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With veteran investor Scott Bessent confirmed as treasury secretary, crypto markets are bracing for potential shifts in U.S. policy under Trump’s leadership.
Scott Bessent, a billionaire hedge fund manager, has been confirmed by the Senate in a 68-29 vote as the new U.S. Treasury Secretary. With major responsibilities around tax cuts, inflation, and tariffs, his appointment could also bring big changes to how crypto is regulated, leaving many wondering what’s next.
Deep ties with Wall Street
Bessent got his political science degree from Yale back in 1984 and kicked off his career at Brown Brothers Harriman, among other places. He later joined Jim Chanos’s hedge fund, Kynikos Associates. With George Soros being a big client of Chanos, Bessent made the jump to Soros Fund Management in 1991. He spent the ’90s there, climbing the ranks to become a partner and eventually running the London office.
In 2015, he co-founded Key Square Group with Michael Germino, leveraging geopolitical and economic insights for macro investments. The firm secured a $2 billion anchor investment from Soros. As crypto.news reported earlier, Key Square, at its peak, was one of the leading macro hedge funds, though, by 2023, its assets had declined to about $577 million.
Now leading the Treasury, Bessent assumes his role during a critical period, tasked with managing the $28 trillion federal debt and addressing expiring provisions of the Tax Cuts and Jobs Act. While tax policy, inflation, and tariffs dominate his mandate, the crypto industry is watching closely for potential regulatory shifts.
CBDC opponent
Bessent has expressed his support for Bitcoin (BTC), sharing in an interview with FOX News that he’s been “excited about the president’s embrace of crypto” and adding that “crypto is about freedom and the crypto economy is here to stay.”
Moreover, Republican Senator Cynthia Lummis views Bessent as a “crucial ally” in pushing forward her Strategic Bitcoin Reserve initiative, referring to him as a “champion for digital assets.”
However, Bessent’s crypto enthusiasm doesn’t include central bank digital currencies. In his Jan. 16 Senate Finance Committee hearing, Bessent said that the Federal Reserve shouldn’t issue a state-controlled digital dollar.
“I see no reason for the U.S. to have a central bank digital currency. In my mind, a central bank digital currency is for countries who have no other investment alternatives.”
Scott Bessent
Bitcoin holder
Bessent’s actions might say even more than his words. In January, Bloomberg reported, citing the U.S. Office of Government Ethics, that Bessent had up to $500,000 invested in an iShares exchange-traded fund tied to Bitcoin’s price.
Like his assets held through Key Square Capital, Bessent will have to divest the crypto-based ETF to avoid conflicts of interest, as the Trump administration has made it clear that it plans to double down on crypto regulation, with the crypto theme playing a key role in Trump’s presidential agenda.
Earlier in January, an executive order tasked the Treasury and other federal agencies with reviewing and harmonizing regulations affecting the digital asset sector. The order emphasized coordination but stopped short of explicitly mentioning Bitcoin or other specific cryptocurrencies, saying only that the working group “shall evaluate the potential creation and maintenance of a national digital asset stockpile.”
“Within 30 days of the date of this order, the Department of the Treasury, the Department of Justice, the Securities and Exchange Commission, and other relevant agencies, the heads of which are included in the Working Group, shall identify all regulations, guidance documents, orders, or other items that affect the digital asset sector,” the executive order reads.
It’s clear that Trump’s executive orders didn’t exactly impress the crypto community — mainly because Bitcoin didn’t get a specific shoutout. Moreover, there’s plenty of drama in the crypto community about Ripple’s alleged attempts to block the White House’s push for a Strategic Bitcoin Reserve. All this just adds more uncertainty about what Bessent’s next move related to crypto might be.
Timing tension
Bessent’s immediate focus will likely include negotiating the debt ceiling and preparing for the 2025 tax season. The Treasury is also under pressure to finalize its crypto regulatory framework within the deadlines outlined in Trump’s executive order.
However, debates surrounding the direction of U.S. crypto policy and its timeline remain unresolved.
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