After becoming US President for his second term in office after Tuesday’s electoral victory, Donald Trump’s government may bring forth renewed optimism in the US crypto sector.
Trump was vocal throughout his campaign this year on his pro-Bitcoin and crypto stance, making commitments such as abolishing any notion of a Central Bank Digital Currency (CBDC), bringing all Bitcoin mining to the US and enabling a free market for crypto to thrive.
Mouloukou Sanoh, CEO and Co-Founder of DeFi Innovator MANSA, believes that the incoming Republican government can help foster blockchain and crypto innovation, only if Trump and his officials are consistent with what they have been saying.
“If Republicans follow through on their promises, this could be a win-win for the DeFi space. Their commitment to safeguarding digital asset rights and resisting central bank digital currencies creates a more welcoming environment for blockchain innovation,” said Sanoh.
“Clear regulatory frameworks would not only protect investors but also encourage broader participation in tokenized real-world assets. For companies like MANSA, this shift enables us to expand our offerings and drive forward the adoption of blockchain technology in transforming traditional asset markets.”
Whether Trump can enact his stance remains to be seen, but it will be encouraging for crypto and digital asset companies based in the US that they have a President elect willing to speak on and support the sector it believes has been lacking in recent years.
Under outgoing President Joe Biden’s government, crypto companies have been marred by controversies, notably the collapses of FTX and TerraLuna.
However, whilst the sector has been working to remove itself from bad actors like Sam Bankman-Fried and Do Kwon, regulatory ambiguity has been a constant headache for not just the players involved in the sector, but also the Securities and Exchange Commission (SEC).
More Regulatory Clarity?
Gary Gensler has been at odds with the US crypto sector since assuming the Chair of the SEC.
Gensler laid down the law that crypto and digital assets should be classified as ‘securities’, a regulated financial instrument that therefore must be registered with the financial regulator.
This enforcement, or lack thereof according to some crypto companies, has seen Gensler and the SEC hit lawsuits against some of the sector’s largest players, including Binance, Coinbase, Crypto.com and more, but these companies have all shared the same sentiment that the regulations and rules surrounding tokens lack clarity.
Now with Trump in office, it is widely believed amongst US political commentators that Gensler will step down as SEC Chair on his own accord, as the President elect has been a vocal critic against the Democrat and his handlings at the SEC.
Amr Adawi, Co-CEO and Co-Founder of MetaWealth, believes that clear regulation around the crypto and digital asset sector will be the catalyst for greater adoption and potentially more important, clarity for companies.
He shared: “The pro-stance from Republicans could significantly benefit the RWA tokenization space. Clear regulatory frameworks protecting digital asset rights would enable broader participation from US investors in tokenized real-world assets.
“By focusing on investor protection while limiting unnecessary oversight, this approach could accelerate the adoption of tokenized RWAs by providing clarity for issuers on compliant tokenization structures, enabling more efficient secondary market trading of tokenized assets, supporting institutional adoption through clear custody and trading guidelines, and preserving the innovation potential of blockchain technology in modernising traditional asset markets.”
Whilst on the surface Trump’s victory means a victory for the US crypto sector, it may take years for a defined legislative bill to be passed in Congress due to not just conflicting interests from the Democrats, but also internally within the Republican Party.
