Trump, Crypto and a Billionaire Coup?

Do US Treasury impoundments and crypto pose a threat to the US dollar - the world’s reserve currency?

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As I write, a billionaire is engaged in a power struggle for control over what Abe Newman calls the “nerve centre” of the Federal Government - the Treasury of the United States.

In my view Elon Musk has ulterior motives. Not just to use his entirely illegitimate and anti-constitutional capture of the US Treasury and the

Impoundments of federal funds–that is, refusing to carry out the law that requires the President to spend money Congress appropriates–on a scale orders of magnitude greater than we’ve ever seen. (See Samuel Bagenstos here) .

Not just that. But to wrest control over the Treasury’s payments systems from the public sector. As MSN have reported:

Musk, who owns X, formerly Twitter, has repeatedly expressed a desire to allow X users to make payments on the platform as part of his aim to make X the “everything app.” This week it was reported that X will partner with VISA to help achieve that end.

So does Musk’s

successful efforts (in taking) control of the federal government’s system for issuing payments–for writing checks to individual persons and entities

... mean that Musk has an ambition for the Treasury’s ‘nerve centre’ to be transferred to, and eventually controlled by X?

Beyond that, I would not be surprised if Musk hopes to displace the US Dollar (to ‘denationalise’ the dollar) and to replace the world’s reserve currency with ‘privatised’ cryptocurrencies, that both Musk and Trump are now invested in.

Both are fearsome prospects, but under this administration, entirely plausible.

As it happens, I was just finishing a chapter of the new book on that very subject… So here’s an excerpt that I hope will shine some light on what is going on here….

Trump and Crypto

In September 2024, as he campaigned to win the world’s most politically powerful office, Donald Trump vowed to make America “the world capital of crypto and Bitcoin.” His campaign was helped by the political action committee Fairshake that spent $173 million dollars to elect pro-crypto candidates from both major parties.¹

True to his word on the eve of his inauguration Trump and his wife expressed confidence in crypto by releasing digital memes - $TRUMP &; $MELANIA, reported to add billions of dollars to their combined fortune. By doing so the president helped fuel a speculative mania. Bitcoin surged from about $70,000 before the election to a record high of more than $100,000.²

The only prominent dissident to publicly air concern over President Trump’s endorsement of crypto was a Wall Street billionaire, Paul Singer, founder of ‘vulture fund’ Elliott Management. His company warned in a press release that the “inevitable collapse” of the crypto bubble “could wreak havoc in ways we cannot yet anticipate”.³

Within two days of taking office, and thanks to the ‘mad money’ that is crypto, the U.S. presidency was already more lucrative for Donald Trump than for any president in American history, wrote the senior editor of Forbes magazine.⁴

Three days after taking office, Trump signed a ready-made executive order with a grand title “Strengthening American Leadership in Digital Financial Technology” designed to “support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.”⁵

Joining Trump at the pinnacle of American power in 2025 were crypto billionaires, Wall Street billionaires and Silicon Valley billionaires. They had all dutifully submitted to the power of the US president and had coalesced, as Professor Jackson noted, around an “open, ruthless project of class despotism.”⁶

Why would an elected American president set out to undermine the credibility of the world’s reserve currency – the US dollar – in favour of an alternative favoured by criminals, fraudsters and money launderers? And how did that happen without stirring public concern or alarm?

How and why had governments tolerated and even encouraged the lawlessness of cryptocurrencies?

Above all, how did cryptocurrency ideas about money evolve into the deregulated international financial system of today. ‘The fount and matrix’ of which was the self-regulating market?⁷ A system that has led to obscene levels of inequality both within and between countries, and that has powered the rise of eye-watering wealth?

I will attempt to explain, briefly and in plain language, how simple economic ideas or concepts are at the root of President Trump’s lucrative bet on crypto and monetary turbulence. They are ideas, theories and policies with deep roots in ‘classical’ economic thought and since 1971, have led to recurring financial crises.⁸

They are economic ideas designed to undermine monetary democracy; to de-politicise power struggles over the money system; and to ultimately assert private authority over money.

They are the ideas that built the Global Casino.

Crypto, Power and the economics profession

The growth of digital assets like Bitcoin was powered by the belief that crypto as a commodity (asset) governed only by private authority – i.e. the market - is money. Or as Stefan Eich explains, crypto acts in the mind of its creators as ‘a digital analogue to gold.’⁹ Gold is the metal (or commodity) that orthodox economists have long considered a proper standard of value, and which served for more than a hundred years as the ‘standard’ for money worldwide.

Crypto enthusiasts want a return to the nineteenth century ‘gold standard’.

That is in part why digital currencies are designed to mimic gold. Like gold, they are ‘mined’, in this case by computer power and are alleged to be scarce or limited in number. They function effectively as a speculative asset, but also as money, it is argued. The assumption is made that because digital currencies are like gold they can be traded in private markets, unhindered by regulatory or fiscal authorities and can serve as money.¹⁰

For crypto enthusiasts the removal of democratic political control over cryptocurrencies is an imperative. But the imperative to privatise currencies and remove money from political control is itself a “supremely political act that raises profound questions of legitimacy” as Stefan Eich argues.¹¹

This weekend we have witnessed the beginning of what I believe to be a new phase of the political struggle between the billionaire class and the American people; a movement to ‘de-nationalise’ or de-democratise the monetary system of the United States, and privatise it to serve the interests of the billionaire class.

Watch this space.

Let me end with this quotation from Karl Polanyi, written in 1944 about the events that led up to the catastrophic World War II.

As if the forces of change had been pent up for a century, a torrent of events is pouring down on mankind. A social transformation of planetary range is being topped by wars of an entirely new type in which a score of states have crashed, and the contours of new empires are emerging out of a sea of blood.

Karl Polanyi, Chapter One. The Great Transformation

1. Costas, Mourselas, Financial Times, 30 January 2025. Hedge fund Elliott warns White House isinflating crypto bubble that ‘could wreak havoc.’

2. Costas Mourselas, Financial Times, as above.

3. Costas Mourselas, Financial Times, as above.

4. Dan Alexander, senior editor at Forbes magazine, 22 January 2025. Trump’s Crypto Assets AreNonsense. The Cash They Throw Off Is Very Real.https://www.forbes.com/sites/danalexander/2025/01/22/trumps-crypto-assets-are-nonsense-the-cash-they-throw-off-is-very-real/

5. The White House, 23 January 2025, Presidential Actions. Executive Order. Strengthening AmericanLeadership in Digital Financial Technology. https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/Y

6. Professor Trevor Jackson in the New York Review of Books, 25 January 2025. The UngovernableEconomy. https://www.nybooks.com/online/2025/01/25/the-ungovernable-economy-trevor-jackson/.

7. Karl Polanyi, 1957 p.3. The Great Transformation. The Political and Economic Origins of Our Time.

8. Ann Pettifor, 2006. p 34-43. The Coming First World Debt Crisis

9. Stefan Eich in n Chapter 4, Old Utopias, New Tax Havens: the Politics of Bitcoin in HistoricalPerspective, in Phillip Hacker (ed)et al. Regulating Blockchain: Techno-Social and Regulating Blockchain, as above.

10. Stefan Eich, as above.

11. Stefan Eich, as above.