Under a Possible Second Term for Trump, What Could Happen to Cryptocurrency Regulation? | The Regulatory Review

The Trump Administration is proposing changes that could significantly impact the American cryptocurrency landscape.

President Donald J. Trump’s views on cryptocurrencies have shifted drastically since his previous term. Despite expressing skepticism about digital assets in 2019, he attended a Bitcoin conference in June 2024, where he committed to making the United States the “crypto capital of the planet.” During the conference, he made several promises, including the stockpiling of cryptocurrency in the U.S., ensuring all cryptocurrencies are mined in the country, and the dismissal of Gary Gensler, who was then the Chair of the U.S. Securities and Exchange Commission (SEC).

Currently, the total value of all cryptocurrencies exceeds $1 trillion, with Bitcoin’s value surging by 40 percent since President Trump’s election. Given the rising importance and global acceptance of cryptocurrencies, it is pertinent to consider potential legal and regulatory modifications that might happen in a second Trump Administration.

President Trump pledged to replace Gensler “on day one,” and the SEC announced Gensler’s resignation effective January 20, 2025. Under Gensler’s leadership, the SEC focused on enforcement actions against fraud and securities law violations, including high-profile cases involving large cryptocurrency companies and celebrities.

President Trump nominated Paul Atkins on January 7, 2025, to head the SEC. Atkins, a former SEC Commissioner, has a history of voting against enforcement actions and currently leads a consulting firm catering to cryptocurrency companies.

The SEC, under Atkins, has already begun veering away from enforcement-focused regulation. The Commission requested pauses in litigation against prominent cryptocurrency entities like Binance and Coinbase to explore potential resolutions and review crypto-related matters internally.

A significant regulatory change in the current Administration could involve redefining how digital assets are categorized. While Gensler argued that most digital assets are securities, the U.S. Commodity Futures Trading Commission (CFTC) has classified several cryptocurrencies, including Bitcoin, as commodities, which could affect their regulation and access to the financial sector.

The Trump Administration aims to provide regulatory clarity by supporting the CFTC’s classification of cryptocurrencies as commodities. Over the next four years, the CFTC might gain more oversight over significant aspects of digital assets, such as Bitcoin and Ethereum markets and the exchanges where they operate.

On February 13, 2025, Trump nominated Brian Quintenz, a vocal advocate for cryptocurrencies, to head the CFTC, further signaling the Administration’s support for digital assets.

There is also speculation about revising taxation policies on cryptocurrencies to incentivize investment and usage. Decentralized Finance platforms and their regulatory uncertainties have prompted initiatives to establish clearer guidelines for their operation.

The Trump Administration’s initiatives, such as the “Presidential Working Group on Digital Asset Markets” and the SEC task force for regulatory framework development, could foster innovation by reducing regulatory burdens and promoting compliance.

The decentralized nature of digital assets poses challenges related to anti-money laundering and privacy concerns. The Administration may find a balance between privacy rights and regulations to encourage cryptocurrency adoption while combating illicit activities.

President Trump opposes creating a central bank digital currency but supports stablecoins as a medium of exchange. The U.S. could become a hub for mining and trading cryptocurrencies, aligning with the President’s goal of energy dominance by promoting domestic processing and mining activities.

Furthermore, there are discussions around establishing a U.S. Bitcoin reserve and strategic legislation to purchase significant amounts of Bitcoin over the coming years, potentially shaping the American cryptocurrency landscape.

By implementing a clearer regulatory framework and providing economic incentives, the Trump Administration could bolster cryptocurrency adoption and blockchain innovation, potentially leading to institutional acceptance in the financial sector.

A regulatory shift, as proposed by the Trump Administration, could attract digital asset companies and professionals back to the United States, bolstering blockchain development domestically. This shift in attitude could reshape the cryptocurrency industry in the country.

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