The Trump era has arrived, looking ahead to three key cryptocurrency bills in the United States
Undeniably, every step of the crypto-friendly policies in the Trump 2.0 era is profoundly reshaping the boundaries of the crypto market.Authors | Hedy Bi, Jason Jiang
Before Trump officially took office in the White House, the crypto market had already started to celebrate in advance, cashing in on policy news. This morning, due to Trump's official nomination of Paul Atkins as SEC Chairman, Bitcoin broke through $100,000. Since Trump's election victory, Bitcoin has risen from $68,000 on November 5 to $100,000, achieving a 47% return in just one month. In this article, the author will analyze how policy changes shape the market landscape from the perspective of U.S. crypto policy and the potential growth directions in the new landscape.
A "Tough and Rough" Shift in Crypto Regulation Towards More Openness and Friendliness
During his campaign, Trump made ten crypto-friendly commitments to the market, including establishing a strategic Bitcoin reserve. The nominated SEC Chairman Paul Atkins is also known for his friendly attitude towards cryptocurrencies, advocating for reduced regulation to support market innovation. Trump mentioned today that Paul "understands that crypto assets and other innovations are crucial for making America greater than ever before and believes in the commitment to strong, innovative capital markets." Paul has also criticized the SEC's hefty fines for harming shareholder interests, advocated for flexible regulatory strategies, and served as co-chair of the Token Alliance. Trump's move to leverage Paul Atkins' previous experience in promoting the crypto industry changes the SEC's previous punitive approach to the crypto sector over the past year, bringing the concept of "financial freedom" into U.S. financial regulatory agencies.
In addition, other members of Trump's team have also provided strong support for the regulatory focus on crypto finance: over 60% of nominated cabinet members have publicly stated that they own Bitcoin or support the development of crypto finance, or indirectly support the growth of crypto assets.
In addition to Trump's commitments in the crypto market and the previously proposed "Financial Innovation and Technology Act of the 21st Century" (FIT 21 Act), the recent Tornado Cash incident also marks a shift towards a more open and friendly direction in U.S. crypto regulation. At the end of November, the Fifth Circuit Court of Appeals ruled that the Treasury's sanctions against Tornado Cash's immutable smart contracts were illegal, stating that these smart contracts do not meet the legal definition of "property." This ruling provides significant support for the legitimacy of smart contracts, allowing developers and users to use these protocols without facing direct conflicts with traditional legal frameworks, thus promoting finance towards a more inclusive and friendly direction, which directly benefits the booming decentralized finance (DeFi) sector.
"America First" Requires More Freedom for Industry and Financial Capital
Financial freedom not only opens up greater development space for the crypto market but also indicates that a profound market integration is brewing as crypto assets connect with traditional financial assets (TradFi). With the development of the digital society and the push from future technologies like artificial intelligence (AI), the way value is created is accelerating its transformation. Former Alibaba strategist Zeng Ming pointed out that general artificial intelligence (AGI) will become a core technological breakthrough in productivity in the future, closely integrating with crypto assets to give rise to a large number of new digital assets.
As a value network technology connecting the digital society and the real world, blockchain will play a key role for crypto assets in this transformation. Under the impetus of the "America First" policy, Trump proposed an AI version of the "Manhattan Project," intending to elevate AI technology to a national strategic height and vigorously promote the industrialization process.
In addition to the future digital society being inseparable from crypto assets driven primarily by AI, Standard Chartered Bank has also stated that almost any real asset in the real world can be tokenized, and it is expected that by 2034, global demand for tokenized assets will reach $30 trillion. Whether it is the future development of the digital society needing crypto assets or the circulation of assets in the real world requiring tokenization, the integration of crypto assets with traditional financial assets has the potential to far exceed the "Great Merger Era" of the 1930s and the "Internet Merger Era" of 2000, the former giving rise to $600 billion in industrial consolidation and the latter pushing the market size to $3 trillion.
