Trump’s Potential Impact on Crypto Regulations
The Wall Street Journal’s Tech News Briefing podcast discusses the potential implications of former President Trump’s policies on cryptocurrency regulations. Host Belle Lin interviews Telis Demos, a writer for the Heard on the Street column and co-host of WSJ’s Take On the Week podcast, about what Trump’s second term could mean for the tech industry, particularly the cryptocurrency sector.
During the Biden administration, cryptocurrency was strictly regulated. However, Trump’s stance on crypto appears to be more supportive. Trump and the First Lady have their own ‘meme coins,’ which have garnered significant attention. Although Trump hasn’t taken many official steps regarding crypto, he has signed an executive order that could potentially change the regulatory landscape.
The executive order has three key points:
- It directs the government to abandon work on an official US digital currency.
- It aims to make it easier for crypto companies to get bank accounts.
- It establishes a working group to examine regulatory and legislative proposals for stablecoins and crypto market structure.
Telis Demos explains that this executive order is just the beginning of a process that could lead to changes in crypto regulation. However, actual changes will require either legislation or new leadership at regulatory agencies like the SEC and CFTC.
The former SEC chair, Gary Gensler, had been cracking down on the cryptocurrency sector. With potential new leadership, the SEC might drop or stop pursuing certain lawsuits against crypto companies like Coinbase and Ripple. The agency might also reconsider its definition of securities, potentially making it easier for crypto companies to operate.
Banks are cautious about getting involved in crypto transactions due to regulatory uncertainty and concerns about deposit volatility. While clearer regulations might make banks more comfortable with crypto, it could also lead to increased competition from stablecoins and crypto companies.
The crypto community is divided between those who see cryptocurrency as a means of financial inclusion and those who view it as a speculative investment opportunity. Trump’s stance on crypto seems to align with the former group, who want less government intervention and more freedom to operate.
The future of crypto regulations under Trump’s influence will depend on which faction within the Republican Party gains more traction. The outcome will significantly impact the industry, affecting everything from financial inclusion to the competitive landscape for banks and crypto companies.
