Anticipated Shifts in Cryptocurrency Regulation Under Trump’s Incoming Administration
As President-elect Donald Trump gears up for his second term, the regulatory landscape for cryptocurrencies in the United States is poised for significant transformation. A new wave of cryptocurrency Exchange-Traded Funds (ETFs) is expected to receive approval in the upcoming year, potentially marking a pivotal change for digital assets.
The Rise of Cryptocurrency ETFs
Industry experts, including Bloomberg’s ETF specialist Eric Balchunas, predict that dual Bitcoin and Ethereum ETFs from companies like Hasdex, Franklin Templeton, and Bitwise Invest are likely to be among the foremost candidates for approval. Despite these optimistic projections, recent rejections of Solana-related filings suggest that both Solana and XRP ETFs may need to await the new administration at the United States Securities and Exchange Commission (SEC) for their applications to be genuinely considered.
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Nevertheless, the journey to approval is fraught with complexity. Balchunas highlights “complex legal issues,” particularly concerning the classification of these tokens and their designation as “securities,” which must be addressed. On the other hand, Litecoin, perceived as a fork of Bitcoin, might be classified as a commodity by the SEC, potentially enhancing its approval prospects. Notably, new entrant Canary Capital is the sole applicant for a Litecoin or HBAR ETF. While Balchunas is optimistic about their chances, he remains cautious regarding the level of investor demand for these offerings.
Trump’s Pro-Crypto Regulatory Agenda
The expected surge in crypto ETF approvals aligns with Trump’s broader regulatory agenda that favors digital assets. On December 4, Trump announced Paul Atkins as a potential candidate for the new SEC chair, reinforcing his commitment to nurturing a crypto-friendly environment. This announcement follows the resignation of the current SEC chair, Gary Gensler, whose tenure concludes on January 20, coinciding with Trump’s inauguration.
Atkins, who served as an SEC Commissioner from 2002 to 2008 under President George W. Bush, is known for his advocacy of reducing regulatory burdens on financial markets. Trump expressed his confidence in Atkins, describing him as a “proven leader for common-sense regulations” in a Truth Social post. The President-elect emphasized Atkins’s conviction in the potential of capital markets and the pivotal role of digital assets in driving economic growth.
As the new administration prepares to take charge, attention is also turning to the Commodity Futures Trading Commission (CFTC) and its potential new leadership. Sources indicate that the incoming Trump administration might empower the CFTC to regulate certain cryptocurrency assets, thus further shaping the future of digital currency regulation in the U.S.
Overall, these anticipated developments are perceived as highly favorable for the broader cryptocurrency industry. The expected regulatory changes and a more supportive environment are likely to promote greater institutional adoption.
The total cryptocurrency market capitalization currently stands at $3.55 trillion, reflecting the sector’s growing significance in the global financial landscape.
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