The US Just Flipped on Crypto!

Mar 04, 2025

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In today’s edition of The Daily Brief:

Crypto’s big paradigm shift
Will CNG survive India’s EV wave?

Crypto’s big paradigm shift

Just last week, the global crypto-currency market was in a shaky place. When Donald Trump won the U.S. presidential election late last year, major coins hit all-time highs — echoing a wave of optimism throughout the market. But then, prices went sideways and slowly began to drop. By last week, they were in a complete rout. Bitcoin, for instance, was almost 25% below its all-time high, which it had just hit a month ago.

And then, Donald Trump instantly turned it all around. In two posts on Truth Social, he proposed five cryptocurrencies that his proposed National Strategic Crypto Reserve would hold: Bitcoin, Ethereum, XRP, Solana, and Cardano.

The price of all those coins shot up instantly:

Now, what does his announcement mean in real terms? We’re not sure. There’s no real legal value to it. These are, at the end of the day, a couple of social media posts — even if those come from the account of the President of the United States. But they do mark another chapter in a stunning regulatory pivot.

See, just a few months ago, the American government was tiptoeing around crypto-currencies. The Biden administration had launched what it called a “whole-of-government” approach to crypto, where different government agencies would come together to create a regulatory system around the asset class. While the administration acknowledged the innovative potential of crypto-currencies, it was also deeply sceptical. The administration’s focus remained on protecting people from crypto.

But when Trump rolled in, he tore up the old playbook. Instead, he’s thrown the entire might of his administration behind crypto. That’s what we’re going to talk about today.

The Biden approach

The Biden administration’s entire approach to crypto-currencies could be summarized in one word: caution. It wanted to adopt the new ideas that crypto-currency had brought in and fit them into the old financial system — while clamping down on its overall Wild West attitude.

Biden appointed Gary Gensler to chair the US Securities and Exchange Commission — America’s securities regulator. Gensler took an aggressive stance on the crypto industry, making him the industry’s biggest enemy. Crypto tokens were, to him, a “security” — much like stocks and bonds — and that was precisely what the SEC regulated. To issue a token to the public, therefore, you needed the SEC’s permission, and anything you did after that came under its purview.

He did so based on an old Supreme Court case from 1946: SEC vs. Howey. The context of that case was very different. It had to do with creative contracting over orange orchards — where it wasn’t clear if people were buying Howey’s land or a share in his orange-growing business. The Supreme Court had said, then, that if you invested in something with the hope of making money from someone else’s effort, you would have invested in a ‘security’. And as a result, the SEC would have jurisdiction over it.

Gensler took this principle and applied it all across the crypto world. That gave the SEC the ability to police crypto transactions of all kinds. The regulator launched dozens of investigations against crypto figures and companies, imposing more than $6 billion in penalties. Soon, he was investigating the who’s who of the crypto world — from Coinbase, America’s largest crypto exchange, to OpenSea, its largest NFT exchange, to issuers like Ripple Labs, who came out with XRP tokens.

The Biden administration was open to the technology underlying crypto-currencies, however. He tasked his Federal Reserve with creating an official digital crypto-like Dollar — a ‘Central Bank Digital Currency’ (CBDC) — which would be issued by the US government but would have the efficiency of a cryptocurrency. The SEC, under Biden, also permitted major financial institutions to set up ETFs that would track Bitcoin and Ethereum.

Biden’s version of the crypto world, in essence, was a safe but boring one. In his world, the government and financial institutions that led the old economy would bring continuity and predictability to the world of digital currencies.

And then, Trump came and set it all alight.

Trump’s rejig

Throughout his electoral campaign, Trump had set himself up as a champion of the crypto industry.

He retained that stance when he became President. As soon as he entered office, he signed an ‘Executive Order on Digital Assets’. It banned the development of a CBDC — gutting Biden’s old project — and threw the weight of the American government behind cryptocurrencies. Importantly, it suggested that the government would work to set up a strategic crypto-currency reserve.

Gensler left office along with Biden. In his place, Trump has nominated Paul Atkins — a lawyer and noted crypto-currency advocate — to run the SEC. While Atkins’ appointment hasn’t been confirmed, the SEC has already walked back many of its enforcement measures. It dropped its suit against Coinbase and halted investigations against major crypto entities like Gemini, Opensea, and Uniswap. More controversially, the SEC also paused its price manipulation suit against Justin Sun, the colourful character who launched the coin Tron. Interestingly, Sun had invested $75 million into World Liberty Financial, a crypto company run by Trump.

