Bitcoin, the world’s most prominent cryptocurrency, emerged in the aftermath of the global financial crisis. In that context, when mistrust of banks, international financial institutions, and governments was rampant, cryptocurrencies surged as part of a critique of the hegemonic economic system. Bitcoin was launched as an alternative currency: a tool that could support peer-to-peer (P2P) exchanges, without the need for intermediaries, through its distributed ledger, the blockchain. Crypto was meant to be a tool for freedom and decentralization.
The initial inspirations for bitcoin were rooted in narratives about fostering direct interconnection between peers and a commitment to privacy and anonymity. They drew on anarcho-capitalist principles that rejected government intervention in the money supply and large financial institutions’ influence in markets. In time, however, bitcoin enthusiasts and the cryptocurrency ecosystem associated with them—new kinds of intermediaries (digital wallets, exchanges) and other projects linked to the blockchain—became heavily reliant on flexible regulations, government incentives, and linkages with the traditional financial system. In addition, the Proof-of-Work (PoW) protocol, which validates bitcoin transactions and allows producers to record a new token in the blockchain, is extremely energy-consuming. As a result, bitcoin relies on large energy infrastructures, often powered by fossil fuels. Its need for an abundant supply of power, preferably with favorable regulations and low and stable prices, makes it a potential threat to climate-change mitigation policies and clean-energy transitions. Despite their anarcho-capitalist origins, bitcoin and the cryptocurrency ecosystem fused with the interests of certain governments. Major cryptocurrency investors and enthusiasts identified opportunities in allying with officials. They began participating in policy discussions and joining forces with political leaders.
Cryptocurrency investors and enthusiasts participate in and feed alternative media circles, spaces that encourage misinformation and conspiracy theories, masculine and white grievance, and general mistrust in public institutions and policies. They also fostered alliances with authoritarian leaders and regimes that have granted individuals associated with cryptocurrency assets unfettered privileges, often with dubious effects or outright negative impacts for the general well-being of their societies. In some instances, such as under the administration of Donald Trump in the United States, the president himself and his family are part of a broader ecosystem of cryptocurrency businesses, where the lines between his political position and his interests as a businessman are blurred.
Notwithstanding their original idealistic inspirations, cryptocurrencies have been a key component in the democratic backsliding witnessed on a global scale in recent years. The imbrication of cryptocurrency and the spread of current authoritarianisms has been largely understated and misunderstood as a set of quirky or obscure anecdotes. But cryptocurrencies are more than a financial fad: they are a constitutive part of contemporary authoritarian policymaking, both as tools to help autocrats centralize power and as mechanisms for the enrichment of incumbents and connected elites.
Mixing Public and Private Interests
During his second presidency, beginning in January 2025, Trump has made headlines with his steadfast support for cryptocurrency and implementation of policies designed to entrench a crypto-economic nationalist agenda. This crypto-economic nationalism goes hand in hand with Trump’s broader view of the economy, privileging tariffs, bilateralism (in opposition to multilateral institutions and agreements), and deregulation. This form of economic nationalism is closely aligned with the interests of the fossil fuel industry, and it increases the power of an emerging techno-oligarchy. The Trump administration has made policy changes that affect the cycle of production, circulation, and valuation of cryptocurrencies to benefit the crypto industry. In turn, Trump-affiliated entities participate in and profit from each of those stages of the industry’s process.
In March 2025, the government created a so-called Strategic Bitcoin Reserve and a US Digital Asset Stockpile. The decision was followed by an immediate increase in the value of the five coins that are part of the reserve. Second, the White House pushed Congress to pass the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act—a bill to regulate and promote the issuing of stablecoins (a type of cryptocurrency that purports to maintain its value equal to one US dollar), while restricting the issuance of a central bank digital currency in the United States. The GENIUS Act passed with rare bipartisan support in both chambers of Congress.
The most important vehicle that connects Trump with the cryptocurrency market is World Liberty Financial (WLF), a crypto platform that also issues its own token. Much like Donald and Melania Trump’s meme coins—risky investment tools designed to reap profits through a quick burst of hype—the Trump family received a large share of these tokens. This stash has soared in value to over $1 billion. WLF could have been a workaround to circumvent legal limitations on contributions from foreign interests to Trump for his 2024 presidential campaign and his inauguration.
Such contributions may pay off for those investors. On his first overseas trip during his new term, Trump was especially deferential to the United Arab Emirates, reportedly among the top contributors to WLF. In May 2025, Trump hosted a dinner at his Virginia golf club for the top 220 holders of the $Trump meme coin, giving special access to individuals who have directly contributed to increasing his personal wealth.
WLF is managed by the president’s sons, together with Chase Herro and Zachary Falkman, two obscure characters with reports of shady business practices in their pasts. Zach Witkoff, the son of Steve Witkoff—the president’s special envoy to the Middle East and negotiator with Russia and Ukraine—is another founder of the enterprise. WLF seeks to operate like a bank (by lending through leveraging cryptocurrency) and establish itself as a juggernaut in the stablecoin business. It has already received investments of over $1 billion for its stablecoin (USD1).
