Trump's victory drives new opportunities in crypto regulation: CFTC to launch digital sandbox, Circle focuses on stablecoin legislation

The 2024 United States presidential election recently concluded, with Donald Trump, who had previously expressed support for cryptocurrencies, being elected as the 47th President of the United States. The industry generally expects Trump to adopt a stance of "smart regulation" and establish a regulatory framework for cryptocurrencies in the United States, attracting crypto startups and industry professionals back to the country.

Caroline Pham, a commissioner from the U.S. Commodity Futures Trading Commission (CFTC), and Dante Disparte, Chief Strategy Officer of Circle, the issuer of the stablecoin USDC, shared their views at the Singapore Fintech Summit. They believe that the direction of cryptocurrency market regulation and stablecoin legislation will be crucial for the U.S. crypto industry.

Cryptocurrency "Smart Regulation" to Promote Clear Regulatory Framework

Pham stated that after Trump's victory, the United States will focus more on "smart regulation," which means the need to establish a "clear regulatory direction" rather than relying solely on enforcement actions to restrain industry players. Many companies are being investigated because they are unclear about the government's registration requirements.

Pham further mentioned that in the future, the CFTC will establish more specific registration standards to ensure consumer, industry, and market safety. She specifically pointed out that Trump's tariff policy may bring geopolitical risks, further driving demand for safe-haven assets like gold and Bitcoin, forming a debasement trade.

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CFTC's "Digital Assets Sandbox" to Pilot Market Innovation for Six Months

Pham revealed that the CFTC is about to launch a six-month "Digital Assets Sandbox" pilot program, allowing the market to meet regulatory standards during the innovation process. She stated that the pilot program includes regulations on registration, information transparency, financial resources, market behavior, and the CFTC will also test the "application of tokenized collateral in the derivatives market" in the program.

Pham emphasized that this is not only the responsibility of the CFTC as a single entity but also requires cooperation with the SEC. She suggested restarting the joint advisory committee between the two parties to discuss regulatory boundaries across markets, similar to the collaborative approach taken in handling securities futures in the past.

The Political Influence of Cryptocurrencies Should Not Be Underestimated, Bipartisan Support Expected for Stablecoin Legislation

Regarding stablecoin legislation, Dante Disparte, Chief Strategy Officer of USDC issuer Circle, stated that cryptocurrencies have exerted significant political influence in this election. There are approximately 52 million crypto voters in the U.S., who were previously overlooked but now hold considerable power.

Disparte further mentioned that after Trump's election, stablecoins and market structure bills are expected to advance with bipartisan support, aiding stability in crypto regulations. Disparte emphasized that passing the stablecoin bill would not only strengthen the dollar's position in the global stablecoin market but also further propel Circle's development, as Circle is preparing for an IPO.

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The U.S. Lags Behind Other Countries in Regulation, Trump Expected to Improve and Attract Crypto Talent Back

Disparte pointed out that the U.S. has long lagged behind other countries in cryptocurrency regulation, causing many American crypto startups and related activities to move to regions like Singapore and the EU.

Disparte stated that Circle has obtained a payment institution license in Singapore and become the first company to comply with the EU's MiCA regulations. He believes that if the U.S. can establish a clear crypto regulatory framework by 2025, it will attract more startups back, thereby solidifying the U.S.'s leadership position in the global crypto industry.

Disparte mentioned that previously, Trump promised to dismiss SEC Chairman Gary Gensler on his first day in office, and the market currently has high expectations for regulatory reform in the U.S., hoping that Trump will fulfill his promises and help the crypto industry develop steadily in the U.S.

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