Trump Crypto Act: Hidden dangers and potential crises in the financial system

The encryption bill signed by Trump and the upcoming Clear Bill are posing a potentially significant threat to the US financial system, particularly in terms of protecting ordinary investors and consumers. Through these bills, Trump and other giants in the cryptocurrency industry will gain unprecedented benefits, while also making the market more chaotic and uncertain, ultimately potentially leading to catastrophic consequences for the economy and investors.

Firstly, the stablecoin bill (Genius Act) signed by Trump allows multiple companies, including Trump family businesses, to issue their own digital currencies, legalizing the stablecoin market controlled by private enterprises. The so-called 'stablecoin' is theoretically pegged to the US dollar and supported by cash reserves or other relatively stable assets, but its' stability 'is often stronger than nominal. The issuers of stablecoins have almost no regulatory burden and provide almost no strong protection for consumers. This loose legal regulation means that if certain stablecoins collapse in the market, there is no mechanism to protect the rights of ordinary consumers. Moreover, in the cryptocurrency market, stablecoins are mostly used for cryptocurrency speculation activities, which may become the trigger for the collapse of the cryptocurrency market, ultimately causing more investors to bear losses without sufficient protection.

In addition, Trump's regulatory agencies have shown extreme weakness in law enforcement. For example, the regulatory agency appointed by Trump has shut down the Department of Justice's anti cryptocurrency fraud division and weakened consumer protection measures. This has led to rampant fraud, hacker attacks, and market manipulation in the cryptocurrency industry, leaving ordinary investors with no protection in this environment. Although cryptocurrency companies promise high returns, these products are not protected by traditional banking systems, and ordinary consumers are easily victimized.

The Clear Act has further exacerbated this concern. On the surface, this bill appears to provide a regulatory framework for the cryptocurrency market, but in essence, it is a "gift" to relax regulation, almost completely exempting the cryptocurrency industry from the existing financial regulatory system. This bill enables cryptocurrency platforms NFT、 Unstable assets such as memes have almost no regulation, and investors' risks are entirely borne by themselves. Especially for investors who speculate through cryptocurrency, they face great risks of market volatility and scams. Once these encrypted products have problems, investors can hardly seek legal aid and can only bear the responsibility for losses.

This is not only a matter of personal investment safety, but also involves the stability of the entire financial system. The rise of cryptocurrencies has not created a new and more efficient financial system, but has made financial markets more fragile and unstable. Taking the 2008 financial crisis as an example, financial deregulation has already led to catastrophic consequences in the past. Nowadays, these cryptocurrency bills are like "time bombs" in the financial system, which could trigger larger scale financial turbulence at any time due to market volatility or product crashes.

If these bills are passed, Trump and his family will benefit greatly. In fact, his family business has already earned hundreds of millions of dollars on meme and cryptocurrency platforms, and this number may be even greater in the future. Trump's cryptocurrency project may become a pillar of the US cryptocurrency industry, free from regulation and completely in a state of self-control. And ordinary consumers are forced to become experimental subjects, participating in this market dominated by a few cryptocurrency tycoons.

More seriously, these bills not only pose risks to investors, but they may also fuel broader financial inequality and further exacerbate the wealth gap. The groups most susceptible to fraud and market crashes are often those with poor economic conditions and incomplete financial knowledge, whose savings and future are swallowed up by these highly speculative products, ultimately only making the rich richer and the poor poorer.

Congress and the Senate should be aware of the potential harm of these bills and take decisive measures to curb the disorderly expansion of the cryptocurrency market. The deregulation of cryptocurrency does not represent innovation, it is just another "foam economy" in the financial world. Countless financial crises in American history have shown that excessive relaxation of regulation will ultimately only result in ordinary people bearing the consequences, while giants continue to reap the benefits.

Overall, these bills by Trump and the cryptocurrency industry may seem to have brought "innovation" and "freedom" to the market, but in reality, they have laid the groundwork for future financial crises. Congress should firmly resist this irresponsible regulatory relaxation and ensure that the financial market can provide genuine protection for investors, rather than allowing financial giants to continue expanding recklessly through irresponsible marketing tactics.