Trump Era: Crypto-Friendly SEC and Banking Committee Ahead

Bernstein predicts a crypto-friendly SEC and Senate under Trump, with accelerated legislation on stablecoins and clearer asset classifications.

Trump Era: Crypto-Friendly SEC and Banking Committee Ahead
  • A report indicates that a more crypto-friendly Securities and Exchange Commission (SEC) and Senate Banking Committee are likely to emerge following the recent U.S. election results.

  • Bernstein predicts that there will be accelerated progress on both stablecoin and market structure legislation.

  • The brokerage firm anticipates a reevaluation of a broader range of crypto assets.

Regulatory Clarity Expected

The outcome of the U.S. election is expected to enhance regulatory clarity for digital assets. With Donald Trump's victory in the presidential race and the Republican Party gaining control of the Senate, Bernstein's research report suggests a shift towards a more favorable environment for cryptocurrencies.

  • Bernstein stated, "We expect a new regime of crypto rule making," noting that this significant change is not yet reflected in current market pricing.

Positive Developments for Stablecoins

The report highlights that faster advancements are anticipated for legislation concerning stablecoins and market structures. This is seen as beneficial for major stablecoin issuers like Circle and Paxos, as well as leading U.S. cryptocurrency exchanges and broker-dealers.

Ongoing Legal Challenges for the SEC

Bernstein mentions that the SEC is currently engaged in legal disputes with prominent players in the crypto industry, including Coinbase, Robinhood, and Binance, along with decentralized finance (DeFi) and stablecoin companies.

  • Analysts led by Gautam Chhugani project that in the medium term, there will be clearer definitions distinguishing digital assets from securities, alongside a progressive framework for registering digital asset securities with the SEC.

Anticipated Rerating of Crypto Assets

The brokerage firm expects a reevaluation of the broader crypto asset market, which has faced uncertainty regarding the classification of many assets as securities. Additionally, they foresee asset managers introducing more exchange-traded fund (ETF) products based on various cryptocurrency tokens.

Focus on Bitcoin Reserve and Mining Growth

The report also indicates that there will be positive movements towards establishing a national bitcoin reserve, aligning with Trump's pre-election commitments, and an increased emphasis on promoting mining activities within the U.S.

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