Trump’s Accelerated Fintech and Crypto Agenda
Incoming CEOs of major corporations often unveil 100-day plans to signal their control and lay out their vision. However, former U.S. President Donald Trump has implemented a 5-day plan, setting a new precedent with his swift approach to digital finance technology policy and regulation.
Following his election, the “Crypto Wall” fell with Trump’s commitment to assert U.S. global leadership in fintech innovation, crypto and digital assets. The new appointments included SEC and CFTC chairs, a new “crypto and AI czar,” and new committees, which initiated a wave of announcements. Last week’s Executive Order (EO) on digital financial technology set a course for U.S. policy, aiming to be enacted into law over the next 12 months. These steps include banning CBDCs and securing industry-backed stablecoins, promoting public blockchains, ensuring access to banking, and providing regulatory clarity with tech-neutral regulators. A revamped SEC strategy, including a new crypto task force and the repeal of controversial SAB121, empowers capital markets to enter crypto markets.
For innovators and operators in crypto and DeFi, who have faced regulatory challenges, the narrative has shifted. Digital finance is now recognized as a strategic U.S. asset, crucial for both competition and security. Aligning with this, Trump has taken steps to create his own fintech company, solidifying his interest in the space.
Crypto’s Potential and Challenges
Looking ahead, Trump’s administration is expected to encourage the American people to trust crypto’s legitimacy. With Trump and his administration invested in crypto, they believe ordinary Americans will be able to more easily access, trade, and invest in crypto for capital accumulation, especially following decades of stagnant wage growth for the average citizen, while the wealthy accumulated assets.
The administration faces the challenge of maintaining this trust. If the benefits of crypto primarily accrue to the President and his billionaire associates, it could undermine trust and damage the industry. Additionally, other groups that supported the President’s campaign will be expecting their own policy changes which could cause conflicts.
The Role of U.S. Regulators
U.S. agencies like the SEC and CFTC must carefully balance the administration’s push for deregulation with the need for market stability. According to Elise Soucie Watts, executive director at Global Digital Finance,
“New legislation, legal certainty, and regulatory clarity in the U.S. is absolutely imperative in order for the crypto and digital asset industry to mature and scale. While the sentiment towards innovation and new technologies is undeniably positive, the legislation must still progress through both houses and then be implemented across the U.S. While Trump’s closest advisors have made it clear that they wish to prioritize efficiency and remove regulatory red tape with broad strokes, it will be crucial not to remove the guardrails, many implemented after the last great financial crisis, that are integral to the smooth functioning of markets as we know them today.”
For regulators and policymakers in other jurisdictions, this signals an acceleration of the “digital space race.” Countries must balance financial stability with being attractive for business growth.
Global Crypto Landscape
Individuals hold the majority of bitcoin globally. India, China, the U.S., Brazil, and Indonesia are among the top countries in crypto adoption. Emerging economies offer strong potential for firms. The Emirates government reportedly holds a substantial bitcoin reserve, potentially surpassing the U.S. government. The U.K. also has a strong fintech sector, although neither are reported to be considering a strategic bitcoin reserve.
Steve McWhirter, global policy lead at Binance, notes a “constellation of interests in the U.S. that understand the alchemy of this new technology.” He emphasizes the U.S. timeline, within six to twelve months and how other countries might fall behind,
“Globally this is simply a race for the next generation of global tech companies that bring investment, skills, jobs, and taxes. Those that prioritize it win.”
In the U.K., there’s a sense of urgency after recent events like A16z’s closure of its London office. Laura Navaratnam, U.K. policy lead for Crypto Council for Innovation, urges the U.K. to recognize the economic benefits of digital assets, saying,
“If the first few weeks of the Trump administration hasn’t ignited a sense of urgency among U.K. policymakers and regulators, I don’t know what will. The U.S. has decisively entered the race to become the world’s leading cryptoasset hub — a prize the U.K. has long claimed to covet but has yet to seriously pursue. For the U.K. to truly compete, it must not only recognise but genuinely believe in the economic and consumer benefits digital assets will continue to deliver.” Policymakers in and outside of the U.S. are urged to act swiftly to foster the growth of digital assets and to stay competitive.
