The cryptocurrency industry has spent big on the 2024 election, and that investment is about to pay off in the next Congress and administration.
For more than a decade, a lack of clarity from federal regulators has frustrated industry advocates. This is especially true as the Biden administration pursues cryptocurrency giants including Coinbase and Ripple for allegedly selling unregistered securities and urges banks and investors to exercise caution.
However, President-elect Trump, who once dismissed cryptocurrency as a “scam,” accepted cryptocurrency during his campaign and became the first presidential candidate to embrace digital assets. On Capitol Hill, lawmakers from both parties could send a comprehensive cryptocurrency bill to his desk in the next Congress.
“With the election of a bipartisan, pro-crypto Congress and a pro-crypto president next year, we are on track to cross the finish line on smart policies, including stablecoin and market structure legislation, that will shape the U.S. cryptocurrency industry for years to come. . Kristin Smith, CEO of the Blockchain Association, told The Hill.
“As we look to 2025, it is important that the industry collaborates on these policy solutions to present a cohesive vision to leaders in Washington. “Political power is temporary, so it is important to capitalize on this moment to ensure that cryptocurrencies have a bright future in the United States.”
Here are a few policies on the cryptocurrency industry’s wish list:
Comprehensive cryptocurrency bill passed
Several comprehensive cryptocurrency bills have been introduced in the House and Senate in recent years, but industry advocates tend to favor the 21st Century Financial Innovation and Technology Act, also known as FIT21.
The more than 250-page bill establishes guardrails for the industry and draws a clear line between regulators at the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The bill is “very pro-crypto,” according to Stand with Crypto, a non-profit advocacy group launched last year with the help of Coinbase.
Last May, FIT21 became the first major cryptocurrency bill to pass the House of Representatives, despite opposition from SEC Chairman Gary Gensler.
The bill did not come up for a vote in the Senate, meaning lawmakers will have to restart the legislative process when Congress opens in January.
Incoming House Financial Services Chairman French Hill (R-Ark.) told CNBC last week that a “regulatory framework bill for digital assets” is a “top priority” for Republican leadership and that Majority Leader Steve Scalise (D-Ark.) plans to move. He said. Once within the first 100 days of the 119th National Assembly.
“We need a market structure for digital assets. We have no road rules. Under Chairman Gensler, we received fair regulation by enforcement. “This is not conducive to America’s success.” Hill said.
Gensler is an unpopular figure known for frequent crackdowns on industry players, and the Trump administration is expected to have a lighter touch on the cryptocurrency industry than the Biden administration.
Cryptocurrency-friendly regulator appointed
The president-elect’s first appointment has industry leaders optimistic about future regulatory relationships.
Trump thrilled cryptocurrency advocates last month when he nominated former SEC Chairman Paul Atkins to replace Gensler, who announced he would resign on Inauguration Day.
Atkins is known for embracing cryptocurrency. When Trump nominated Atkins, the president-elect said in a Truth Social post that the former commissioner “recognizes that digital assets and other innovations are critical to making America greater than ever.”
He also announced on Sunday the creation of a “cryptocurrency committee,” one of the priorities outlined in a letter Smith sent to the president-elect and members of Congress last month.
President Trump said the committee would be chaired by “White House AI and cryptocurrency czar David O. Sacks.”
One of the most important questions right now is who Trump will choose to lead the CFTC. Competitors include former CFTC Commissioner Brian Quintenz, currently head of cryptocurrency firm policy at Andreessen Horowitz. CFTC Commissioner Summer Mersinger is a former top staffer for incoming Senate Majority Leader John Thune (R.S.D.). Josh Sterling, partner at Milbank LLP; Neal Kumar, a partner at Willkie Farr & Gallagher, reported in Politico this week.
The Hill has reached out to Trump’s spokesperson for comment.
“United States’ war on cryptocurrencies under Gary Gensler’s SEC is over, and we hope this will lead to a healthier regulatory relationship between the industry and financial regulators,” Stuart Alderoty, Ripple’s chief legal officer, said in a statement to The Hill. said. .
SEC Cryptocurrency Accounting Guidelines Rollback
The industry is also pushing to rescind SEC guidance issued in 2022. It requires public companies to mark crypto assets held on behalf of users as liabilities because it poses a “significantly increased risk” to the company.
The directive, known as SAB 121, was a thorn in the side of the industry for excluding lenders.
Congress sent a bipartisan resolution overturning the guidance to President Biden’s desk in May, but Biden said, “The Republican-led resolution will inappropriately limit the SEC’s ability to set appropriate guardrails and address future issues.” “He rejected this.
In a letter to President Trump and members of Congress, Smith once again urged lawmakers to overturn the “punitive and anti-cryptocurrency” guidelines.
“For too long, the cryptocurrency industry has been subject to a hostile SEC and enforcement-by-execution regulatory approach,” Smith wrote.
