In November, the victory of the president-elect sparked a surge in crypto markets, with many analysts predicting the end of the U.S. government’s aggressive stance toward the industry’s major players. This shift in policy is seen as a significant milestone, but the question remains: will the Trump Administration actively implement the policies experts argue are essential for crypto’s long-term success?
Kristin Smith, CEO of the Blockchain Association, a key crypto lobbying group, believes that the cessation of government hostility will be a major boon for the industry. However, she emphasized that this alone is not enough. “We need more than that,” Smith told.
Despite numerous promises made by Trump during his campaign, such commitments often fade once a president takes office, overshadowed by competing priorities. Smith pointed out that “there’s going to be a lot of priorities across the Trump Administration.” Without a dedicated person to ensure action on crypto-related issues, the industry could face delays or setbacks.
A positive sign for crypto’s future is the recent appointment of a dedicated AI and crypto czar in the Trump White House. Venture capitalist David Sacks, who accepted the position in early December, will be responsible for coordinating the Administration’s digital assets policies across the White House, executive agencies, and Congress. Smith sees this as a crucial step for ensuring meaningful progress in the industry.
One area where the Trump Administration could have an immediate impact is the repeal of SAB 121, a rule by the U.S. Securities and Exchange Commission (SEC) that discourages American banks from holding crypto assets. Although Congress voted to nullify the rule in May, President Joe Biden vetoed the bill. If Trump were to sign a new version of this bill into law, it could open up a massive market for crypto in the United States. Smith believes that such a move would usher in a new chapter for the industry, allowing for wider adoption and investment.
While Bitcoin and Ethereum spot ETFs are currently available on Wall Street, regulatory challenges and lingering concerns have kept many American investors and businesses from fully embracing crypto. Smith argues that allowing mainstream banks to hold crypto assets, alongside passing a basic market structure bill that formally legalizes the industry, would provide much-needed confidence to a broader range of investors. This, in turn, would unlock significant capital from traditional financial institutions (TradFi), fueling innovation and growth in the digital assets space.
The potential shift from cautious engagement to full-scale investment by TradFi institutions could be seismic, creating a new era for the industry. If the Trump Administration takes action on these key issues in 2025, the impact could be felt across the entire crypto ecosystem.
December 2024, Cryptoniteuae