This wasn’t Trump’s only crypto foray, by the way. The day before he stepped into the presidency, he launched his own OFFICIAL TRUMP coin. His wife soon followed suit, launching her own OFFICIAL MELANIA coin. These were both meme coins — coins that had no value but for being a pop culture object.

Soon, the SEC released a statement basically arguing that meme coins were outside its reach. Relying on the old Howey case, it said that nobody who invested in a meme coin had any expectation that they would make a profit. And so, these coins weren’t securities. They were closer to collectibles — somewhat like Pokemon trading cards.

In just two months, the American government went from prosecuting crypto entities to actively cheering them on. In fact, to cement this shift, he’s holding the first White House Crypto Summit this Friday. That is a full-blown celebration of the technology.

And now, Trump’s newest announcements highlight that the American government will not only stop regulating crypto — it might soon invest in crypto itself.

What do we know about the strategic reserve?

The idea of a strategic cryptocurrency reserve has been around for at least a year. And the US federal government is hardly alone in this project. Twenty-one American states are looking at state-level investments into crypto-currencies. Some are trying to pass laws for state-level crypto reserves. Others have invested pension money into crypto-currencies:

But despite the popularity of the idea, there’s very little that we actually know about it.

For one, why should America — or any country, for that matter — set up a crypto-currency stockpile? There isn’t a clear justification for one from the Trump administration. Some commentators talk about how holding crypto-currencies could help you hedge against inflation or against economic uncertainties — in the way that Gold does. Others point to how this could show the crypto industry that America supports financial innovation, giving the industry a ‘green light’ to carry on. There’s also a geopolitical angle here: the United States doesn’t want other countries to gain control of any cryptocurrency — because anyone that owns the majority of a network can write its rules. But all of that said, we don’t have an official reason.

We aren’t even sure of what such a reserve would actually look like. Our only clue comes from the BITCOIN Act — a law that Republican Senator Cynthia Lummis introduced last year, which failed to get through Congress. Under that law, the American Treasury would establish Bitcoin vaults. It would then purchase a million Bitcoins over five years. Once purchased, it would have to hold them for at least 20 years. Meanwhile, any extra Bitcoins American law enforcement seized anywhere would be added to the reserve. We aren’t sure if Trump is trying the same thing or if his approach will be different.

The simplest version of this reserve is fairly easy to pull off. Wherever American officials take someone’s crypto — from terrorists, drug cartels, or wherever else- they can just hold on to them in one reserve. That’s completely within Trump’s powers, but it isn’t very ambitious.

In a more convoluted version, however, the American government would actually go to the market and purchase crypto. That is harder to pull off. Technically, the American President doesn’t have the power to direct how taxpayer money will be used. Congress alone has that power.

But there’s one way he can go around it, if he wants to bully his way through — which is something he certainly has the stomach for. The US Treasury has something called an ‘Exchange Stabilization Fund.’ That’s a little like our foreign reserves. While it’s meant to hold foreign currencies and assets like gold, Trump might just push it to hold crypto as well.

The bottomline

For now, this is mostly political theater. Trump’s crypto reserve remains an idea without a clear framework. When it will materialise, and how it might finally look, are still uncertain. There are big legal hurdles ahead, and the economic rationale for the idea is rather murky.

But one thing’s clear: With the new administration coming in, crypto has crossed some sort of threshold. America’s entire approach to crypto, in just two months, has shifted dramatically. The world’s biggest obstacle to crypto is now actively promoting it. Whether Trump’s strategic reserve materializes or not, the mere fact that a sitting U.S. president is openly championing crypto signals a fundamental shift. And if the U.S. moves forward with integrating crypto into its strategic reserves, other nations may feel compelled to follow.

Meanwhile, when crypto began, it was a fringe asset class held by anti-government technophiles. It is being woven into the heart of American economic policy. This is a monumental shift. It might set many dominoes tumbling behind it — ones we can’t foresee just yet.

Will CNG survive India’s EV wave?

India’s green transition is caught in limbo. While we’re trying hard to adapt to renewable sources of energy, more than half of our energy mix still comes from dirty, polluting coal. Sadly, setting up solar plants or wind farms to power the homes of more than a billion people isn’t something that we’ll manage overnight.

