The Return of Neoliberalism and the Rise of Web3

This week, just two days before officially taking office as president, Trump personally issued a cryptocurrency that surged by up to 400 times within just a few days, attracting widespread attention and discussion. This phenomenal event marks the official return of American neoliberalism, where survival of the fittest and reckless growth will become the main theme of this new era. Against the backdrop of deregulation, Web3 is likely to carry the banner of financial innovation in America’s new cycle.

Reviewing the development of mainstream economic theories in American history, it is evident that this is an ongoing exploration of the relationship between government and the market. Influenced by different historical events, policies have continuously oscillated between government intervention and market freedom. The important phase of Trump's worldview formation coincided with the downturn of Keynesianism in the 1970s, and the United States emerged from difficulties thanks to Reagan's implementation of neoliberalism. Therefore, it is not difficult to understand that Trump hopes to make America great again through similar strategies.

According to Trump, the Democratic Party's economic policies have resulted in three issues: massive fiscal stimulus and quantitative easing have led to a debt crisis; protection of the high-tech industry has caused resource misallocation; and government intervention has exacerbated unfairness. Therefore, before taking office, Trump issued a cryptocurrency, intending to set the tone for Web3 to become the core of a new round of financial innovation in the deregulated supply-side reform.

There are several benefits to doing this: it can bypass the constraints of interest groups in traditional finance; the decentralized nature of Web3 aligns with neoliberal ideals; it helps maintain the hegemony of the US dollar; and it can circumvent the financial policy restrictions of other countries. Of course, this will also bring about higher systemic financial risks and a widening wealth gap, among other negative impacts, but the manifestation of these risks requires some time.

In the next two years, financial innovations based on Web3 and traditional American industries are worth continuous attention. Although there are risks, this is likely to become an important engine of a new round of economic growth in the United States.