The other major Trump policy linked to the cryptocurrency industry is the Strategic Bitcoin Reserve. This reserve could have significant effects on the global monetary system, potentially pushing volatile assets into the mainstream of government reserves, while further bolstering the valuation of bitcoin and encouraging more bitcoin mining.
Bitcoin installations require ever-increasing energy provision. The PoW protocol, through which a new bitcoin is recorded, extracts large energy supplies from communities and infrastructures that could be better used for local demands, complicating efforts to lower carbon emissions. Bitcoin mines have been branded as high-end “data centers” that promote technological progress and industrial upgrades, but they offer little in terms of jobs or productive linkages with other industries.
The strategic stockpile allows the federal government to keep custody of bitcoins and other cryptocurrencies seized by the justice system in criminal cases. But the need to maintain this stockpile could also push the government to step into the mining business itself, or to directly protect private mining interests.
The Trump Media and Technology Group, whose largest shareholder is Trump himself, announced in May 2025 that it would invest over $2 billion in bitcoin and related securities as part of the corporation’s so-called bitcoin treasury plan. Eric Trump announced his involvement as chief strategy officer of American Bitcoin, a new bitcoin mining firm. Eric and Donald Jr., the eldest Trump sons, hold 20 percent of American Bitcoin’s shares. American Bitcoin and the series of policies that promote bitcoin reserves and mining further entrench the linkages between crypto governance, conventional energy interests, and the US presidential family and administration.
While the connections between crypto and authoritarian governance are becoming increasingly flagrant in the United States, with potential implications for the global economy, the Trump administration is not unique in this respect. Other leaders have created policy tools connecting business interests and the cryptocurrency industry with authoritarian governance.
Crypto Revolution in El Salvador
Trump was described in an April 2025 New York Times report as “not only a major crypto dealer; he is also the industry’s top policy maker.” But he was not the first to be both. Although on a much smaller scale, the pioneer in this area was the president of El Salvador, Nayib Bukele.
Four years ago, Bukele made what many considered to be a revolutionary move—one that seemed to have the potential to improve El Salvador’s development prospects and change the global monetary landscape. In June 2021, Bukele declared bitcoin a form of legal tender at a conference in Miami and submitted a bill to that effect for legislative approval. The bill was swiftly approved by his party’s parliamentary supermajority. Along with members of his family, Bukele was a bitcoin holder and enthusiast.
The government promoted the bitcoin policy as a means to encourage financial inclusion, providing accessible financial tools to people outside the banking sector, as well as development and investment. The law also forced all businesses to accept bitcoin as a means of payment, together with the US dollar. The policy was carried out through the creation of a national wallet called Chivo. The government received a $200 million credit from parliament to finance the project, including a $30 incentive for every Salvadoran who downloaded the Chivo app. Many Salvadorans downloaded the Chivo wallet solely to get the $30 bonus. For many reasons, most users did not continue using the digital wallet after receiving the bonus. The preference for cash among many Salvadorans, coupled with trust issues surrounding the digital wallet, hobbled Chivo’s success. The hasty rollout of the app resulted in technical glitches and security breaches. Fraudulent schemes promising quick, high returns in exchange for personal information proliferated, leading to theft of personal IDs.
Beyond the functionality of the app, concerns have been raised about the governance of Chivo. The company was created by the government with state funds, yet it is considered a private company. Its board of directors, composed of close associates of Bukele, was appointed directly by the government. The company operates as a financial institution, but it is not treated as such by regulators. Instead, it is protected by state secrecy. This strategic ambiguity reflects long-term patterns of Salvadoran elites using state institutions to increase their private wealth.
Long before the United States created a bitcoin strategic stockpile, Bukele was an avid investor in bitcoin as part of government policy. Despite calls for increased transparency and information, it is still unclear how the Salvadoran government has financed Bukele’s continued bitcoin investments, and how these investments affect the management of the country’s foreign reserves.
While encouraging a domestic business coalition that would emerge as a major force among the Salvadoran elite, the bitcoin law also supported international constituents. Bukele has harnessed a narrative of bitcoin—touting it as a symbol of futuristic thinking, disruption, and unparalleled innovation—to define El Salvador’s identity on the world stage. This rebranding centered on cultivating crypto enthusiasts as potential investors in the country, welcoming them with lax regulations and promises of residency and citizenship in return for modest investment commitments.
Crypto enthusiasts have gained enormous influence over Bukele’s government. They were also involved in the experiment of setting up a “bitcoin beach” in the poor coastal town of El Zonte, where the cryptocurrency was introduced by an unidentified angel investor with the aim of creating a “circular” digital economy: people would spend their bitcoin income in the town, and ultimately, digital assets would replace cash and the US dollar. El Salvador’s proactive bitcoin strategy led to a boom in crypto tourism. Some crypto enthusiasts have been involved in land purchases in El Zonte, which has become a surf-crypto hub, as well as in other areas of the country, such as La Unión, where a futuristic bitcoin city was supposed to be built. After failing to obtain sufficient financial support, the project has been shelved. But crypto land grabs continue to affect local communities, bringing land expropriations by the state, soaring land prices, and speculative purchases by foreigners.
