In a stunning development, President-elect Donald Trump is reportedly on the verge of nominating Scott Bessent, a hedge fund manager and vocal cryptocurrency proponent, as his pick for Treasury Secretary. If confirmed by the Senate, the next person whose signature will grace U.S. paper currency will be a fan of the digital currency ecosystem created to replace the conventional financial system.
Macro Investor with Soros Ties Embraces Crypto
Bessent heads Key Square Group, a macro investment firm. He worked for famed investor George Soros three decades ago and was, according to the Wall Street Journal, “one of the driving forces” behind Soros Fund Management’s famous bet that netted a profit of more than $1 billion on the crash of the British pound.
Now, Bitcoin (BTC) and crypto at large are in his sights. “I’ve been excited about [Trump’s] embrace of crypto and I think it fits really well with the Republican Party, their ethos. Crypto is about freedom and the crypto economy is here to stay,” he said in a Fox Business interview in July. “Crypto is attracting young people, people who have never participated in markets.”
Betting on Bessent
Traders on Polymarket had wagered he was a favorite. At one point, Cantor Fitzgerald CEO Howard Lutnick, who has also dabbled in digital assets by helping stablecoin issuer Tether manage its massive reserve of U.S. Treasuries backing its USDT token since 2021, was also seen as a contender but ultimately landed the Commerce Secretary role instead.
Scott is a visionary who understands the transformative potential of cryptocurrencies and blockchain technology. His appointment would be a game-changer for accelerating crypto adoption and shaping sensible regulations.
– According to a source close to the transition team
Regulatory Reckoning on the Horizon?
If confirmed, Bessent would take the reins at a critical juncture for the crypto industry. Regulators worldwide are grappling with how to oversee the burgeoning sector, with concerns ranging from consumer protection and financial stability to illicit finance and environmental impact. Many in the crypto community hope that having an advocate in such an influential role could help steer policy in a more innovation-friendly direction.
- Crypto-friendly CFTC chair seen as positive for bitcoin ETF approval prospects
- Stablecoin regulations a likely priority to shore up confidence post-TerraUSD crash
- Tax guidance clarity crucial as IRS ramps up enforcement on digital asset gains
However, critics worry that Bessent’s close ties to the industry could lead to conflicts of interest and lax oversight. Progressive Democrats in particular have sounded the alarm about regulatory capture and the revolving door between government and the sectors they oversee.
Forging a New Financial Future?
Ultimately, Bessent’s nomination heralds a new chapter in the complex relationship between cryptocurrencies and the state. Having an industry ally in charge of the Treasury, which encompasses key regulators like the IRS, FinCEN, and the OCC, is a significant coup for crypto advocates who have long felt stifled by what they see as antiquated regulations ill-suited for the digital age.
Whether Bessent’s tenure will usher in a golden age of crypto innovation or a deregulatory race to the bottom remains to be seen. But one thing is certain: the intersection of blockchain and bureaucracy is about to get a lot more interesting.
