Donald Trump has warned that China could gain control of the global crypto sector as the US delays major market rules. The president stressed that America must protect its leadership in digital assets while lawmakers struggle with the CLARITY Act. His remarks add pressure on Congress as negotiations continue over regulations, ethics rules, and illicit finance provisions.

Trump Links Crypto Leadership to US National Strategy

Trump has placed cryptocurrency among the technologies that could shape America’s economic position in coming years. He also compared the strategic importance of crypto with artificial intelligence and urged the US to maintain leadership. Meanwhile, his administration continues to promote digital assets as an important part of the American technology sector.

The president warned that China could strengthen its position if the US slows crypto development. He also pointed to growing competition among countries seeking greater influence over emerging digital technologies. Therefore, Trump argued that restrictive policies could weaken America’s position while other nations expand their crypto industries.

Trump has also defended his administration’s approach toward digital asset regulation and innovation. He argued that excessive restrictions could discourage new businesses and push technological activity toward foreign markets. However, lawmakers continue to debate how the US should balance innovation with stronger safeguards across the crypto sector.

Clarity Act Faces Continued Senate Delays

Trump’s comments arrive as the CLARITY Act remains stalled in the US Senate. The market structure bill seeks to establish clearer rules for digital assets and define responsibilities across federal regulators. However, lawmakers have yet to resolve several major disputes surrounding the legislation.

Senate negotiations have focused on ethics requirements, illicit finance measures, and other provisions within the bill. These disagreements have slowed progress and reduced the chances of an immediate floor vote. At the same time, lawmakers continue working on changes that could secure broader support for the legislation.

The delay creates another challenge for Trump’s broader crypto agenda and his push for American leadership. A prolonged legislative process could leave the industry without a comprehensive market structure framework. Meanwhile, competing jurisdictions could use regulatory clarity to attract crypto companies, capital, and blockchain development.

Trump Challenges Ethics Concerns Over Crypto

Trump has also criticized proposals that could restrict his participation in crypto-related businesses while serving as president. The ethics debate has become another issue within the wider negotiations surrounding the CLARITY Act. Lawmakers have considered measures designed to address potential conflicts involving public officials and digital asset interests.

The president has indicated that his businesses remain under his family’s management during his administration. He has also said that he does not discuss government matters with his children. Consequently, Trump maintains that the ethics provisions should not prevent the US from advancing its digital asset sector.

The debate now combines regulatory policy, national competition, and ethics concerns around crypto. Trump continues pushing for US leadership, while Senate lawmakers seek agreement on the CLARITY Act. As negotiations continue, the final legislation could shape how America regulates crypto and competes with China in digital technology.

Bitcoin Improvement Proposal (BIP) 110 has entered its mandatory-signaling window, but miners are signaling support at a fraction of the level needed to credibly move the network to a new consensus regime. According to a BIP-110 monitor, support was present in just 51 of the 2,016 blocks preceding block 961,632—about 2.53%—far below the 55% threshold required for early activation.

As of block 961,632, nodes enforcing BIP-110 started rejecting blocks that do not set version bit 4. Ordinary Bitcoin nodes, however, continued to accept both signaling and non-signaling blocks. A smaller “BIP-110 branch” appears to have emerged, but it quickly fell behind the chain that most miners are extending.

Key takeaways

• Miners signaled BIP-110 support at about 2.53% in the run-up to block 961,632, well under the 55% early-activation requirement.
• Starting at block 961,632, enforcement nodes reject blocks missing version bit 4, while non-enforcing nodes still accept them.
• A minority enforcing branch formed but has not gained sufficient momentum to become the dominant chain.
• BIP-110 aims to impose temporary limits on transaction/script and data sizes to curb non-monetary on-chain bloat, especially inscriptions.

