Policy Change or Political Hype? Crypto’s Bet on Trump’s Leadership
In Brief
Trump’s election has sparked excitement in the crypto sector, with hopes for favorable legislative shifts.
Given the high hopes for major legislative shifts under Trump’s leadership, the cryptocurrency sector has been going wild since his recent election. They believe that the administration of President-elect Donald Trump will be favorable to cryptocurrencies.
A significant and long-lasting crypto policy makeover is now possible, thanks to Donald Trump’s resounding win and the anticipated Republican takeover of Congress. Crypto firms were already hoping for a more hands-off approach with the incoming government. After campaigning as the “crypto president,” Trump reportedly has the backing of the crypto sector’s top brass and is ready to deliver on his pledge.
Sweeping Changes in the SEC
Many are hoping that the present head of the SEC, Gary Gensler, will be removed from office because he is too hostile toward the industry, and that new leadership could promise a much brighter horizon.
Among the pro-change supporters, BitGo’s CEO, Mike Belshe, pointed out that the recent decision by the American voters can be the end to a “very negative” SEC administration.
Coinbase CEO Brian Armstrong also said something along similar lines, saying that the next SEC head may need to compensate for the damages caused by the current administration. Armstrong’s comments reflect a more widespread view among crypto industry heavy hitters: transparent regulations are essential to the sector’s continued success in the face of rising international competition.
Many expect the republican president to reform the SEC, expand financial services available to crypto businesses, and establish fresh funding frameworks. Industry evaluations indicate that if Gensler’s laws, which are seen as too strict, are dismantled, companies would be free to develop without being constantly monitored by the law. Some companies may find that these changes make it easier for them to bring their operations back to the United States from other countries.
SEC Cases to Drop?
In addition to removing the barrier to innovation, ConsenSys’ CEO, Joe Lubin, believes that many companies hope that these changes can help them win their SEC cases, or see them vanish altogether.
He thinks the cryptocurrency sector might save a ton of money if Trump’s power is used to resolve or drop lawsuits concerning the likes of Coinbase and Ripple. This type of hope echoes the feelings of many crypto proponents, who believe that the new administration will have a kinder attitude to enforcement in the sector.
A Crypto Council
The SEC is only part of the bigger picture, which is a clear regulatory climate for the sector. That’s why many have called for an advisory council, made up of key figures in the crypto community, to help create favorable policies and regain the lost confidence in the U.S. market.
The council’s members are still unknown, but execs in the cryptocurrency industry are talking about who should be in charge of making crypto policy under the new government. According to Kraken’s Jonathan Jachym, the cryptocurrency sector is now thinking about potential leaders to steer policy.
Another one of the recent voices is Kara Calvert, a key policy leader at Coinbase, stating that the shortlist of potential candidates has become a hot topic in the capital. She also pointed out that both crypto giants like Coinbase and smaller players should have a voice on the council.
We need to still see how Trump’s team will do in the coming months. But, there are many proposed changes, and not all will happen at the same time. A legislative framework for crypto, for example, would need more time to establish than, say, the nomination of pro-cryptocurrency bank regulators.
Easing the Banking Pressure
Many in the sector are also hoping that Trump’s financial regulators would be kinder with cryptocurrency. Given the recent failures, particularly among crypto-friendly banks, officials are keeping a close eye on many crypto companies and making it hard for them to find banking partners.
Early in the summer, Trump pointed out that banks have been pushing crypto companies out of the financial system. Several leaders have predicted that the soon-to-be president might pass an executive order to solve this problem.
Blockchain Association’s CEO, Kristin Smith, was one of the many who said that a direct intervention from the president can “go a long way” in solving this long-standing crisis.
Regulatory Clarity, Once and For All
Trump’s change in regulations could open up new possibilities for crypto companies that want to work with banks.
After pouring over $120 million into Trump’s run for office, crypto CEOs are hopeful about the improvements that might encourage crypto adoption. Trump also made a campaign pledge at the Bitcoin 2024 summit that he would transform the United States into the global “cryptocurrency capital.” Many prominent figures in the sector share this view, arguing that his possible cabinet picks may bring a more supportive regulatory climate.
This has the potential to change the way corporations interact with conventional financial institutions, which have been wary of partnering with businesses for a long time because of regulatory uncertainty.
But business leaders say that even if Trump makes regulations clear as promised, they will still have to work through complicated systems and steps to make the changes that are needed. As a possible result, many are hoping for the establishment of test grounds where crypto companies may run their operations without fear of imminent regulatory consequences.
To help new technologies grow without too much government control, the Trump team could also push for the creation of crypto innovation hubs. These proposals are in line with Trump’s campaign promises to elevate the United States to the forefront of the cryptocurrency industry.
Mixed Feelings in the Banking Sector
While many in the banking sector are excited to see a more relaxed approach after Biden’s strict approach, some state that it’s not going to be all smooth sailing.
For instance, Karen Petrou, a leading figure in Federal Financial Analytics, stated that while it’s good for banks to finally escape the “tsunami” of rules and limits, a bigger danger could be the fresh crypto players who can compete in the same field as banks, but without many of the limitations.
But, Clifford Chance’s Young Kim has chosen to focus more on the upside of the potential integration, suggesting that the traditional landscape of banking can benefit so much from “incorporating” crypto’s technology inherent into its structure.
What’s in Store for Crypto?
Bitcoin’s historic surge is enough evidence to show that the crypto sector is positive about Trump’s second term.
Regardless of his wary past with cryptocurrency, crypto enthusiasts backed him over Harris because they thought his triumph would be the pivotal moment crypto wanted. His focus on consumer protection and financial fraud will undoubtedly continue.
Trump may also want a complete crypto tax overhaul, better user safeguards, a more steady market, and innovation, technological growth, and a prosperous sector for everyone. As long as corporations and crypto traders follow rules, the sector will be secure and profitable.
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About The Author
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
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Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
