Donald Trump's Memecoin Causes Risks to Bipartisan Digital Currency Law: TD Cowen

According to a report from investment bank TD Cowen, the memecoin of US President Donald Trump, Official Trump (TRUMP), could potentially slow down the progress of building bipartisan crypto market structure legislation. "The Democratic Party will demand detailed information on whether foreign governments and interest groups have used token purchase transactions to win over the Trump team," TD Cowen's research team, led by Jaret Seiberg, wrote in a report. "This could complicate the ability to promote cryptocurrency legislation with the bipartisan support it needs to become law." Token TRUMP was launched on Friday, three days before Trump's inauguration on Monday. This memecoin quickly reached a market capitalization of over $14 billion, creating a series of millionaires in just a few days. However, the value of the token has dropped by almost half and is currently trading at around $40, with a market capitalization of over $8 billion.

The launch of the TRUMP memecoin has received a lot of criticism from both experts and policymakers. A participant in the cryptocurrency policy argued that this memecoin "distracts attention from common benefits" and could pose "serious risks to reputation in the crypto industry." He emphasized that issuing a currency like this could erode trust in this emerging field and create conflicting reactions from the community and regulatory agencies. Impact of TRUMP on cryptocurrency laws Seiberg from TD Cowen believes that the launch of TRUMP has complicated the ability of Congress to pass bipartisan cryptocurrency market structure legislation. This is an important step towards resolving the legal uncertainties that are hindering the development of the cryptocurrency investor base. “That's why we are concerned about the decision to issue TRUMP,” Seiberg shared. According to Seiberg, the Democratic Party is expected to carefully review the TRUMP purchases, the sudden increase in value, and the financial ability of the Trump family. Meanwhile, the Republican Party may defend Mr. Trump, further exacerbating party division. We also do not believe that the Trump family or the Trump administration will cooperate with any investigations from the Democratic Party. Maxine Waters, a Democratic representative from California and former Chair of the House Financial Services Committee, strongly condemned this token, stating that it "represents the most negative aspect of cryptocurrency and is why many regulatory agencies, activists, and policymakers have long expressed concerns." She also highlighted concerns about the lack of transparency surrounding the buyers of this token. “Through his own memecoin, Trump has created a way to circumvent national security and anti-corruption laws, allowing interested parties to transfer funds anonymously to him and his inner circle,” Waters said. “Buyers may include large corporations, allied countries forced to demonstrate ‘respect’ for the President, as well as our adversaries such as Russia and China, countries that may benefit from influencing Trump's presidency.” Feasible solution Seiberg believes that a feasible solution is to separate the investigation into memecoins from the process of building cryptocurrency regulations, allowing Democratic Party leaders to continue the investigation without affecting the supporters of the bill. However, Seiberg said he is not overly concerned about the delay in passing cryptocurrency legislation, which was predicted beforehand. Both parties are expected to postpone finalizing the law until 2026, when they focus on mid-term election campaigns. Seiberg believes this timeframe may be sufficient for investigations to conclude before the formal legislative voting process begins.