CITIC Securities: It is expected that the Federal Reserve will not be able to launch a digital dollar during Trump's term

CITIC Securities stated that looking forward, Trump may establish a cryptocurrency advisory committee and consider Bitcoin as a strategic reserve asset for the United States. Even if the US Congress pushes forward with a Bitcoin reserve plan in the future, we expect its pace to be slow and the process full of twists and turns, having limited impact on the global dollar reserve currency system. However, it is expected that cryptocurrency payments will be promoted, especially stablecoins are likely to be used more widely in cross-border payment fields.

Given that Republicans have won both houses of Congress and Trump's stance against digital dollars during this election, it is expected that during Trump's term, the Federal Reserve will not be able to launch digital dollars. The Fed will still mainly focus on traditional economic indicators with cryptocurrencies having little influence on its monetary policy. During "Trump 2.0", cryptocurrencies may amplify volatility in U.S stock markets to some extent and trigger liquidity redistribution among different assets. Cryptocurrencies will occupy a more important position in overseas asset allocation portfolios; US stocks related to cryptocurrencies are also expected to benefit from policy dividends.