President Donald Trump has normalized cryptocurrency, but his personal profits and deregulation push could lead to the next financial collapse. Trump earned $1.2 billion from crypto in 2024, including $600 million from his memecoin $Trump and $500 million from World Liberty Financial, partly sold to a UAE-linked firm. He has aggressively promoted legislation like the Genius Act and Clarity Act to integrate crypto into the formal banking system, reducing oversight.
Crypto's Troubled History and Trump's Shift
Seventeen years after bitcoin's launch, crypto remains largely used for crime, sanctions evasion, and speculation—akin to Dutch tulips. Trump once called crypto a "scam," but reversed after industry donations and personal stakes. He launched World Liberty Financial and $Trump, costing MAGA investors nearly $4 billion. Trump gutted the SEC's crypto-enforcement unit and ordered the DOJ to pull back crypto-related prosecutions.
The Genius Act and Stablecoins
The Genius Act, passed with bipartisan support, allows banks and non-banks—including retailers like Walmart—to issue stablecoins pegged to $1. Unlike bank accounts, stablecoins are FDIC-uninsured. Issuers must back them with safe assets like Treasury bills, but the system invites risk. As of June 2025, 233 stablecoins exist. Mastercard, Citi, and JPMorgan are entering the space, while Trump pushes for the Clarity Act to further deregulate crypto trading.
Economic Risks
Experts warn of systemic risks. Gary Gorton and Jeffery Zhang note that waiting to regulate stablecoins would be a "terrible mistake." Barry Eichengreen warns that a panic could force stablecoin issuers to sell Treasuries, collapsing prices and destabilizing the economy. Michael Bordo adds that new entities will evade regulation. The solution—a Fed-issued digital dollar—is ignored because it would not enrich Trump.
The president's $1.2 billion crypto profit underscores the conflict of interest. The checks and balances that should prevent such self-dealing have failed, leaving the US economy vulnerable to a crypto-driven crisis.
