As the day of the inauguration draws near, the cryptocurrency community is excitedly awaiting a plethora of executive acts that will favor digital assets at the start of a second Trump Administration.
Possibly at the top of the wish list would be an executive order encouraging the Securities and Exchange Commission and the Commodity Futures Trading Commission to work together to develop a framework for policy regarding digital assets. An executive order might encourage the agencies to conduct study that advances the issue, even if Congress will ultimately decide how cryptoassets are classified. Clear regulatory rules specifically for digital assets have long been supported by the largest US companies in the industry, such as Coinbase Global Inc. and Ripple Labs.
President-elect Donald Trump is appointing pro-business individuals to key regulatory leadership positions, such as Scott Bessent as Treasury Secretary and Paul Atkins, a former SEC Commissioner, as chair of the primary securities industry regulator. He has also created a new role called artificial intelligence and crypto Czar, which will be led by David Sachs, a co-founder of PayPal Holdings Inc. and general partner of venture capital company Craft Venture.
According to Ari Redbord, global head of policy and government at blockchain intelligence firm TRM Labs, those individuals will ultimately decide policy. They are aware that, as a regulator, you must balance protecting consumers and preventing unscrupulous actors while simultaneously allowing the privacy of legitimate users in an open financial system.
Enhanced transparency would align with the cryptocurrency industry’s efforts to expand access to banking services. Regulations issued by the Biden Administration alerted the public to the dangers associated with digital asset banks. In 2023, the closures of crypto-friendly banks Silvergate and Signature rekindled worries that banks were being driven to avoid doing business with cryptocurrency firms.
Rebeca Romero Rainey, president of the Independent Community Bankers of America, stated in a statement Friday that a more secure environment for customers and the financial system will be supported by clear regulations for acceptable crypto-related products and services as well as a level playing field for regulation between the banking and cryptocurrency sectors.
Critics claim that the FDIC targeted the cryptocurrency business, therefore their celebration of Martin Gruenberg’s resignation, which was set for the day before Trump’s inauguration on January 20, has been justified. Gruenberg’s position is anticipated to be filled by Travis Hill, one of the two Republicans on the FDIC’s board and vice chair of Federal Deposit Insurance.
According to Hill’s recent address, he also expects the FDIC to adopt a more liberal stance toward innovation and technology adoption while upholding fundamental safety and soundness principles.
The easing of Staff Accounting Bulletin No. 121 (SAB 121), which essentially requires banks to account for customers’ cryptoassets as their own, is another important area of concern for the sector. Banks must maintain larger levels of capital because those assets are essentially reported on their balance sheets.
Using people familiar with the preparations, sources reported Thursday that Trump intends to issue an executive order boosting cryptocurrency as a policy priority and providing sector insiders a voice within his administration. People with knowledge of the situation predict that the directive will designate cryptocurrency as a national imperative or priority, which is strategic language meant to direct government departments to collaborate with the sector. To discuss an executive order that is not yet public, the persons who asked to remain anonymous stated it is also planned to establish a crypto advisory board to promote the industry’s policy priorities.
In a statement, Kristin Smith, CEO of the Blockchain Association, expressed optimism and hope for strong leadership from the next administration, emphasizing that the United States should embrace and promote cryptocurrency rather than discourage it.