Trump's Crypto Impact: Three Ways He's Shaped the Market

Since Donald Trump's inauguration, the crypto market has witnessed significant shifts, with many of the industry's long-awaited wishes coming to fruition. Here are three key ways Trump has impacted the crypto market so far:



1. Regulatory Clarity and Certainty
Trump's administration has taken steps to provide regulatory clarity and certainty for the crypto industry. One of the most notable moves was the rescission of Staff Accounting Bulletin 121 (SAB 121) by the Securities and Exchange Commission (SEC) under Trump's leadership. SAB 121 required crypto custodial banks to carry customer assets on their balance sheets, which was a burden for no other asset class. Its rescission has provided regulatory clarity and reduced the barriers to entry for financial institutions looking to custody and invest in cryptocurrencies.

Kian Sarreshteh, co-founder and CEO of digital investing platform InvestiFi, stated that repealing SAB 121 gives financial institutions more comfort in considering custodying crypto, which should pave the way for a lot more regulated institutions to adopt crypto as an asset class that they support on behalf of their clients (Source: NBC New York, "Cryptocurrency enthusiasts hopeful for Trump presidency").

2. Promotion of Stablecoins and Fair Access to Banking Services
Trump's executive order emphasizes the promotion of USD-backed stablecoins worldwide and ensuring fair and open access to banking services. This focus on stablecoins aims to reduce market volatility and make cryptocurrencies more accessible to mainstream users. By promoting stablecoins, the Trump administration is fostering a more stable and user-friendly crypto ecosystem.

Additionally, the emphasis on fair access to banking services encourages more financial institutions to engage with the crypto market, further driving adoption and growth.

3. Establishment of the President's Working Group on Digital Asset Markets
Trump's executive order established the President's Working Group on Digital Asset Markets (PWGDA), tasked with developing a Federal regulatory framework governing digital assets, including stablecoins, and evaluating the creation of a strategic national digital assets stockpile. The PWGDA's work has the potential to significantly shape the crypto market's future by providing regulatory clarity, promoting innovation, and fostering market stability.

The PWGDA's recommendations could lead to increased investment, innovation, and market stability, as well as the potential creation of a national digital asset stockpile, which could further legitimize cryptocurrencies and boost market confidence.

In conclusion, Trump's administration has made significant strides in shaping the crypto market, with regulatory clarity, stablecoin promotion, and the establishment of the PWGDA being key factors. These moves have contributed to the overall growth and stability of the crypto market, and the industry's long-awaited wishes have largely come to fruition under Trump's leadership. As the crypto market continues to evolve, it will be essential to monitor the progress of the PWGDA and the potential impact of its recommendations on the market's future.