After years of uncertainty around digital assets in the United States, President Donald Trump has vowed to make America the world’s leading crypto nation.
The newly elected US President has already signed an executive order to establish regulatory clarity around digital assets.
The order includes the creation of a “digital asset national stockpile,” along with prohibiting the creation of a Central Bank Digital Currency (CBDC).
Trump also upheld his promise and signed a “full and unconditional” pardon for Silk Road mastermind Ross Ulbricht.
United States Moving In Right Direction
While the US has been at the forefront of advanced technology for generations, its government has implemented harsh regulations and policies for the crypto and blockchain industry.
Will Martino, co-founder and president of blockchain company Kadena, told Cryptonews that this has placed a massive disadvantage on those working in the Web3 industry in the US.
However, Martino believes that the country is finally moving in the right direction. “Only time will tell, but it would be foolish to not be incredibly bullish on the US-based crypto market,” he said.
Moving Beyond Bitcoin
Martino added that he hopes to see the establishment of a US strategic crypto reserve that includes all legitimate US-based crypto projects.
While Trump has expressed interest in creating a strategic Bitcoin reserve, Martino believes that a number of projects should be supported.
“If they’re serious about supporting the industry, they must back the US market, not just select favorites,” Martino said. “Diversifying across the entire market sends a clear message that the Trump Administration believes in the broader potential of crypto and blockchain, fostering innovation and growth across all sectors.”
Avidan Abitbol, project director for the Data Ownership Protocol (DOP), further told Cryptonews that the US Securities and Exchange Commission (SEC) should take a fresh look at crypto exchange-traded funds (ETFs) beyond Bitcoin (BTC).
“If the SEC creates a clear approval process for these products, it could give institutions an easier way to gain exposure to the crypto market,” Abitbol said.
Crypto-based exchange-traded fund applications have reportedly doubled after former SEC Chair Gary Gensler’s resignation.
According to Bloomberg analyst Eric Balchunas, 33 crypto asset ETF filings have currently been submitted to the US SEC.
The list of crypto ETFs filed with the regulator includes Bitcoin and Ether products, but asset managers have filed for Solana, Litecoin, Doge and even a Trump exchange-traded fund.
End Regulation-By-Enforcement
Industry experts also hope to see the end of regulation-by-enforcement now that Trump is in office.
There has been an exodus of talent in the US due to regulators being unable to provide clarity around crypto and blockchain. As a result, many US regulators facilitate a regulation-by-enforcement approach.
Dave Hendricks, CEO and co-founder of digital asset firm Vertalo, told Cryptonews that an end to regulation-by-enforcement is necessary.
“This ‘pin the tail on the donkey’ approach to regulation left too much to chance, and too many people guessing, and increased legal fees as well as other fees that are overlooked, like business insurance,” Hendricks said.
Echoing this, Martino mentioned that US-based Web3 companies are, “currently playing a game in which we ‘think’ we know the rules. But at any time they can change and we’ve immediately lost.”
This is why clear policies and regulations are so important for US-based crypto and blockchain companies.
From an investor and technology perspective, Martino believes greater clarity around rules and regulations will allow for accelerated innovation and real-world adoption.
Repeal The Bank Secrecy Act
Natalie Smolenski, executive director of Texas Bitcoin Foundation, told Cryptonews that she hopes to see the Bank Secrecy Act repealed under the Trump Administration.
Elizabeth Warren introduced The Bank Secrecy Act to the US Senate on July 27, 2023. The legislation dates back to the 1970s and establishes program, recordkeeping and reporting requirements for national banks, federal savings associations, federal branches and agencies of foreign banks.
If this legislation were to pass, digital asset providers would be required to adhere to many of the same regulations as traditional banks.
“The Bank Secrecy Act lays the groundwork for the government to force all economic transacting to go through banks, which the state controls. That would be a travesty for human liberty,” Smolenski said. “In a free society, using the banking system or any other financial service should be a free choice, not a legal requirement.”
Abitbol is hopeful that the Trump administration may be open to innovative solutions like zero-knowledge proofs (ZKPs).
“ZKPs could be the answer to a big problem in crypto: how do we keep transactions private while still making sure everything’s above board? With ZKPs, the software can check if a transaction is legit without needing to see all the nitty-gritty details. It’s compliance without the privacy trade-off,” he said.
Better Crypto Tax Relief Efforts
Tax policies around digital assets remain a challenge for many Web3 companies and investors.
A report published by the US Internal Revenue Service (IRS) in June 2024 states that centralized crypto exchanges (CEXs) and other brokers will be required to report the sales and exchanges of digital assets.
While the new tax guidelines are intended to help crypto investors, additional clarity is needed. Abitbol mentioned that he is keeping an eye out for potential tax reforms.
“There’s talk about eliminating capital gains taxes on US-based cryptocurrencies, which could make it more attractive for people to use crypto for everyday transactions. This could be a game-changer for adoption,” he said.
Challenges to Consider
While it’s notable that Trump has already started taking crypto-friendly measures, challenges remain.
Martino pointed out that the amount of misinformation, fear, and uncertainty around blockchain technology is still problematic.
“Heads of industry, politicians, and policymakers still do not understand the difference between cryptocurrency and blockchain technology, nor do they understand the massive advancements both can provide our country and citizens. There is a massive educational piece and a new narrative that needs to be told,” he remarked.
While education is a huge factor to consider, passing lasting legislation is complicated.
Daniel Polotsky, founder of Bitcoin ATM company CoinFlip, told Cryptonews that while the regulatory agencies in the executive branch can foster a pro-crypto environment, it can be undone by future administrations without legislation.
“With a narrow majority in both chambers, Republicans will likely have to work with Democrats to pass legislation, and also have to prioritize it so that it gets done before midterm elections,” Polotsky said.
The post Crypto Community Voices Policy Changes Needed Under Trump Administration appeared first on Cryptonews.
