The development trend of US crypto assets and its implications for my country

First, the Trump family's economic interests have become a key consideration.

As late as August 2021, Trump stated in a media interview that cryptocurrencies could be a "disaster waiting to happen." At the end of 2021, his wife, Melania Trump, debuted the Solana blockchain-based NFT series, "Melania's Vision." In December 2022, Trump launched the "Trump Digital Trading Card," an NFT series based on the Polygon blockchain. In September 2023, Trump and his family officially launched World Liberty Financial (WLFI) on the Aave V3 platform on the Ethereum mainnet. This DeFi platform supports crypto lending and investing. On March 25, 2025, WLFI launched a stablecoin called USD1, pegged to the US dollar, with a current market capitalization exceeding $2.1 billion. Furthermore, in January 2025, Trump launched TRUMP Coin, and his wife subsequently launched MELANIA Coin, both meme coins. Given his family's growing interest in crypto assets, in early May 2025, Democratic members of the US Senate introduced the Ending Crypto Corruption Act, which aims to ban federal officials and their families from issuing digital assets. Secondly, Trump received widespread support and donations from the crypto community during his election, using it as a key channel to attract young people. According to data from the US Federal Election Commission (FEC), cryptocurrency-related political action committees (PACs) and other pro-cryptocurrency organizations raised over $245 million in the 2024 election, primarily supporting pro-crypto political forces. Furthermore, a significant proportion of young voters, who typically have lower voter turnout, own or are interested in crypto assets, making them potential Trump supporters. Thirdly, there are fundamental differences between Trump's Republican Party and the Democratic Party's approaches to financial regulation. Since Obama's 2010 Dodd-Frank Act, the Democratic Party's regulatory approach has been based on the principle of financial consumer protection, placing tight constraints on all types of financial innovation. Republicans, on the other hand, comprehensively opposed the Act's three core elements: expanding regulators' powers, establishing a Consumer Financial Protection Bureau, and adopting the "Volcker Rule." In 2018, Trump passed the Economic Growth, Regulatory Reduction, and Consumer Protection Act, which comprehensively deregulated small and medium-sized banks. Clearly, the decentralized architecture claimed by crypto assets aligns with the Republican Party's philosophy of deregulation and emphasis on market freedom. Fourth, current stablecoins are primarily dominated by fiat stablecoins, with the US dollar stablecoin serving as the core unit of account. According to Artemis Terminal data, as of May 7, 2025, the total stablecoin supply reached $234.9 billion. Of this, USDT, a typical US dollar stablecoin, accounted for $150.8 billion, and USDC for $59.4 billion. Furthermore, a Bitwise report indicates that global stablecoin transactions will reach $14 trillion in 2024. Because US dollar stablecoins are pegged 1:1 to the US dollar and supported by 100% US dollar reserves, digital currencies, once posed as a challenge to the US dollar's image, may actually help consolidate its status. Fifth, the crypto asset industry has become a significant source of revenue for the US government. According to statistics, the U.S. SEC's cryptocurrency enforcement fines reached $4.7 billion in 2024, compared to just $150.3 million in fiscal year 2023, a year-on-year increase of over 30 times. In December 2024, the U.S. Internal Revenue Service (IRS) released the final version of new tax reporting regulations for crypto asset brokers, requiring them to fully report their users' tax information. Although Trump began promoting tax breaks for the crypto asset industry in 2025, leading to the Senate's rejection of the relevant IRS regulations, his vision of a "global crypto capital" likely still aims to create a relatively free market, encourage crypto capital to converge in the United States, indirectly increase related economic vitality and revenue, and achieve goals such as alleviating government debt and strengthening the status of the dollar. On March 6, 2025, US President Trump signed an executive order establishing a strategic bitcoin reserve and the United States Digital Asset Reserve. The order emphasized the following: First, the Treasury Department would manage the Strategic Bitcoin Reserve, responsible for holding bitcoin involved in criminal or civil asset forfeiture proceedings, and bitcoin deposited in the reserve would not be sold; second, the Treasury Department would manage the United States Digital Asset Reserve, also primarily consisting of digital assets subject to criminal or civil asset forfeiture; and third, a strategy would be developed for acquiring additional bitcoin, provided it was budget-neutral and imposed no incremental costs on taxpayers. Furthermore, the US government would not acquire additional reserve assets unless they were related to criminal or civil asset forfeiture proceedings. Following the issuance of the executive order, the prices of various crypto assets fell for a time as the details failed to meet industry expectations. We believe the Trump administration's motivation for building a crypto reserve is, on the one hand, to fulfill its campaign promises and demonstrate a crypto-friendly policy stance, solidifying Bitcoin's legal status as the most important crypto asset. On the other hand, it's to prepare for a "rescue" of the federal balance