amendment. But, there is not that much clarity if one digs a bit deeper here. Showcases are pointing to the fact that judges ruled that code is speech, but which decisions were later suppressed by appeals and then dismissed without any official and definite rolling.
The code does have many elements of speech, behind that it can be used to communicate and express ideas, but the code is also very different. Unlike regular speech, it executes actions which are often regulated by law and which effects are pursued by law enforcement. No one can deny that a virus is a piece of code, but its creation and distribution is very much a criminal offense. There are no lawyers who would try to protect their hacker clients through the use of the First Amendment.
Bitcoin is not a virus, but it is an executable piece of code that its users are not writing but employing in their final form. In other words, they are executing it. The same action could then be declared illegal and the ban on its use could be declared by a legal document sponsored by Trump.
Enforcing a Ban
A ban on the use of bitcoin in the US should not be impossible to enforce. Of course, many would find numerous and creative ways around it, but the majority of regular users would simply stop employing it. Given the otherwise importance of the US crypto market its sudden absence would be very much felt and not just when it comes to its price.
What is equally worrying for the crypto community is the possibility of Trump going for pressure on the cryptocurrency businesses in the US. This would be a lot simpler to enact in the country, both legally and organizationally, but just as troubling for anyone who is looking to create or maintain a venture in the crypto domain. Here, Trump would even have an array of options at hand that would be outside of the formal legal avenues. The US approach to the sanctions against Iran is a great example.
Here, the threat of retaliation, both direct and under the table, was enough to turn off any company of international standing from dealing with Iran. This applied even to businesses that were not and still are not directly under the same US jurisdiction. However, no one wants to risk the ire of the US government if they plan on making business in the developed world. This applies to anyone from international shipping to esports. Still, there is one final big element that showcases that Trump will not choose to pursue this possibility.
Alienating the Constituency
The ultimate argument against the possibility of Trump trying to enact a ban is the fact that this would alienate much of his constituency. After all, even Trump’s inner circle or its affiliates number many bitcoin and cryptocurrency supporters. Furthermore, his political career was marked by the drive to roll back many financial regulations while encouraging innovation.
Trump is the small-government proponent and that is something that many users of bitcoin and other digital currency fully support. A move like a ban would risk turning this part of his base against him while offering little in return. So, while the chance of the US President banning bitcoin is not zero, all information shows that he is aware of the risk and benefits in this scenario and point to a really low chance of a ban taking place.