Cryptocurrency industry poised for growth with incoming Trump administration

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27th December 2024 – (Washington) The cryptocurrency sector has made major financial investments in the 2024 election cycle, positioning itself for potential gains under the forthcoming Congress and administration. For over a decade, the lack of regulatory clarity from federal authorities has frustrated industry advocates, especially as the Biden administration scrutinised major players like Coinbase and Ripple for alleged securities violations.

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However, President-elect Donald Trump, who once dismissed cryptocurrencies as a “scam,” has embraced them during his campaign, becoming the first presidential candidate to accept digital assets. This shift suggests that lawmakers from both parties may soon send comprehensive cryptocurrency legislation to his desk.

“With a bipartisan, pro-crypto Congress and a pro-crypto president next year, the groundwork is laid for smart policy, including stablecoin and market structure legislation, that will shape the American crypto landscape for years to come,” noted Kristin Smith, CEO of the Blockchain Association. She emphasised the need for the industry to unite and present a cohesive vision to policymakers in Washington.

Among the industry’s top priorities is the passage of comprehensive legislation, with advocates favouring the Financial Innovation and Technology for the 21st Century Act (FIT21). This substantial bill aims to delineate the regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Despite having passed the House earlier this year, FIT21 did not advance in the Senate, requiring lawmakers to restart the legislative process in January.

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Incoming House Financial Services Chair French Hill (R-Ark.) has identified a “regulatory structure bill for digital assets” as a top priority for GOP leadership, with plans to expedite its introduction within the first 100 days of the new Congress. He highlighted the necessity for a clear market structure, decrying the previous administration’s enforcement-driven approach as detrimental to the industry’s success.

With the anticipated shift in leadership, industry leaders are optimistic about improved regulatory relations. Trump’s recent appointment of former SEC Commissioner Paul Atkins, known for his crypto-friendly stance, to replace SEC Chair Gary Gensler has buoyed hopes within the sector. Trump has also announced the formation of a “crypto council,” led by David O. Sacks, aimed at fostering a positive regulatory environment.

Furthermore, the industry is advocating for the repeal of SEC guidance issued in 2022 that requires public companies to classify crypto assets held on behalf of users as liabilities, citing it as a significant barrier to growth. In May, Congress attempted to overturn this guidance, but President Biden vetoed the resolution, asserting that it would hinder the SEC’s ability to implement necessary safeguards.