Mandatory signaling begins, but the signal is weak

The core mechanics of BIP-110’s current phase hinge on miner signaling through version bit 4. During the defined mandatory-signaling window—blocks 961,632 through 963,647—nodes enforcing the proposal apply stricter rules: they reject blocks that do not carry the expected signal. The monitor data indicates that support during the prior 2,016-block period was too low for a sustained competitive chain to plausibly form.

Because the dominant chain is still being extended without broad signaling, the long-term viability of any rival branch depends on whether miners materially increase their participation. With limited support, a BIP-110 branch would at best advance slowly and could stall if miners continue extending blocks that enforcement nodes will not accept.

This is why the milestone matters beyond the immediate block height: it tests whether a contentious consensus change can move forward—or meaningfully alter behavior—without broad miner backing. That dynamic also raises the risk of an operational split: enforcing nodes could follow a chain that enforces BIP-110 rules, while the majority chain continues to follow the default rule set.

BIP-110’s proposed restrictions target on-chain data growth

BIP-110 was drafted by pseudonymous developer Dathon Ohm and is designed to introduce additional consensus restrictions intended to last roughly one year. The proposal focuses on constraining how much data different parts of a transaction can carry, including limits on output scripts and specific data-bearing elements.

In broad terms, it would:

• Limit most new output scripts to 34 bytes.
• Cap OP_RETURN outputs at 83 bytes.
• Restrict certain data pushes and witness elements to 256 bytes.
• Temporarily limit several Taproot-related features.

Importantly for users and wallet developers, outputs created before activation would be exempt from the new restrictions. Supporters of BIP-110 argue that these constraints would reduce incentives for inscriptions and other non-monetary data patterns that increase storage and bandwidth demands on node operators.

Criticism centers on network division and rule mismatches

Not everyone agrees that limiting data sizes is the right path. Critics—including Strategy Executive Chairman Michael Saylor and Blockstream CEO Adam Back—have argued that BIP-110 could divide Bitcoin and lead to situations where some nodes reject transactions that are permitted under the network’s existing rules. Earlier coverage from Cointelegraph highlighted their concerns in an article titled “Bitcoin leaders Michael Saylor and Adam Back rebuff BIP-110 proposal.”

The enforcement model during the signaling window heightens that concern. With enforcing nodes refusing non-signaling blocks, the network’s practical behavior can diverge even before a proposal’s restrictions fully take effect. This raises a key question for participants: whether the enforcement boundary will remain a technical footnote or become a persistent source of disagreement over block space usage.

Timing details and a discussed fallback

BIP-110’s deployment schedule defines several important points:

• Block 963,648 marks the beginning of its locked-in state.
• Block 965,664 is when the transaction restrictions would begin to take effect.

The version-bit mechanism is also a centerpiece of the proposal’s strategy. BIP-110 uses version bit 4 for miner signaling, with the mandatory-signaling window already underway. The current miner support level—about 2.53% in the monitor’s measured period—suggests that early activation is not likely to happen without a sharp change in miner behavior.

Separately, BIP-110 proponents have discussed contingencies. On Aug. 1, Bitcoin developer Chris Guida rebased preliminary code for a proof-of-work change originally written by Bitcoin Knots maintainer Luke Dashjr. Guida later described the code as a contingency if miners opposed BIP-110, though he did not set an activation date at the time.

While that fallback discussion does not change the current signaling reality, it underlines the central tension of the moment: supporters want a path to limit certain on-chain data behaviors, while opponents worry about the consequences of contentious rule enforcement in a system that relies on miner consensus and network-wide agreement.

Going forward, readers should watch whether miner signaling meaningfully climbs as the locked-in and effect windows approach. If signaling remains low, the conflict could stay confined to a small enforcing subset; if it rises, the schedule could accelerate a much broader—and more operationally significant—change in what blocks are accepted.

Bitcoin Improvement Proposal 110 (BIP-110) has entered its mandatory-signaling phase, but miners have sent the required signal in only a small fraction of recent blocks—raising doubts about whether the contentious ruleset can gain enough support to sustain a rival chain.

