Just five years ago, he was describing cryptocurrencies as a "scam" and a "disaster in the making." But only last year Donald tramp has earned nearly $1.5 billion in digital currencies, a financial report released this week showed.
Trump earned money through the family business World Liberty Financial and so-called mim-coins. This is happening at a time when the Trump administration is cutting regulations related to cryptocurrencies.
Trump is not the only one who now allegedly sees the future of finance in cryptocurrencies, digital money that has no physical form and does not depend on banks, but relies entirely on the Internet community. These currencies have value because people believe in them, even when there is no government authority behind them.
Trump made a billion dollars in cryptocurrencies in his first year back in the White House
Politicians who love Bitcoin
U Great Britain, right-wing leader Nigel Farage is facing criticism for receiving five million pounds "as a gift" from crypto-billionaire Christopher Harborne, who lives in Thailand. Farage's Reform UK party, which is poised to take power, is also in favor of encouraging cryptocurrencies.
Last year, Pavel Blazek resigned from his position as Minister of Justice in the Czech Republic after accepting 469 bitcoins (worth about $45 million) from convicted criminal Tomasz Jirikovski. Spanish right-wing MP Luis Perez Fernandez was also accused of taking cryptocurrencies from a convicted fraudster.
Photo: Pixabay/BenjaminNelanFinancial analyst Eliza Lockhart: "Digital money is playing an increasing role in politics."
In Argentina, President Javier Millay, normally pro-Trump, is being targeted by the public and financial institutions for promoting the $LIBRA crypto-scheme. That currency experienced a rise and then a crash, while Milej claims that he did everything in good faith.
How much crypto affects politics
Digital money is playing an increasingly important role in politics, says Eliza Lockhart, a finance and security analyst at the British institute RUSI. Cryptocurrencies are donated to campaign politicians and lobbied to adapt regulations.
"Political influence is growing as cryptocurrency businesses have entered more into the mainstream of finance and authorities are increasingly making decisions about how to regulate the sector," Lockhart told DW.
Edoardo Beretta, professor of macroeconomics at the Swiss university USI, agrees. Although he reminds that the value of bitcoin has halved compared to the peak of October last year, when one bitcoin was paid 126.198 dollars.
"It still doesn't mean that market players have lost interest in crypto - just that their environment has become somewhat quieter," Beretta tells DW.
Is it easier to influence foreign politics?
Cryptocurrencies move easily across national borders. While it is possible to determine that digital money has been deposited, it is difficult to determine who exactly deposited it, Lockhart warns.
Money, he says, can be moved through multiple wallets until it reaches the pockets of politicians or their campaigns.
"It would have to be looked at on a case-by-case basis, but crypto creates a vulnerability that hostile states and other malicious players can exploit," she adds.
Last year's report Chain analysis, which tracks blockchain activity – a kind of record of cryptocurrency transactions – finds that European extremist groups are now increasingly using cryptocurrencies, just like American ones.
This is one of the reasons why Great Britain has introduced a temporary ban on political donations in cryptocurrencies, as Brazil, Ireland or some federal units in the USA have done before.
Are cryptocurrencies going left or right?
It's hard to be precise, but at least in the US during the Trump terms - cryptocurrencies are more attractive to Republicans. Research Center Pew poll found that 22 percent of Republicans invested in cryptocurrencies, while about 17 percent of Democrats did the same.
Photo: AP Photo/Alex BrandonDonald tramp
Crypto isn't just a right-wing thing, Lockhart says, but the industry is actually forging political alliances on the right.
"Because the right prefers financial deregulation and decentralization, and this resulted in the crypto-industry strategically supporting politicians who would encourage more favorable regulations for it," she says.
As for Trump, the White House spokeswoman rejected the possibility that the president is in a conflict of interest, claiming that all businesses - including those with cryptocurrencies - are run by his sons.
But the question is whether politicians should be allowed to make money while at the same time being able to influence the legislative framework by possibly favoring their businesses.
"If the law allows a politician to have an income on top of that of political activity," says Professor Beretta, "then nothing can be done. Unless the law is changed."
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