The crypto market in the United States will be regulated by a single primary regulator, the Commodity Futures Trading Commission (CFTC).
This represents a shift from the Securities and Exchange Commission (SEC), which has been trumpeting the new administration of President Donald Trump’s strategic shift in a much more industry-friendly direction. This perhaps signals a new paradigm for cryptocurrency regulation in the country.
News and industry speculation in recent weeks have made it clear that the Trump administration will transfer oversight of cryptocurrency to the CFTC.
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It is simply a broader approach and part of a larger program. In other words, rewriting the regulatory framework to accommodate and foster innovation in the digital asset space.
For the SEC, under the leadership of Gary Gensler, the policy positions taken were significantly stricter because most cryptocurrencies are securities.
This is a position that has been met with strong resistance from many market members. In contrast, Trump’s presidency will likely move toward a more favorable regulatory environment for cryptocurrencies.
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Chris Giancarlo at the helm
Former CFTC Chairman Chris Giancarlo is rightly seen as a key player in this regulatory transition. Rumors of his designation as Trump’s “crypto czar” are growing.
If Giancarlo accepts this role, his considerable regulatory experience and pro-crypto stance will put him at the forefront of policymaking. One of the biggest expected policy changes is the expected dismissal of the SEC’s ongoing lawsuit against Ripple’s XRP.
The opinion expressed by Giancarlo that the matter will be dropped under the new administration could be a bullish indicator for the price of XRP and a positive sign that bodes well for the overall market sentiment.
This would significantly ease the strict financial regulations issued by the SEC and give the CFTC regulatory authority over cryptocurrencies.
One path proposed by the CFTC could be to treat digital assets (such as Bitcoin and Ethereum) as primarily commodities. This is to avoid the regulatory constraints currently imposed on cryptocurrencies.
Such a regulatory change could lead to a radical change in policy. How crypto exchanges and spot markets could be regulated. They pave the way for a regulatory environment conducive to technological and financial innovation.
Anticipated changes and their potential impact
The United States may be able to speed up approval processes for crypto ETFs, all of which fall under the jurisdiction of the CFTC. This potential regulatory change would be a golden opportunity for market expansion.
This is according to companies such as Bitwise and WisdomTree, which are at the forefront of promoting these products.
Additionally, the Trump administration’s reported investigations into a Strategic Bitcoin Reserve (SBR), a gathering concealing inflation and monetary uncertainty, is a similar goal to what other countries have done, e.g. Brazil’s proposal for a national Bitcoin reserve.
The United States is currently undergoing a regulatory overhaul, reflecting a broader global process of reviewing countries’ stances on cryptocurrency to create a more open and tolerant environment for its growth and integration into the broader financial system.
Trump’s campaign is touting the United States as a possible “crypto capital of the world” and could have an advantageous geopolitical positioning to benefit from the growth of the global digital asset economy.
If realized, these plans, alongside the expected easing of regulations, could make the United States a very attractive hub for crypto innovation and investment.
