The US could finally have a crypto-specific law, something most of the community has been literally begging for. And that could change things up for the rest of the world.
Donald Trump has made no secret of his plans to make the US the capital of the crypto world. He’s even promised to have the new rules written by an advisory committee full of “people who love” crypto, “not hate” it.
And Trump’s Republicans are set to take control of both houses of Congress, which will make it much easier to pass crypto-friendly laws.
Jonathan Jachym, the global head of policy at major cryptocurrency exchange Kraken, tells MONIIFY that this US election “marks a significant turning point for crypto policy,” not just because Trump won but because many new pro-crypto members were elected from both parties.
So what exactly do they have in the works?
Trump is already prepping for his admin to take a more relaxed stance on crypto, looking for candidates for key positions that can play BFFs with the virtual asset industry, says The Washington Post.
His top advisers, meanwhile, are reportedly consulting with crypto execs on potential changes in Federal policy. Early talks about financial regulators, including who’s going to chair the SEC, are also underway.
Just the idea of a pro-crypto president in DC has already brought waves of new investment into the crypto market, with Bitcoin smashing records week after week.
Here’s why this is a big deal globally, too
Once the US has its first clear-cut rules, crypto might be unleashed like never before. And everyone will get a cut of that.
The US has long dominated the global economy through the dollar, which still acts as the world’s main reserve and trading currency. Trump wants to use crypto to lead the digital economy in the same way.
Under Joe Biden, regulators were wary of digital assets and used traditional financial rules to investigate and regulate exchanges and other platforms in the aftermath of the FTX meltdown. The perceived US crackdown drove large crypto companies offshore.
Yes, the crypto industry already has pockets in every corner of the world, with hubs in Dubai, Singapore, Hong Kong, Switzerland and even the UK.
But having the US on board would add legitimacy to crypto and make digital assets much more attractive to people who were worried about market volatility and a lack of clear regulation.
“The interaction between US policy changes and global economic strategies could dynamically reshape the crypto landscape,” a spokesperson for crypto exchange KuCoin tells MONIIFY, adding that these changes could spark a wave of new adopters and tech upgrades for the global crypto scene.
Previous attempts
Several politicians have tried to get crypto related bills or rules passed. None have fully succeeded. These efforts include:
- The Financial Innovation and Technology for the 21st Century Act, which provides some clarity on what makes a crypto token a security or a commodity. This is important in the US because securities and commodities are overseen by different agencies. The bill also sets out consumer protections. It has yet to go through the Senate.
- There’s also the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (“BITCOIN”) Act. (Yup, this’s how politicians name laws. 😏) This bill will create a strategic Bitcoin reserve, which is one of Trump’s primary promises. Crypto betting platform Polymarket gives this a 27% chance of happening. But if it does, imagine what would happen to Bitcoin prices?
- The “Clarity for Payment Stablecoins Act of 2023” tries to define how stablecoins will operate in the US. This hasn’t entered any House of Congress and Trump hasn’t specifically mentioned supporting it.
So yes, it’s early days
US regulators will first focus on settling crypto under one regulatory body and then focus on strengthening stablecoin regulation, Mohammad Raafi, founder and CEO of Fasset, an emerging-markets digital assets exchange, tells MONIIFY.
Stablecoin regulation will continue to keep the dollar as the asset of choice.
If Congress passes the Bitcoin Act, that would be huge because to hold Bitcoin as a strategic reserve asset, the US government would potentially have to buy “5% of Bitcoin supply” globally, James Butterfill, CoinShares’s head of research, tells MONIIFY.
Now that really would be a boon for Bitcoin. And bring the crypto bros in from the cold.