We need something to ease us into the transition — which works reasonably well with our old, fossil-fuel-based infrastructure but limits the damage we do to our environment while we set up the green infrastructure we need over the coming decades. A crucial piece in this transformation is natural gas, particularly Compressed Natural Gas (or CNG).

The Indian government sees natural gas as a vital element in its strategy to reduce dependence on imported crude oil. It’s also a useful intermediate step to combat the dangerous levels of air pollution that plague many Indian cities. At the moment, natural gas currently makes up about 6.4% of India's primary energy mix — relatively tiny compared to sources like coal and oil. By 2030, the government wants natural gas to reach almost twice that level — at 15% of the country’s energy mix.

But there are challenges in this vision: like our import dependency, our severe infrastructure bottlenecks, and growing competition from other technologies — such as electric vehicles. In the face of these problems, is moving CNG a real solution? Or is it a temporary solution that will soon fade?

In today’s story, we’ll talk about how CNG has been steadily growing in popularity across India. We’ll look at the real-world challenges it faces and what the future might hold for this increasingly important fuel.

The remarkable rise of CNG

Although India is lagging in its adoption of natural gas, CNG has performed exceptionally well. With strong government backing through policies and subsidies, combined with growing consumer awareness of both its economic and environmental benefits, CNG adoption has accelerated rapidly over the last decade.

In 2016, for example, there were about 2.6 million CNG vehicles on Indian roads. By 2025, we had thrice as many — with 7.5 million CNG vehicles, the segment had seen a robust growth rate of 12% per year. Recent data from January 2025 confirms this strong momentum, with CNG cars showing the highest growth among all fuel types — at an impressive 50% year-over-year increase.

Several major factors have contributed to this remarkable growth:

First, CNG is cheap. Costs naturally play a big role in people’s purchasing decisions, and CNG is an out-and-out winner. CNG can be almost half the price of petrol. And so, auto-rickshaw drivers, taxi owners, and anyone else who drives every day can save a lot of money by switching to CNG.

Second, government policies have nudged people to pick CNG by offering certain subsidies and tax benefits.

Third, CNG is increasingly becoming easy to access. While it used to be tough to find CNG stations even a few years ago, India now has over 7,400 stations, spread across big cities as well as smaller ones. As a result, the congestion at fuel stations has halved, making it a lot more convenient to use CNG.

And fourth, car-makers have responded to all this demand by creating a variety of CNG models. A few years ago, your choices for a CNG car might have been very limited. Now, you’ll find more than 30 different CNG variants — across the categories of small hatchbacks, bigger sedans, and commercial vehicles. Moreover, technological advancements in CNG vehicles, such as improved fuel efficiency and lighter tanks, are enhancing the appeal of CNG vehicles.

This surge in CNG is re-shaping India’s vehicle mix:

Cars: Around 10-20% of newly sold passenger vehicles now run on CNG, a figure that’s grown noticeably in recent years.

Large commercial vehicles: Public transport, including city buses and commercial vehicles like trucks, also rely on CNG to reduce fuel costs and cut down on pollution. Buses and commercial vehicles (like trucks) currently have a CNG penetration of 10-11%, and this is growing as fleet owners look to save on fuel costs.

Auto-rickshaws: Auto-rickshaws make for one of the biggest user bases of CNG. Right now, 28-29% of auto-rickshaws use CNG as their main fuel.

On the other hand, there are two-wheelers, like scooters and motorcycles, which haven’t made as much of a shift to CNG yet. They still face challenges with fitting a CNG tank and finding enough stations for refuelling, though there are still small signs of progress on these fronts.

The challenges CNG faces

With all that said, even though CNG is on a steady rise, it still has some obstacles:

Costs:

A big challenge in CNG adoption is the cost of the gas itself. India imports more than half of its CNG, and its project of adopting CNG vehicles is vulnerable to global shocks outside our control.

The Indian government historically would manage CNG price through its ‘Administered Pricing Mechanism (APM)’. It would set prices for certain fuels, including domestically produced gas. This price would usually be lower than global gas prices and would shield Indian consumers from global price swings. Until recently, a good chunk of CNG came from this price-controlled domestic supply. Imports, though, would stay outside its purview.