In El Salvador, the momentum behind the bitcoin policy dwindled with time, leaving marginalized populations as disconnected from formal financial systems as they were before. In the face of the massive failure of the volcano bond scheme, the government was forced to seek support from the International Monetary Fund in 2024 to continue servicing its debt. The IMF imposed a reform to the bitcoin law, making the asset a voluntary form of payment rather than a compulsory one. The government stealthily pushed the changes through parliament, but it continues to tout the country as a bitcoin haven and to announce bitcoin purchases made with public money.
Foreign supporters of Bukele still praise him as a policy visionary, even as human rights organizations have criticized the arrests of thousands of alleged gang members without due process in his draconian crime crackdown. Crypto enthusiasts were undeterred by the bypassing of constitutional term limits to allow Bukele to run for reelection in 2024. They continue to back him after lawmakers did away with term limits altogether in July 2025.
Bukele visited the White House in April 2025, playing up his friendship with Trump and their shared predilection for employing harsh measures against alleged gang members. Bukele has been a notorious collaborator in the Trump administration’s questionable use of the Alien Enemies Act of 1798 to deport hundreds of migrants without due process to a high-security prison in El Salvador, among other places. But beyond their tough-on-crime similarities, Bukele and Trump are both proven crypto bros and pioneers in the brazen blending of public and private interests in crypto ventures.
Dangers for Autocrats
In 2017, Nicolás Maduro, the authoritarian president of Venezuela, announced the creation of a government-issued cryptocurrency, the petro—the first of its kind. Maduro claimed that the petro was backed by a “commodities basket” of natural resources, including five billion barrels of untapped crude oil from the Orinoco Belt. One petro was set to be worth 60 US dollars, about what an average barrel of oil was worth at the time. The government tried to curb rising inflation by anchoring salaries, cash transfers, and tax rates to the value of the petro.
In addition to the petro’s use as a unit of account, the government created an official wallet, similar to what Bukele established in El Salvador, to distribute social funds in bolívares that were anchored to the fixed value of the petro. Despite being named a digital currency, however, the petro never really functioned as such. Instead, the government hoped to use it as a disguised tool to raise revenue, much as today’s meme coins are used both by private actors and, as in the United States, by government officials and their family members. But the strategy failed, not least due to US-imposed sanctions targeting this digital asset.
Facing sanctions on the oil industry and a deep economic crisis of hyperinflation and dollar scarcity, the government created a regulatory framework and a welcoming environment for crypto investors, launching the National Superintendency of Cryptocurrencies and Related Activities (SUNACRIP). These actions promoted the expansion of bitcoin mining in Venezuela, with government acquiescence and occasional direct support. In 2023, however, the government announced an investigation into a scheme whereby rogue government officials, in coordination with SUNACRIP, used crypto wallets and assets to bypass oil sanctions and sell Venezuelan oil in international markets. Some $3 billion was allegedly embezzled in such transactions. The probe led to the imprisonment of Oil Minister and the superintendent of SUNACRIP, among other senior officials. The scheme may have cost the national oil company, PDVSA, between $16 billion and $21 billion due to diverted oil sales.
The government had turned against one of the tools at the forefront of its fight against sanctions. It reorganized PDVSA and SUNACRIP, as well as the Ministry of Finance, prosecuting dozens of top officials. These investigations point to broader infighting at the top of the state. The government subsequently dismantled the official crypto ecosystem it had fostered for years and started to persecute its participants. It has launched raids to dismantle mining operations.
The PDVSA–crypto scandal, as it is known in Venezuela, is a sign of how the purposeful use of crypto ecosystems can backfire for autocrats. The government was initially inclined to support the cryptocurrency ecosystem in service of its strategic goals. The main goal was to bypass sanctions and facilitate cross-border oil transactions. The expansion of this ecosystem allowed private actors and state officials to build an alternative force within government ranks that could potentially threaten the power of the established elite.
Polycrisis Accelerant
For the past few years, the world has been facing a series of complex crises, from a global pandemic to trade disruptions, wars, climate change, and millions of migrants seeking protection from violence and destitution. Scholars have labeled this situation a polycrisis, where various disruptions and their effects reinforce one another. The rise of authoritarian governance in this context is a sign of a global anti-democratic trend that favors unilateralism, denies climate change, and rejects attempts at social justice. Part of this authoritarian wave includes the endorsement of new financial tools such as cryptocurrencies that conjoin the interests of new elites and tech oligarchs.
In the era of crypto-authoritarianism, elites seek not only to extract benefits from state regulation; crypto bros also angle to wield the levers of power themselves. Reliant on an ecosystem mired in volatility and fraud, and in constant need of energy inputs, the rise of crypto authoritarianism can only be an accelerant of financial, environmental, and political crises.
This is an abridged version of an article published in Current History (2025) 124 (865): 307–313: https://online.ucpress.edu/currenthistory/article/124/865/307/213898/A-New-Age-of-Crypto-Authoritarianism.