sheet. According to statistics, net interest payments on US debt will be $882 billion in fiscal year 2024, representing 3.06% of GDP. This figure is projected to approach $1 trillion in fiscal year 2025, reaching an unsustainable level. Unlike in the past, to address the challenges of the debt crisis, the Trump administration has begun to focus more on the federal "asset side." In addition to fixed assets (property, plant, and equipment, or PP&E), government-sponsored enterprise (GSE) investments (Fannie Mae/Freddie Mac), and gold and silver reserves, crypto assets previously held by various government departments have naturally become a focus. By the end of fiscal year 2024, the federal government's net assets will be approximately $5.7 trillion. Meanwhile, the federal government currently holds approximately 200,000 bitcoins. While this holds a limited position on its balance sheet, it can still be used to bolster market confidence, much like the federal government's strategic oil and gold reserves. Overall, while many believe the crypto-asset reserve strategy is linked to maintaining the dollar's status, we believe it is more rooted in Trump's perception of Bitcoin as "digital gold" and a strategic fiscal strategy derived from this. Meanwhile, over 20 US states have proposed crypto-asset reserve bills, but consensus is clearly divided, and several have already been rejected. Arizona passed a bill shortly before it was vetoed by the governor. New Hampshire subsequently passed and approved the bill, becoming the first state to establish a crypto-asset reserve. Stablecoin Development and Regulation There are generally several types of stablecoins. The first is fiat-collateralized (centralized issuance): issued by a centralized institution, with fiat currency or equivalent cash assets as reserves. The second is crypto-asset-collateralized (decentralized issuance): issued by smart contracts based on algorithms and collateralization rules, with other crypto assets as excess collateral. The third is algorithmic stablecoins (program-controlled issuance): without sufficient centralized collateral, these stablecoins maintain price stability through algorithms and market forces regulating the supply and demand of stablecoins and other crypto assets. Regarding stablecoins, Trump has mandated that relevant departments complete legislation on stablecoins before the Congressional recess in August 2025. On April 4, 2025, the U.S. House of Representatives Financial Services Committee passed the Stablecoin Transparency and Accountability Act (STABLE Act). Simultaneously, the U.S. Senate's Guidance and Establishment of a National Innovation for U.S. Dollar Stablecoins Act (GENIUS Act) passed its third vote on June 17. The two versions agree on bringing stablecoin issuance and operations under regulation, emphasizing reserve transparency and enhanced compliance. Differences arise over specific compliance standards, the issuance of stablecoins by foreign institutions, the allocation of regulatory authority, and restrictions on illicitly collateralized stablecoins. We believe that behind U.S. stablecoin policies, first, lies an effort to continuously strengthen the status of the U.S. dollar in the Web 3.0 space and the real world through stablecoins. As U.S. Treasury Secretary Benson emphasized, "a stablecoin regulatory framework will be carefully and prudently developed" and "the U.S. dollar will remain the world's leading reserve currency and will use stablecoins to strengthen this position." Second, the U.S. is striving for a voice in global financial governance in the digital age. For example, the EU's MiCA, which officially came into effect on December 30, 2024, has also created new competitive pressure on the United States. Third, they are continuously responding to support for crypto technology from Silicon Valley and young voters, and are strategizing and positioning for the November 2025 midterm elections. Fourth, facing the vast "incremental pie" of the digital world, both parties, the federal and local governments, and regulators are all vying for regulatory advantages. Other Crypto Asset Regulation: In May 2024, the US House of Representatives passed the Financial Innovation and Technology Act of the 21st Century (FIT21), a bill aimed at creating a new legal framework for digital currencies. This bill outlines a framework for determining whether crypto assets are securities, commodities, and other types of assets, and clarifies the relevant regulatory agencies. It states that "if the blockchain or digital ledger on which a digital asset operates is functional and decentralized," it is considered a digital commodity and will be regulated as a commodity by the CFTC. This will encourage more DeFi projects to evolve towards greater decentralization. Furthermore, for crypto assets clearly defined as "digital commodities," it will be easier to launch spot ETFs and related financial products if they meet the relevant prerequisites. Furthermore, the RWA sector will also offer more promising prospects due to its integration with DeFi, accelerating its expansion both on- and off-chain. As we head into 2025, the regulatory framework for crypto assets will be further refined. For example, the SEC is preparing to repeal the controversial SAB 121 accounting rule, which requires banks and corporations to list client crypto assets as liabilities on their financial statements, even if they do not control them. On June 10, the US House Financial Services Committee preliminarily passed the Digital Asset Market Structure Act of 2025. Building on FIT21, it further amends the unified regulatory framework