Crypto Industry Anticipates Regulatory Shift with New Administration

A New Era for Crypto Regulation

The cryptocurrency industry is preparing for a potential shift in regulatory approach following the upcoming U.S. presidential election. With expectations of a more crypto-friendly administration, companies like Bitwise and Canary Capital are gearing up to introduce new products. Ripple and others aim to push forward crypto legislation in the new Congress.

Political Perspectives on Crypto

Both presidential candidates, Donald Trump and Kamala Harris, are perceived to have a more favorable stance toward digital assets compared to the current administration. Trump has explicitly promised to be a "crypto president," while Harris, although not detailed in her crypto plans, has shown support for digital asset innovation. Influential figures, such as Mark Cuban, have criticized current regulatory crackdowns, signaling a potential shift.

SEC's Current Stance and Future Expectations

The Securities and Exchange Commission (SEC), under Chair Gary Gensler, has been rigorous in its enforcement actions against major crypto firms. However, the industry is hopeful for changes, especially with potential new leadership. Gensler's term extends until 2026, but any changes in administration could influence the SEC's approach. The industry is advocating for cryptocurrencies to be regulated like commodities, a stance supported by significant political donations to pro-crypto candidates.

Legislative and Market Developments

Recent legislative attempts, such as the bipartisan vote to overturn the SEC's SAB 121 guidance, illustrate the industry's drive for regulatory reform. Although vetoed by President Biden, there is optimism that future administrations might overturn such decisions. This guidance has been a hurdle for banks, discouraging them from engaging with crypto assets.

Positive Signs and Future Outlook

Recent SEC actions, like granting "no objection" to certain crypto custody practices, indicate a possible thaw in regulatory attitudes. The approval of bitcoin and ether ETFs earlier this year and new filings by Bitwise and Canary Capital for XRP-tracking products reflect a belief in a more favorable regulatory environment. As the political climate evolves, crypto executives remain hopeful for a supportive legislative framework that will spur innovation and market growth.