Encryption Policy Faces Obstacles: What Will Happen to Trump's Tax Reform Promises?

Recently, there have been a series of remarkable developments in the American encryption cryptocurrency sector. On one hand, the current president signed a resolution to abolish the previous tax reporting requirements for decentralized finance (DeFi) platforms. On the other hand, there are rumors that certain domestic American encryption projects may receive exemptions from capital gains tax, while non-American projects may face higher tax rates.

These developments have sparked widespread discussion about the direction of U.S. encryption policy. Looking back, the current president has previously held a critical stance on encryption, but in recent years, there has been a significant shift in position. From launching personal-themed NFTs to accepting cryptocurrency donations, and proposing a series of commitments to support industry development, he seems to be gradually fulfilling the promises made during the campaign, demonstrating a positive attitude towards the encryption field.

However, despite external expectations for a crypto-friendly policy, especially in terms of tax system reform, substantial progress has been limited so far. The repeal of the DeFi tax reporting rules, while significant, is essentially a passive measure and not a proactive tax relief policy. Even at the recent White House cryptocurrency summit, there were no large-scale tax reform proposals introduced.

This "silence" may be constrained by multiple factors. First, the Constitution stipulates that the power to levy taxes belongs to Congress, and the President has no unilateral authority to adjust tax rates. Secondly, the political game between the two parties may result in any significant reforms facing resistance. Furthermore, the current government seems to prefer supporting the encryption industry through an overall policy framework rather than directly addressing sensitive tax issues.

As a politician, the current president needs to seek a balance between fulfilling campaign promises and ensuring the legality of actions. Although he announced plans to make the United States the world's encryption capital, recent tariff policies have triggered market turmoil, nearly erasing the increase in encryption since his election.

In the face of this complex situation, the optimistic vision of a zero capital gains tax that U.S. cryptocurrency investors have been hoping for still seems out of reach. Striking a balance between policy-making and market reactions will be the core challenge of U.S. cryptocurrency policy in the coming period. How to promote crypto-friendly policies within a legal framework while avoiding triggering broader economic fluctuations will be a key test of the government's wisdom.