and emphasizes consumer protection, promoting innovation, and filling regulatory gaps, aiming to consolidate the US's leadership in the global crypto asset market. We believe that US crypto asset regulation is attempting to strike a balance between risk and efficiency. On the one hand, it aims to maintain trading activity and its global dominance in the crypto asset market, thereby increasing regulatory laxity. On the other hand, it aims to curb the "unbridled growth" of crypto assets by implementing specific regulatory rules, which will also help to squeeze out "bad money" from the market. Additionally, it's worth noting that CBDCs are facing widespread resistance in the United States. In May 2024, the US House of Representatives passed the Central Bank Digital Currency Anti-Surveillance State Act; in January 2025, Trump signed an executive order prohibiting any institution from issuing or using CBDCs within or outside the United States. Meanwhile, the Federal Reserve's enthusiasm for developing a digital dollar has recently declined across the board. Reflections and Implications: Reserves While existing data is controversial, various parties agree that the amount of Bitcoin currently held by Chinese government departments at all levels is second only to that of the United States, primarily derived from confiscated assets in various law enforcement processes. Given Bitcoin's unique position in the Web 3.0 world, it may be necessary, from a medium- to long-term perspective, to consolidate Bitcoin held by governments at all levels into a national strategic resource (commodity) reserve to achieve effective asset management and prepare for future competition in the global cryptoasset market. As for other types of cryptoassets, there's no immediate need to devise a reserve plan. Of course, relevant policies and regulations still need to be adjusted, and mechanisms for central government to replace Bitcoin held by local governments need to be explored. Regarding stablecoins, regulatory frameworks for stablecoins are gradually being established in Europe and the United States, while their application in cross-border payments is rapidly developing. We should confront these challenges and promote related innovative exploration. On the one hand, with the advancement of Hong Kong's Stablecoin Bill, some suggest that the issuance of RMB stablecoins, collateralized by offshore RMB (or RMB assets), could be explored in Hong Kong. However, this model still presents challenges regarding cross-border capital flows and cross-border payment compliance. On the other hand, it is also possible to consider the evolving global regulatory trends and explore the introduction of stablecoin regulations. Furthermore, in specific free trade zones, leveraging relevant reform and innovation rules, explore compliant onshore RMB stablecoins, allowing some banks or non-bank payment institutions to conduct pilot programs. The EU's MiCA regulation, which identifies electronic money tokens (EMTs) as effectively fiat stablecoins, stipulates their issuance access and technical preparation, as well as capital, reserve, governance, and risk management requirements. MiCA only allows euro-denominated stablecoins for payment activities to protect the EU's monetary sovereignty. Furthermore, EMT issuers can only be credit institutions (banks) or electronic money institutions (non-bank payment institutions). Other Crypto Assets Crypto assets with stronger financial market or commodity attributes, such as DeFi and RWAs, as well as various crypto-asset-linked financial products such as ETFs, should not be liberalized in the short term, but they warrant increased research and attention. First, how can and is it possible to continue setting standards and thresholds for the provision of quasi-financial services in the Web 3.0 world, and how can the credit consensus of crypto assets be strengthened? Second, how can financial consumer and investor education and protection be implemented, particularly whether the participation of "qualified" individual investors can be identified and regulated? Third, how can decentralized finance and traditional finance collaborate? Can these two distinct financial standardization systems coexist? How can risks be managed in the interoperability of Web 3.0 and real-world assets? Fourth, can and how can crypto assets truly promote real economic goals such as economic growth, corporate innovation, and employment, rather than simply being a "small circle game"? Fifth, comprehensive risk prevention and sustained crackdowns on all types of illegal financial activities disguised as crypto assets remain a priority. Furthermore, in the face of a changing global development environment, expectations regarding the digital RMB's positioning may need to be moderated, with a long-term focus on developing scenarios and ecosystems, particularly strengthening its value and capabilities in cross-border wholesale payment services. In short, crypto assets will become an increasingly crucial topic in national policies and regulations. Of course, different types of crypto assets present different challenges; regulatory focus also varies based on technology, data, business, and market factors. However, it is foreseeable that crypto assets will become an unavoidable focal point in global competition, Sino-US exchanges, and cross-border capital flows. Therefore, my country must more actively promote the development of crypto asset rules and proactive oversight to enhance regulatory coordination with overseas counterparts, prevent potential risks, regulate market development, and unlock the value of the industry.