The crypto market in the United States will be regulated by a single main regulator, the Commodity Futures Trading Commission (CFTC)
This represents a shift from the Securities and Exchange Commission (SEC) that’s trumpeting President Donald Trump’s new administration’s strategic redirection into a much more industry-supportive direction. This perhaps signals a new paradigm for cryptocurrency regulation in the country.
News and industry speculation in recent weeks have made clear that the Trump administration is going to transfer the oversight of the cryptocurrency to the CFTC.
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This is just a broader move and component of a wider agenda. That is, to rewrite the regulatory framework to accommodate and foster innovation in the digital asset space.
For the SEC, under Gary Gensler’s stewardship, the policy stances adopted were significantly more stringent for most cryptocurrencies are securities.
This is a position that was met with strong pushback from many members of the market. In contrast, Trump’s presidency is likely to turn towards a more supportive regulatory environment around cryptocurrencies.
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Chris Giancarlo at the Helm
Former CFTC Chair Chris Giancarlo is regarded as a key player in this regulatory transition for good reason. Rumors about his designation as Trump’s ‘Crypto Czar’ are running rampant.
If Giancarlo accepts this mantle, his considerable regulatory experience and pro-crypto stance would set him on the front line of policymaking. One of his biggest anticipated policy shifts is the expected dismissal of the SEC’s ongoing lawsuit against Ripple’s XRP.
Giancarlo’s expressed view that the case will be dropped under the new Administration could be a bullish bellwether for XRP’s price and a positive bodes well for the broader market sentiment.
This would greatly ease the strict financial regulations issued by the SEC and give the CFTC the regulatory authority on cryptocurrencies.
One proposed path taken by the CFTC might be to treat digital assets (such as Bitcoin and Ethereum) as preponderately commodities. This is to avoid the regulatory constraints currently imposed on cryptocurrencies.
Such a regulatory shift could bring about radical change to policy. To how crypto exchanges and spot markets could be regulated. They set the stage for a regulatory environment conducive to technological and financial innovation.
Anticipated Changes and Their Potential Impact
The U.S. may be able to speed up the approval processes for the likes of crypto ETFs, all under the purview of the CFTC. This potential regulatory change would be a golden opportunity for the market’s expansion.
This is according to companies such as Bitwise and WisdomTree, which are on the front lines of the push for these products.
Furthermore, the Trump administration’s reported investigations on a Strategic Bitcoin Reserve (SBR), a gathering covered up inflation and monetary uncertainty, is a goal like what some other world has been doing, for example, Brazil’s proposition of a national Bitcoin reserve.
The U.S. is experiencing a proposed regulatory revamp, mirroring a broader global process of reviewing the stance countries have taken regarding cryptocurrency to create a more open and accepting environment for its growth and integration into the broader financial system.
Trump’s campaign features the U.S. as a possible “crypto capital of the world” and might have geopolitically advantageous positioning to benefit from the growing global digital asset economy.
If realized, these plans alongside the expected loosening of the regulatory leash could make the US a super attractive hub for crypto innovation and investment.
