In recent weeks, the crypto industry has been celebrating major political changes, with the election of a pro-crypto President and key appointments that show a potentially bright future for digital assets in the United States.
As report with Bloomberg, the landscape seems to be changing, giving us hope for the future of cryptocurrencies.
Trump Administration Appointment for New Crypto Era
Incoming administration, under the President-Elect Donald Trumphas already made a significant selection of key positions, including representatives of the crypto sector.
Howard Lutnick, CEO of Cantor Fitzgerald, is set to become Secretary of Commerce, and Paul Atkins is expected to head the Securities and Exchange Commission (SEC).
This pro-crypto stance is seen as an important moment for an industry that often finds itself at odds with itself administrators and politicians.
Jennifer Schulp, director of financial regulation studies at the Cato Institute, noted, “Crypto is having a ‘Welcome to Washington’ moment.”
He mentioned that the industry is always criticized for its lack of understanding political situation. Now, as it seeks to navigate this new territory, it must do so as a unified organization, a “challenging task” given the diverse interests within its ranks.
The crypto community has greatly increased its political involvement, pouring more than $130 million into campaigns during the November election. This financial influence is now being felt, and industry leaders are eager to establish their presence in Washington.
Bipartisan Support For Financial Innovation Act
Notable figures, such as Kris Marszalek, CEO of Crypto.com, and Brian Armstrong, CEO of Coinbase, have been seen actively engaging with political leaders, showing a desire to have a direct influence on those who are emerging. regulatory framework.
However, this situation is not without its complications. Real power remains somewhat murky, as demonstrated by the dramatic announcement of David Sacks as the new AI and crypto czar—a move that caught many in the crypto sphere off guard.
Despite promising nominations, the nature of the policies to be recommended is uncertain. Neeraj Agrawal, director of communications at Coin Center, pointed out that the crypto industry is fundamentally fragmented. important legal matters. Key issues include market structure, stablecoins, and access to banking, and there is no consensus on how to move forward.
The Financial Innovation and Technology for the 21st Century Act, which aims to create a regulatory framework for the digital assets market, has received bipartisan support.
However, after its passage, many stakeholders expressed dissatisfaction with the way it handled issues like these decentralized finance (DeFi) and the separation of responsibilities between the SEC and the Futures Trading Commission.
Kristin Smith, CEO of the Blockchain Association, emphasized the need for a piece of legislation that accurately reflects the industry’s needs, saying, “We haven’t seen a bill that makes sense for the industry yet.”
Challenges of the New Regulatory Framework
As new regulation approaches, focus on regulatory priorities is intensifying. Representative French Hill of Arkansas, the incoming chairman of the House Financial Services Committee, indicated that there is an intention to submit a comprehensive bill for the structure of the crypto market within the first 100 days.
However, the prospect of re-opening negotiations on such a comprehensive bill raises concerns about different plans and the possibility of a different approach.
Stablecoin legislation also appears to hold immediate promise, with Representative Patrick McHenry introducing the “Stablecoins Payment Transparency Act of 2023.” There seems to be broad consensus all around stablecoin regulationwhich would make it easier to pass compared to the controversial market structure law.
While the crypto industry is at a critical juncture, the path forward is fraught with challenges. Competing interests within the industry have made it common to push for joint regulations. As Schulp noted, “It’s even harder when you’re given a stick and told to run with it.”
Featured image from DALL-E, chart from TradingView.com