According to a BIP-110 monitor, at block 961,632 on Saturday miners signaled support in just 51 of the preceding 2,016 blocks, equivalent to 2.53%. That falls well below the 55% threshold the mechanism expects for early activation. While nodes enforcing BIP-110 began rejecting blocks that did not set version bit 4, standard Bitcoin nodes continued accepting both signaling and non-signaling blocks—creating a potential split between enforcing and non-enforcing participants.

Key takeaways

• BIP-110 moved into a mandatory-signaling enforcement window at block 961,632, with enforcing nodes rejecting blocks lacking version bit 4.
• Miners signaled only 2.53% of the time in the preceding 2,016 blocks—far under the 55% level referenced for early activation.
• A BIP-110-compliant minority chain briefly emerged but quickly lagged behind the dominant chain.
• The proposal aims to temporarily restrict on-chain data to reduce storage and bandwidth pressure, but critics warn it could force rule-divergent behavior across the network.

Mandatory signaling begins, but miner participation stays low

The immediate consequence of BIP-110’s start is procedural and practical: once block 961,632 was reached, nodes enforcing the proposal began applying stricter block acceptance criteria. Specifically, they reject blocks that do not set version bit 4 in their block version field.

By contrast, ordinary Bitcoin nodes continued following the existing consensus rules, accepting blocks regardless of whether version bit 4 was set. That difference matters because it turns a signaling experiment into an enforcement stress test—one where participants can end up on different views of “valid” blocks depending on which rules they choose to enforce.

The BIP-110 monitor data also suggests the enforcement did not immediately attract sufficient miner support to sustain momentum. With only 51 signaling blocks out of 2,016 before the window began, proponents would need a significant change in miner behavior to avoid a situation where a BIP-110 branch advances slowly—or stops producing blocks—while the non-enforcing majority chain continues.

What BIP-110 is trying to change on-chain

Written by pseudonymous developer Dathon Ohm, BIP-110 proposes additional consensus restrictions that are intended to last for roughly one year. The proposal is designed to target the way Bitcoin scripts carry data, particularly where large payloads increase the workload for network participants.

In broad terms, BIP-110 would:

• Limit most new output scripts to 34 bytes.
• Cap OP_RETURN outputs at 83 bytes.
• Restrict certain data pushes and witness elements to 256 bytes.
• Temporarily limit several Taproot-related features.

The proposal also includes an exception for legacy outputs: unspent transaction outputs created before activation would not be affected. That detail is important because it reduces the risk of instantly “breaking” already-existing UTXOs, shifting the impact toward new transaction construction after the proposal takes effect.

Supporters have argued that these limits would discourage practices they view as non-monetary—such as inscriptions and other uses that can increase storage and bandwidth costs for node operators. The proposal’s framing is that congestion and resource pressure should be addressed at the consensus level, rather than relying on voluntary policy restrictions.

Why the current phase tests a contentious consensus change

Mandatory-signaling windows are designed to show whether miners are willing to align their blocks with a new ruleset. In this case, the numbers are stark: 2.53% signaling in the monitored window preceding block 961,632 implies that miners are not broadly coordinating around BIP-110.

The result is a practical dilemma for supporters: without a substantially higher share of miner participation, an enforcing chain may struggle to grow. The source notes that a minority branch did appear but quickly fell behind the dominant chain, underscoring how difficult it is to maintain a separate chain when the majority of block production does not follow the same rule signals.

This is also where the proposal’s broader network implications come into focus. If enforcing nodes reject transactions or blocks that non-enforcing nodes accept, a consensus disagreement can emerge—not necessarily as a permanent fork, but as a period in which participants experience different validity rules.

The milestone is therefore less about whether BIP-110 is “right” in principle and more about whether supporters can make a contentious consensus change real without broad miner backing. If that coordination fails, the episode may still be valuable as a signal of how powerfully miner alignment is required for soft-fork style proposals that rely on version-bit signaling and enforcement behavior.

