Donald Trump’s potential return to the White House is viewed as a positive development for the cryptocurrency and digital asset sector, according to a recent report from Compass Point Research & Trading.
“Trump is supportive of crypto. His campaign is accepting crypto donations,” the firm noted.
In June, Trump engaged with a group of crypto miners to explore how the crypto industry could enhance U.S. energy production, distribution, and the development of artificial intelligence (AI) and data centers.
Trump has also advocated for all Bitcoin (BTC) mining to be based in the U.S. His pro-crypto stance is reflected in the Republican National Committee’s 2024 Platform, which pledges to end the crackdown on crypto and prevent the establishment of a central bank digital currency (CBDC). The platform additionally supports the self-custody of crypto assets and BTC mining.
Furthermore, Trump has chosen Senator J.D. Vance (R-OH) as his vice-presidential candidate. Vance, who has a pro-crypto background, is circulating draft legislation to address crypto regulation by the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). His proposed bill is seen as more industry-friendly than the Financial Innovation and Technology for the 21st Century Act (FIT21), which recently passed the House with broad bipartisan support. Vance also personally holds between $100,000 and $250,000 in BTC.
“Under a Trump/Vance administration, the prospects of crypto legislation becoming law improve significantly. Trump could accelerate crypto legislation,” Compass Point commented.
Currently, stablecoin legislation is expected to spearhead the crypto movement in Congress. However, Trump’s crypto-friendly stance, combined with bipartisan support for FIT21, suggests that broader crypto legislation could be enacted into law by 2025 or 2026.
Compass Point’s report emphasizes bipartisan support as a key factor in improving the outlook for crypto policy. Senate Agriculture Committee Chair Debbie Stabenow (D-MI) is circulating a draft crypto bill to grant the CFTC authority over digital assets. Although the bill’s text is not yet available, Stabenow aims to have it voted out of committee before the August break. Her collaboration with House Financial Services Committee Chair Patrick McHenry (R-NC), who successfully passed FIT21 in the House, indicates potential for bipartisan cooperation on crypto regulation.
Looking ahead to 2025, Compass Point suggested that a Trump administration with a Republican-controlled Congress would have a two-year window to pass crypto legislation. The passage of FIT21 and Stabenow’s efforts demonstrate a shifting landscape favoring comprehensive crypto legislation.
“This change improves the odds of comprehensive crypto legislation becoming law in the 119th Congress. We place odds at better than 60% and will revisit this outlook following the November election,” Compass analysts stated.
A change in administration would likely bring a new SEC Chair, with Hester Peirce, a known crypto supporter, as a potential candidate. This shift in SEC leadership could reduce enforcement actions and expedite the resolution of ongoing cases, such as the SEC’s lawsuit against Coinbase. It could also lead to the end of current crypto investigations and provide an opportunity for the SEC to define the criteria for when a digital asset is considered a security.
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