The integration process is now unstoppable. Whether it is the promotion of crypto asset ETFs or the emerging track represented by RWA (real-world assets), just the stablecoin application alone has created a market value of over $200 billion. With the continued penetration of crypto technology, the entire financial market's "cryptoization" process has already begun, which will reshape the global financial landscape and give rise to a new capital ecosystem that is more open and integrated.
The Three Key Crypto "Commitments" That Will Impact the Market
Whether it is the announcement of establishing a strategic Bitcoin reserve or the nomination of a crypto-friendly SEC chairman, Trump's election seems to usher in the friendliest regulatory environment for the crypto industry in history, thus opening up the recent upward channel for Bitcoin. However, in the medium to long term, the real driving force pushing the crypto industry forward is clearly not the price of Bitcoin, but whether Trump can fulfill those verbal crypto commitments and start providing more space for the crypto market from a legislative level. If Trump can leverage his high prestige within the party and the recent Republican victories in both the House and Senate elections to actively promote key legislation represented by the following three bills, it may bring a new situation to the crypto industry.
The FIT 21 Act Will Be Prioritized, Bringing DeFi Innovation "Back" to the U.S.
The FIT 21 Act may be the bill that Trump prioritizes after taking office. This bill, hailed as "the most important" crypto legislation to date, not only clearly defines when cryptocurrencies are commodities or securities but will also end the "tug-of-war" between the SEC and CFTC in crypto regulation. The U.S. House of Representatives previously passed this bill with an overwhelming majority and submitted it to the Senate, but the latter has not taken decisive action. However, with Trump's ascension, the market generally expects the progress of this bill to accelerate.
Once the FIT 21 Act is passed, compliant trading platforms and crypto-listed companies will emerge more frequently, and the clear attribute standards will make tradable tokens more abundant, providing new opportunities for spot ETFs and other crypto financial products. One of the reasons why Ethereum ETF applications have struggled to pass is due to vague qualitative definitions; the SEC has long believed that Ethereum, after transitioning to a PoS mechanism, resembles a security. It wasn't until the SEC and Wall Street found a "balance point," clarifying that Ethereum ETFs without staking are not securities, that progress could continue. After the bill is passed, for cryptocurrencies clearly categorized as "digital commodities," it will be easier to launch spot ETFs and related financial products, provided they meet relevant prerequisites. We may see more types of cryptocurrencies like SoL, XRP, HBAR, LTC, etc., with spot ETFs next year.
Several institutions have submitted Solana ETF applications
The FIT 21 Act will also promote innovation in decentralized applications, especially in the DeFi sector. The FIT 21 Act clearly states that if relevant tokens are deemed decentralized and functional, they will be considered digital commodities and not subject to SEC regulation, and as long as the degree of centralization meets the requirements, they can obtain a certain exemption period, which will encourage more DeFi projects to evolve towards greater decentralization. The bill also requires the SEC and CFTC to study the development of DeFi, assess its impact on traditional financial markets, and explore potential regulatory strategies. Coupled with the exemption period factor, this will attract more DeFi projects to "return."
Moreover, under the influence of friendly policies and expectations of interest rate cuts, more traditional funds will flow into DeFi seeking higher returns, further stimulating DeFi's reinvention. A clear trend is that DeFi will continue to expand collateral assets, bringing more off-chain liquidity on-chain. This will promote the deep integration of DeFi with RWA, allowing tokenized assets like U.S. Treasury bonds and real estate to be used for collateral or lending, enriching the composability and imaginative space of on-chain finance, and allowing DeFi's influence to spread off-chain. The RWA sector will also benefit from this integration, leading to more substantial returns and accelerating bidirectional expansion between off-chain and on-chain.
The value of DeFi within the Bitcoin ecosystem should not be overlooked. While penetrating off-chain through ETFs, Bitcoin also shows more possibilities within the on-chain ecosystem. Considering that the Bitcoin market is primarily composed of long-term holders, coupled with the fact that spot ETFs keep market liquidity at a lower level, the resulting Bitcoin lending sector may welcome new opportunities. Since the SEC is likely to allow Ethereum spot ETFs to be staked, staking projects within the DeFi ecosystem may receive widespread attention.
