NEWS ANALYSIS: Crypto industry pushes for policy overhaul after Trump win

New York — The crypto industry is pushing for an ambitious raft of policies that would promote the widespread adoption of digital assets and considering who best to promote them, as they anticipate a cryptocurrency-friendly regime under president-elect Donald Trump.

While crypto companies were already anticipating a lighter touch with a new administration, Donald Trump’s decisive victory and a projected Republican sweep of Congress pave the way for a dramatic, lasting crypto policy overhaul. Trump courted crypto cash with promises to be a “crypto president”, and industry executives say he now has a strong mandate to deliver.

The industry is now pushing for measures including potential executive orders on crypto firms’ access to banking services and crypto-friendly picks in a range of roles, in addition to a new Securities and Exchange Commission (SEC) chair, executives said.

“We’ve had an administration that’s been very negative, and so we’re looking forward to unlocking that gridlock,” said Mike Belshe, CEO of institutional crypto platform BitGo, who hosted a campaign fundraiser for Trump in July. “I think the voters of America said very clearly that they want to see that.”

Bitcoin soared above $90,000 on Wednesday amid rising policy optimism, with some analysts predicting the world’s largest token could hit $100,000.

While some industry asks could happen quickly such as procrypto nominees at financial regulatory agencies, others could take longer, such as passing legislation to create a regulatory framework for digital assets.

Lead agencies

Trump has also pledged to create a crypto advisory council. While it’s unclear who might serve on the council, crypto executives are brainstorming who to elevate as key leaders in crafting crypto policy in the new administration.

“Everybody in Washington is asking and thinking about … who’s going to lead these agencies,” said Kara Calvert, head of US policy at Coinbase. “It’s important for companies such as Coinbase, but also for all the smaller start-ups … to have a point of view.”

Jonathan Jachym, global head of policy at crypto exchange Kraken, said the industry was considering who would be suitable for leadership positions to drive policy.

“Before the election, investors were already betting on options that the price of bitcoin would exceed $80,000 or even $100,000, and the value of these bets has risen,” Grzegorz Drozdz, analyst at Conotoxia wrote, adding the election outcome was mostly driving those bets.

Under the Biden administration, the SEC and Treasury cracked down on crypto companies for allegedly violating securities and anti-money-laundering laws, while bank regulators discouraged lenders from dabbling in crypto, and Congress has failed to pass legislation that would help promote mainstream crypto adoption.

With Republicans running Washington, all that could change.

The crypto industry expects Trump to make good on his July promise to establish a strategic US bitcoin reserve — one of his more ambitious pledges executives said they now see as a real possibility. “It legitimises the asset class more,” said Marshall Beard, COO of Gemini, the crypto exchange the founders of which, the Winklevoss twins, donated to Trump.

Negative pressure

The industry also expects Trump’s bank regulators to take a softer stance on crypto. Many crypto firms have struggled to find banking partners amid scrutiny from regulators worried about the risks, especially after the collapse of crypto-friendly US lenders last year.

Jachym said there had been “negative pressure” from bank regulators on crypto relationships, which could change if legislators created a new crypto framework.

Trump in July promised he would not let banks “choke” crypto companies out of the traditional financial system, and some executives speculated the president-elect could even address the issue with an executive order.

“Something like that from the White House could go a long way towards fixing the problem,” said Kristin Smith, CEO of the Blockchain Association, a crypto trade group.

Earlier in the campaign, crypto firms had hoped Trump’s new SEC chair would create a waiver regime for crypto companies, but firms are now discussing pushing for faster “no-action” letters that the agency could immediately use to allow crypto companies to operate without fear of reprisal, one executive said.

Smith added the industry is also preparing a fresh push for crypto-friendly laws. With Republicans expected to take the House, they could expedite spending bills with a simple majority vote — a process called “reconciliation”, which often allows smaller items to piggyback on must-pass spending bills. That could be “a pathway for getting something done”, said Smith.

Coinbase and other cryptocurrency companies spent more than $119m backing procrypto congressional candidates, many of whom won their races, including Ohio Republican Bernie Moreno. He took a key Senate seat from Democratic crypto sceptic Sherrod Brown, paving the way for other potentially sweeping legislation, said executives.

Calvert said the 2025 Congress would be “the most procrypto Congress in history”.

Reuters