In January 2025, though, the portion of APM gas that went to CNG suppliers was reduced. As a result, CNG suppliers had to buy more expensive imported gas, raising CNG prices by a few rupees per kilogram — cutting down its cost advantage over petrol. The government could cut its APM allocations further, and as CNG becomes less competitive, its adoption may slow down.

Competition from EVs:

While the Indian government has been pushing CNG vehicles, it’s also gunning for a rival technology: electric vehicles (EVs). Different states have announced subsidy programs for EVs — especially for three-wheelers, which were the most enthusiastic adopters of CNG.

There’s an inherent contradiction in these rival government incentives. They create an uncertain landscape — where people aren’t sure if their CNG investments will pay off, or if those investments will remain stranded.

EVs are a key competitor to CNG vehicles — with important pros and cons. EVs have lower running costs over time. At the same time, they need dedicated charging stations and often have a higher initial purchase price. Despite these hurdles, EVs have been catching on: electric car sales grew by 32% in January 2025 — although that’s still slower than the growth in CNG vehicles. Electric two-wheelers are also quickly becoming more popular.

As the EV ecosystem matures, they might become cheaper, even as battery lives go up. If that were to happen, they could outcompete CNG vehicles in key segments.

Infrastructure:

The level of CNG infrastructure plays a big part in deciding how fast CNG can grow.

Although there are many more CNG stations today than before, many cities still lack enough stations, leading to long queues. Building more stations and extending gas pipelines takes time and comes with hefty capital costs. Also, the supply of natural gas itself can be volatile, especially when prices go up on the global market.

Despite all these hurdles, the government is keen to see CNG flourish. It’s trying out a series of measures that could sustain CNG growth. For instance, it has mooted bringing natural gas under the Goods and Services Tax (GST), which would lower taxes and thereby reduce operational costs. It’s also offering incentives for commercial vehicles, which could help keep CNG affordable and more widely available. As more pipelines and stations reach underserved parts of India — especially in major southern and eastern cities like Chennai, Hyderabad, and Kolkata — CNG demand could go up even faster across the country.

The two big questions

Overall, CNG is on the path to becoming a success story for India’s transport sector. It provides a fuel option that’s cheaper for everyday people and businesses, and it helps cut down on the harmful air pollution from fuels like petrol and diesel. The impressive 50% year-over-year growth in CNG car sales in January 2025 shows that many Indians see CNG as a reliable and economical choice.

But that said, there are challenges along the way. While CNG is a clean, cheap alternative fuel today, India’s energy mix is evolving rapidly. We aren’t really sure of what CNG demand will look like after 2030. For all we know, CNG could be relegated to a niche fuel rather than a dominant transition solution. Two questions determine its long-term fate:

Will natural gas remain affordable? If imports rise and APM gas allocations shrink, CNG could lose its cost advantage, making it less attractive.

How fast will EVs scale? If charging infrastructure improves and battery prices drop, EVs could overtake CNG in the next decade.

If gas prices rise too much or if electric vehicles become dramatically cheaper and easier to charge, CNG’s growth might slow down. For now, though, CNG is very much at the heart of India’s push for a cleaner and more affordable transport future.

Tidbits

Hindustan Zinc, a Vedanta Group firm, plans to double its metal production from 1.1 MTPA to 2 MTPA by 2030, driven by rising demand from India's steel and infrastructure sectors. The company reported a 32% YoY increase in consolidated net profit to ₹2,678 crore for Q3 FY25, up from ₹2,028 crore in the same period last year.
Adani Group has revived plans to invest $10 billion in U.S. energy security and infrastructure projects, potentially creating 15,000 jobs, following Donald Trump’s re-election. The move comes as U.S. authorities escalate investigations into Gautam Adani, with New York prosecutors unsealing bribery charges in November and the U.S. SEC probing a securities fraud case. Adani Group has denied the allegations, calling them “baseless.”
The Indian government has approved ₹1.22 Lakh Cr., or 97% of the ₹1.25 Lakh Cr. allocated under the Special Assistance scheme for FY25, which provides interest-free loans for 50 years to states. Originally allocated ₹1.50 Lakh Cr., the amount was revised downward in the latest Union Budget. Of the approved funds, ₹55,000 crore is distributed based on states’ share of central taxes, while ₹95,000 crore is linked to reforms, including tourism development, vehicle scrappage, and industrial growth.

- This edition of the newsletter was written by Pranav and Anurag

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