U.S. Stablecoin Legislation Back on the Agenda
In 2023, the U.S. House Financial Services Committee passed the "Payment Stablecoin Clarity Act," but it did not receive approval from the House. In October of this year, crypto-friendly Senator Bill Hagerty submitted a similar draft again. Coupled with Trump's previous commitment not to promote a CBDC issued by the Federal Reserve, and the FIT 21 Act defining licensed payment stablecoins and emphasizing the importance of the licensing system, stablecoin-related legislation may be back on the agenda after Trump takes office.
Stablecoin legislation will directly impact the issuance of U.S. dollar stablecoins and related payment institutions. Some smaller or algorithmic stablecoins may be forced out of the market, while legitimate stablecoins (like USDC) will occupy a larger market share. At the same time, as legislation clarifies compliance requirements, traditional payment service providers will accelerate the adoption of compliant stablecoins, enhancing their availability and usability in daily transactions. Related enterprises and users will also be more willing to accept stablecoins as a supplement to the existing payment system, rather than solely for cryptocurrency trading use cases. The market share of stablecoins in cross-border transfers and settlements will continue to rise, with user volume and settlement scale expected to approach or even surpass institutions like Visa.
Furthermore, whether directly obtaining returns through underlying assets (such as government bonds, money market funds, etc.) and distributing them to relevant participants, or leveraging DeFi protocols to gain on-chain returns, various yield products based on compliant stablecoins will continue to emerge and gain user favor, but care should be taken to avoid making stablecoins exhibit characteristics of investment contracts when designing yield mechanisms.
The Repeal of the SAB 21 Proposal May Restart, Solving the Crypto Asset Custody Dilemma
Whether it is the development of spot ETFs and other crypto financial products or the growth of RWA, stablecoins, and DeFi, all will boost the demand for crypto custody services. This will force a restart of the repeal of the SAB 121 (Staff Accounting Bulletin No. 121) proposal. SAB 121 was issued by the SEC in 2022, requiring companies to record custodial crypto assets as liabilities, which significantly increased corporate leverage ratios, affecting financial health and credit assessments, making related enterprises reluctant to provide custody services.
Trump promised during his campaign to repeal this announcement after taking office. The most direct benefit of repealing SAB 121 is to reduce the compliance burden on crypto custody institutions, allowing banks and other regulated entities to more easily enter the crypto custody field, thereby attracting more institutional investors into the market. Due to the accounting treatment requirements of SAB 121, many banks and financial institutions have previously been relatively cautious about crypto financial products like spot ETFs; the repeal will reduce the complexity for financial institutions managing these crypto assets. Stablecoin providers and payment-related businesses will also be affected, especially those projects integrated with the traditional financial system. The repeal of SAB 121 may create a more relaxed regulatory environment for these enterprises, aiding their development of core functions like payments and settlements. The currently popular narrative around RWA will benefit from this, allowing more traditional custody institutions to manage tokenized assets more flexibly, thus attracting more financial institutions willing to participate.
Undeniably, every step of the crypto-friendly policies in the Trump 2.0 era is profoundly reshaping the boundaries of the crypto market. From regulation to accounting standards, every seemingly minor change carries deep strategic significance. Paul Atkins' nomination signals a more lenient crypto regulatory environment, while institutional reforms at the asset level are equally noteworthy. The new FASB regulations (ASU 2023-08), effective December 15, 2024, require companies to record the fair value of their held crypto assets in financial statements. This means that the value fluctuations of crypto assets like Bitcoin held by companies will directly reflect in their financial statements, significantly impacting net income. The implementation of this rule will encourage more companies to include mainstream crypto assets like Bitcoin on their balance sheets. Additionally, Microsoft held a board meeting on December 10 to formally discuss whether to include Bitcoin in its corporate strategic reserves, providing a high-profile industry signal for this trend.
As Bitcoin breaks through $100,000 today, OKX CEO Star stated on the X platform that this is "the power of vision and technology." The path of integration between tradition and innovation will undoubtedly reshape the new order of global capital markets.
