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The unique strategy will see President-elect Donald Trump begin his Presidency with executive orders on the liberalization of Virtual currencies intending to provide firms within the space with an acceleration to lessen interference from regulatory authorities. Previous insiders, who know the strategies being planned out by the Trump administration, revealed that Trump’s initiatives could revolutionize the crypto market within the United States, changing from the current administration has shown more strain on regulatory policies.
Trump’s Vision for Crypto Adoption
During his election campaign, Trump adopted a ‘hidden presidency’ in the cryptocosm which he claimed he would protect and advocate for the industry. His administration aims to move fast, insiders reported that he may issue an order supporting cryptocurrencies within his first days in office.
One of such activities is the establishment of a Crypto Advisory Council. The council which Trump first floated in July is expected to comprise up to 20 people who would help the government formulate friendly policies on cryptocurrencies. This council can connect the gap between the industry side and the policymaker side and cooperation can be made more smoothly for the regulation and the innovation of this sector.
Rescinding Regulatory Barriers
One of the main goals of Trump’s plan is the problem with the regulations that negatively impact the cryptocurrency industry.
- Reversing SAB 121 Guidance
Trump’s team will order the Securities and Exchange Commission (SEC) to withdraw What You Need to Know of the 2022 accounting guidance called SAB 121. This rule has significantly raised the costs of custody by creating a requirement for banks and other institutions to directly take possession of cryptocurrencies on behalf of third parties therefore effectively slowing down the industry. By doing this, the administration intends to remove hurdles to institutional crypto adoption from the equation.
- Closing the “Operation Choke Point 2.0”
Another recommended action is preventing what crypto managers call Operation Choke Point 2.0. Executives in the industry have for long accused bank regulators of putting pressure on financial institutions to the extent of blocking those that deal with crypto businesses from the mainstream financial systems. Despite denying such accusations, the proposed executive order aims at tearing down these perceived hurdles, enhancing banks and other financial institutions to provide their services to crypto companies.
A Shift from the Biden Administration’s Approach
These proposed actions are a complete reversal from where the Biden administration appeared headed on crypto regulation.
President Joe Biden’s regulators exempted fornication and money laundering have imposed strict conditions on crypto firms. This also involved filing lawsuits against some of the prominent exchange companies viz; Coinbase, Binance, Kraken, etc. Opponents of these policies pointed to unprecedented negative impacts on business development and the industry’s movement to the underground.
Trump’s administration on the other hand looks set to offer a more cooperative and corporate-friendly environment, focused on growth, technology, and markets to correct perceived regulatory overreach.
Criticism and Challenges
Although the crypto industry has found a partner in Trump, critics have raised concerns over prospective dangers.
- High-Profile Scandals
Critics indicate that famed crypto leaders such as Sam Bankman-Fried got 25 years for fraud and Changpeng Zhao got a prison term for money laundering offences. Explaining these cases, the industry’s weak spots were revealed along with the possibilities of abuse if it is not tightly regulated.
- Balancing Innovation and Oversight
Many have commented that although encouraging the creation of a new product is critical, it should not be done at the sacrifice of consumers. Looking at the positive side, growth opportunities will also be a major factor where maintaining balance to prevent fraud will be an issue of concern for the incoming administration.
Potential Impact on the Crypto Industry
If implemented, Trump’s policies could have far-reaching implications for the cryptocurrency market:
- Increased Institutional Participation
Some of the increased participation in the cryptocurrency marketplace results from creating a less onerous regulatory environment that may encourage other traditional banking institutions to dispatch their ventures more confidently in the blockchain and cryptocurrency market space which could help promote market liquidity and profitability.
- Boosting U.S. Competitiveness
If there is positive regulation, then the United States can become the center of cryptocurrency and blockchain development; more professionals and investors will arrive in the nation.
- Mainstream Adoption
More transparent laws and greater backing might help to make digital currencies an ordinary part of the current financial architecture and push their application higher in companies’ and individual people’s lives.
Beyond Crypto: Trump’s Broader Executive Agenda
Cryptocurrency regulation is only one of the many actions planned by Trump for his first days in the White House. His team has promised a flurry of executive orders addressing various topics, including:
- Energy Production: Measures to increase local energy production, and, therefore, decrease imports.
- Immigration: Tightening control at the borders and the issue of illegals.
- All these measures demonstrate that Trump is ready to make fast and effective changes when he launches his second term.