Pushback from major voices and a possible fallback path

The proposal has faced strong criticism from prominent figures in the Bitcoin ecosystem. The article notes that Strategy Executive Chairman Michael Saylor and Blockstream CEO Adam Back argued that BIP-110 could divide Bitcoin and lead nodes to reject transactions that the network’s existing rules would otherwise permit. Earlier coverage on Cointelegraph also highlighted the ongoing dispute around spam and data-heavy usage of block space.

On the technical timeline, BIP-110’s deployment schedule uses version bit 4 and assigns block numbers to key states. The mandatory-signaling window runs from blocks 961,632 through 963,647, during which enforcing nodes reject blocks that do not include the signal. The specification then defines block 963,648 as the beginning of its “locked-in” state and block 965,664 as the point when its transaction restrictions take effect.

The source also points to discussions of a wider contingency. On Aug. 1, Bitcoin developer Chris Guida rebased preliminary code for a proof-of-work change originally written by Bitcoin Knots maintainer Luke Dashjr. Guida described the code as a contingency if miners opposed BIP-110, while stating that no activation date had been set. The details underscore that supporters and builders have considered alternatives if the signaling track does not achieve the needed coordination.

For now, however, the immediate reality is that the signaling signal is weak, and the cost of running enforcement rules without matching miner behavior is that compliant blocks may not keep pace with the chain produced by the majority.

Going forward, investors, traders, and node operators should watch how miner signaling evolves across subsequent windows, whether the enforcing chain continues to lag or disappears entirely, and whether developers continue to refine any contingency approaches if consensus support remains fragmented.

Bitcoin Improvement Proposal 110 entered its mandatory-signaling phase at block 961,632 on Saturday, with miners signaling support in just 51 of the preceding 2,016 blocks, or 2.53%, well below the 55% threshold required for early activation, according to the BIP-110 monitor.

Starting at block 961,632, nodes enforcing BIP-110 began rejecting blocks that did not set version bit 4, while ordinary Bitcoin nodes continued accepting both signaling and non-signaling blocks. A minority BIP-110 branch subsequently emerged, but quickly fell behind the dominant chain.

The low signaling rate makes a sustained rival chain unlikely without substantially greater miner participation. With relatively little mining support, a BIP-110 branch could advance slowly or stop producing blocks altogether.

The milestone tests whether supporters can advance a contentious consensus change without broad miner backing, potentially separating enforcing nodes from the dominant chain and escalating a dispute over how Bitcoin’s block space should be used.

BIP-110 seeks temporary limits on Bitcoin data

Written by pseudonymous developer Dathon Ohm, BIP-110 proposes additional consensus restrictions lasting roughly one year.

It would limit most new output scripts to 34 bytes, cap OP_RETURN outputs at 83 bytes, restrict certain data pushes and witness elements to 256 bytes, and temporarily limit several Taproot features. Unspent transaction outputs created before activation would be exempt. 

Supporters said the restrictions would discourage inscriptions and other non-monetary data that increase storage and bandwidth costs for node operators. 

The proposal’s critics, including Strategy Executive Chairman Michael Saylor and Blockstream CEO Adam Back, have argued that the proposal could divide Bitcoin and cause nodes to reject transactions permitted under the network’s existing rules.

Related: Bitcoin nodes running BIP-110 crosses 2% as spam wars heat up

The proposal uses version bit 4 for miner signaling. Its deployment schedule sets blocks 961,632 through 963,647 as a mandatory-signaling window, during which nodes enforcing BIP-110 reject blocks that do not carry the signal.

The specification defines block 963,648 as the beginning of its locked-in state and block 965,664 as the point when its transaction restrictions take effect. 

BIP-110 proponents have also discussed a more extensive fallback. On Aug. 1, Bitcoin developer Chris Guida rebased preliminary code for a proof-of-work change originally written by Bitcoin Knots maintainer Luke Dashjr. 

Guida described the code at the time as a contingency if miners opposed BIP-110, but said no activation date had been set. 

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