The cryptocurrency industry spent big in the 2024 election, and its investment is about to pay off in the incoming Congress and administration.
For more than a decade, there was a lack of clarity from federal regulators that left industry advocates frustrated, especially as the Biden administration went after crypto giants including Coinbase and Ripple for allegedly selling unregistered securities and urged caution with banks and investors.
But President-elect Trump, who once dismissed crypto as a “scam,” embraced it on the campaign trail, becoming the first presidential candidate to accept digital assets. Over on Capitol Hill, lawmakers from both sides of the aisle could send comprehensive crypto legislation to his desk during the next Congress.
“With a bipartisan, pro-crypto Congress and pro-crypto president next year, the pieces are in place to get smart policy — including stablecoin and market structure legislation — across the finish line that will shape the American crypto industry for years to come,” Kristin Smith, CEO of the Blockchain Association, told The Hill.
“Looking ahead to 2025, it’s critical that the industry works together on these policy solutions, presenting a cohesive vision to our leaders in Washington. Political power is fleeting, so it’s critical we take advantage of this moment to ensure crypto has a bright future ahead in the United States."
Here are some policies on the crypto industry’s wish list.
There have been several sweeping crypto bills introduced in both the House and the Senate in recent years, but industry advocates tend to favor the Financial Innovation and Technology for the 21st Century Act, also known as FIT21.
The 250-plus-page bill lays out guardrails for the industry and draws clear lines between the regulatory authority of the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC).
The legislation is “Very Pro-Crypto,” according to Stand with Crypto, a nonprofit advocacy group that launched last year with the help of Coinbase.
In May, FIT21 became the first major crypto bill to pass the House despite opposition from SEC Chair Gary Gensler.
The bill never came up for a vote in the Senate, meaning lawmakers will have to start the legislative process again when Congress returns in January.
Incoming House Financial Services Chair French Hill (R-Ark.) told CNBC last week that a "regulatory structure bill for digital assets” is a “top priority” for GOP leadership and that Republican Majority Leader Steve Scalise (La.) plans to move one within the first 100 days of the 119th Congress.
“We need a market structure for digital assets. We don't have rules of the road. Under Chairman Gensler, we had just regulation by enforcement. This is not helping America succeed,” Hill said.
Gensler is an unpopular figure known for his frequent enforcement actions against industry players, and the Trump administration is expected to take a lighter touch with the crypto industry than the Biden administration.
The incoming president’s initial appointments have made industry leaders optimistic for future regulatory relations.
Trump thrilled crypto advocates this month when he tapped former SEC Commissioner Paul Atkins to replace Gensler, who announced last month that he would step down on Inauguration Day.
Atkins is known for his embrace of crypto. When Trump nominated Atkins, the president-elect said in a Truth Social post that the former commissioner “recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before."
He also announced Sunday the formation of a “crypto council,” one of the priorities outlined in a letter Smith sent to the incoming president and members of Congress last month.
The council will be chaired by “our White House A.I. & Crypto Czar, David O. Sacks,” Trump said.
One of the biggest outstanding questions now is whom Trump will pick to lead the CFTC. Contenders include former CFTC Commissioner Brian Quintenz, who is now head of policy for Andreessen Horowitz’s crypto firm; CFTC Commissioner Summer Mersinger, a former top staffer to incoming Senate Majority Leader John Thune (R-S.D.); Josh Sterling, a partner at Milbank LLP; and Neal Kumar, a partner at Willkie Farr & Gallagher, Politico reported this week.
The Hill has contacted a Trump spokesperson for comment.
"The war on crypto in the US led by the SEC under Gary Gensler is over which, hopefully, leads to a healthy regulatory relationship between the industry and financial regulators,” Stuart Alderoty, Ripple’s chief legal officer, said in a statement to The Hill.
The industry is also pushing to roll back SEC guidance issued in 2022 that requires public companies to present crypto assets held on behalf of users as liabilities since they pose “significant increased risks” to the company.
The guidance, known as SAB 121, has been a thorn in the side of the industry, which says it has sidelined lenders.
Congress sent a bipartisan resolution overturning the guidance to President Biden’s desk in May, but Biden vetoed it, saying the “Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues.”
In her letter to Trump and members of Congress, Smith called again for lawmakers to overturn the “punitive, anti-crypto" guidance.
“For too long, the crypto industry has been subject to a hostile SEC and its regulation-by-enforcement approach,” Smith wrote.
