GuShiio.com If the Trump administration takes the following three steps, it may be evidence that they value cryptocurrencies and care about the market.
Author: Ross Shemeliak, Cointelegraph
Compiled by: Felix, PANews
After the return of U.S. President Trump, the U.S. Securities and Exchange Commission (SEC) dropped a lawsuit it filed against Coinbase in 2023 and suspended an investigation into Robinhood’s crypto division. On February 25, the U.S. SEC also ended its federal investigation into Uniswap Labs, but then Coinbase and Bitcoin markets fell, with Bitcoin falling from a peak of $109,114 to $87,000, a drop of 20%. Although there is no obvious reason for the decline, the overall logic of investors ‘reaction is clear: they don’t like unpredictability and usually care more about the market than specific companies.
The reason why the U.S. SEC dropped these cases is not important. What matters is the attitude of Trump’s presidency and cryptocurrency. It is worth mentioning that Coinbase and Robinhood have donated money to Trump, and Uniswap has also participated in the $116 million cryptocurrency Political Action Committee (PAC) Fairshake.
Does the above situation signal to investors that donations are accepted? Or is it just a coincidence? Does this mean Washington welcomes cryptocurrencies? Fortunately, there are ways to determine Trump’s stance on cryptocurrencies during the presidency. If the Trump administration takes the following three steps, it may be evidence that they value cryptocurrencies and care about the market.
Regulators designate CFTC or SEC to change stance on token securities
The U.S. SEC’s position on token securities is crucial, and the SEC, under its predecessor’s leadership, intended to designate most tokens as securities. This designation means that you may face risks: Even if you do not directly issue tokens yourself and develop technical solutions to interact with or trade tokens, you may face legal risks-related to potential participation in unregistered securities. This remains a major obstacle facing the crypto industry.
The Commodity Futures Trading Commission (CFTC) may also change its stance on cryptocurrencies. Historically, a company’s success has been an important factor in the price of tokens, and classifying tokens as securities is not actually in the hands of the company. However, if the CFTC relaxes regulations, it could have a significant impact on U.S. companies, which may be more likely to get involved in cryptocurrencies.
Currently, the CFTC does not regulate cryptocurrencies and does not have such power. The transfer of jurisdiction over cryptocurrencies to the CFTC strongly demonstrates the new government’s broad support for cryptocurrencies. As a smaller, less aggressive regulator, the CFTC is unlikely to regulate through enforcement, so it may take a more cooperative stance on the crypto industry. The realization of either of these two things would eliminate the huge risks faced by U.S. crypto companies, opening the door for innovative crypto companies to enter the U.S. market.
Adopt stablecoins
The adoption of stablecoins is also expected to drive the growth of crypto payments, benefiting small and medium-sized businesses (SMBs). Small and medium-sized enterprises that start using crypto payments often turn to stablecoins first, so these companies must clearly understand the legal provisions on stablecoins. It is not enough to simply use vague regulations that do not apply to stablecoins. They need a clearly defined framework to clarify regulation.
What will better regulation bring? More confidence. Companies will enjoy greater certainty in the transition from stablecoins to cryptocurrencies. And crucially, as more and more companies integrate crypto payments, more opportunities will emerge for U.S. crypto companies. In order to promote this virtuous cycle, special legislation is needed to treat stablecoins as legal means of payment. Direct regulatory oversight, ensuring trust in reserves and managing risks to stablecoin issuers will also enhance confidence.
FinCEN plays a role
Another sticking point is the problems crypto companies face when opening bank accounts. Even if they manage these accounts, they face higher service costs and fees because banks believe there are significant money laundering risks in the crypto industry. This reluctance to serve crypto is ironic: the crypto industry aims to build an alternative payment system, but still relies on traditional banking.
In order to develop a crypto ecosystem, financial institutions must provide services to crypto-related entities. It is also obvious that without the participation of traditional banks, the development of the crypto ecosystem will still be limited. The key to change may lie in the Financial Crimes Enforcement Network (FinCEN). If the bureau takes steps to revise its risk assessment of crypto companies, banks will adjust their assessments accordingly. Financial institutions will be more willing to work with crypto companies.
The future of cryptocurrency
The prospects for cryptocurrencies in the United States are unclear: The Trump administration has accepted some cryptocurrency donations, but the market remains uncertain. By focusing on the activities of the CFTC and FinCEN and the positive shifts in cryptocurrency regulation, it may help understand this administration’s attitude towards the industry. These three areas are always difficult to discern, but can provide insight into the true intentions of Trump’s presidency for U.S. crypto regulation.
Related reading: Crypto Market Macro Research Report: From Tariffs to Strategic Reserves of Crypto Assets, the Crypto Order in the Trump Era
