Transforming the Digital Asset Landscape
How the Trump administration’s policy shift is defining a new era of digital asset regulation in the U.S.
Jan 28, 2025The return of the Trump administration marks a pivotal moment for the digital asset industry. With a pro-crypto executive branch, supportive congressional leadership, and a clear commitment to regulatory clarity, the United States is poised to lead the next phase of digital asset innovation. In the weeks following the presidential election, the market capitalization of digital assets surged to a new all-time high of $3.9T[1], reflecting heightened investor confidence in the U.S. as a global leader for digital asset innovation.
During his campaign, President Trump vowed to make America the "crypto capital of the planet," promising to promote innovation while safeguarding investors. These goals reflect a broader commitment to integrating digital assets into the nation’s economic framework. By fostering a transparent and supportive regulatory environment, the administration aims to attract investment and encourage technological development within the digital asset ecosystem.
In his first week back in office, President Trump made it clear we can expect a significant shift in U.S. policy towards digital assets.
Executive Order: “Strengthening American Leadership in Digital Financial Technology”
On January 23, President Trump issued an executive order reaffirming the United States’ commitment to digital financial technology leadership and regulatory clarity. The order established the Presidential Working Group on Digital Asset Markets to craft a comprehensive federal framework for digital assets, including stablecoins, and to assess the feasibility of a strategic national digital asset reserve. The administration also took immediate action to prohibit the development or issuance of a central bank digital currency (CBDC), signaling a policy stance that prioritizes private-sector innovation over government-controlled digital money.
The Presidential Working Group is chaired by the “White House AI & Crypto Czar,” a newly established position. The administration appointed David Sacks, a former PayPal COO and prominent venture investor, to this role. Tasked with bridging the gap between the tech industry and federal policymakers, Sacks is expected to craft a regulatory framework that balances innovation with oversight. His focus on "light-touch" regulation aims to preserve the United States’ competitive edge in both cryptocurrency and artificial intelligence sectors.
The New SEC
One of the most consequential changes under the new administration has been a leadership transition at the Securities and Exchange Commission (SEC). Gary Gensler resigned as SEC Chair on January 20, 2025, aligning with President Trump's inauguration. Gensler’s tenure was characterized by a contentious "regulation by enforcement" approach, which many industry participants criticized for stifling innovation. His likely successor, Trump-nominee Paul Atkins, represents a stark contrast. A former SEC Commissioner and co-chair of the Token Alliance, Atkins is a well-known advocate for clear and balanced digital asset regulations. His leadership is expected to prioritize collaboration with industry stakeholders and a shift towards rulemaking over enforcement.
While Atkins awaits Senate confirmation, Mark Uyeda has been designated Acting Chair of the SEC. Like Atkins, Uyeda is known for his flexible and supportive approach toward digital assets. As one of his first actions, Uyeda formed a crypto task force, led by Commissioner Hester Peirce (“Crypto Mom”), to establish a clear, innovation-friendly regulatory framework for digital assets, marking a major shift away from the previous administration’s enforcement-heavy approach.
Under its new leadership, the SEC issued Staff Accounting Bulletin (SAB) No. 122, rescinding SAB 121, a controversial rule that had required financial institutions to account for customers' digital asset holdings as liabilities. Critics, among them Peirce, had long argued that SAB 121 stifled institutional crypto adoption by discouraging banks from offering custody services.
Key Agencies
In addition to the SEC, other key financial agencies are poised to drive pro-crypto regulatory change.
Caroline Pham, newly appointed Acting Chair of the Commodity Futures Trading Commission (CFTC), has positioned the agency as a key player in crypto derivatives and digital asset market structure reforms. Under her leadership, the CFTC has launched public roundtables and industry consultations to promote greater transparency and regulatory clarity, signaling a shift from enforcement-driven tactics to collaborative policymaking. Her approach contrasts with the prior administration’s regulation-by-enforcement strategy, aiming to create a more predictable and innovation-friendly regulatory framework for digital assets.
Similarly, Travis Hill, Acting Chairman of the Federal Deposit Insurance Corporation (FDIC), has prioritized greater transparency in bank-fintech partnerships and a measured approach to emerging financial technologies. Hill has emphasized the need for clear, risk-based regulatory guidance to ensure law-abiding businesses have fair access to banking services. He has also called for a regulatory review to balance financial stability with economic growth and technological innovation.
These agencies reflect a broader federal shift toward regulatory modernization, supporting clearer frameworks for digital assets while ensuring market stability and competitiveness in the evolving global financial landscape.
Legislative Support for Digital Assets
The 119th Congress, which began its session in January 2025, is widely regarded as the most crypto-friendly in U.S. history. With Republican majorities in both the House and Senate, digital asset legislation appears more achievable than ever. Key figures such as Representative French Hill, the incoming Chair of the House Financial Services Committee, and Senator Tim Scott, the new head of the Senate Banking Committee, are poised to champion pro-crypto policies.
French Hill’s leadership ensures continuity in advancing cryptocurrency-related initiatives. As the former head of the Subcommittee on Digital Assets, Hill has demonstrated a deep understanding of the industry’s regulatory needs. Similarly, Tim Scott’s ascendancy marks a turning point for the Senate Banking Committee, which has historically been dominated by crypto skeptics. Scott’s alignment with influential advocates like Senator Cynthia Lummis is expected to drive forward key legislative priorities, including stablecoin regulation and market structure reforms.
Challenges in the Path to Reform
Despite the favorable political climate, the path to comprehensive digital asset regulation faces challenges. The legislative process is inherently slow, often requiring months or even years to translate proposals into law. Competing priorities such as foreign policy, immigration, and tax reform could further delay the introduction of crypto-specific legislation. Additionally, entrenched critics of digital assets, including Senator Elizabeth Warren, continue to wield significant influence, potentially complicating bipartisan efforts.
Transforming the Relationship Between Digital Assets and Traditional Finance
The anticipated regulatory clarity is expected to bridge the gap between the digital asset industry and traditional finance (TradFi). Historically, legal uncertainties have deterred many TradFi institutions from engaging with digital assets. Yet the growth of digital assets under the new administration is encouraging greater participation and support from top financial institutions, with the promise of clear rules pointing to growing acceptance of digital assets as a legitimate asset class. On the heels of bitcoin’s surge, BlackRock released a report recommending a 2% allocation to bitcoin for multi-asset portfolios. At the World Economic Forum in Davos, where digital assets reportedly dominated conversations, BlackRock CEO Larry Fink suggested that bitcoin price could reach $700,000. Also in Davos, Brian Moynihan, Bank of America CEO, said in an interview, “If the rules come in and make it a real thing that you can actually do business with, you’ll find that the banking system will come in hard on the transactional side of it.”
Enhanced regulatory stability is likely to spur further innovation and diversification within the market. Exchanges and trading platforms like Coinbase and Robinhood have begun expanding their offerings to include more altcoins and auxiliary services such as staking and rewards. These initiatives reflect a broader trend of ecosystem growth, which is expected to accelerate as confidence in regulatory oversight continues to strengthen. Additionally, the resolution of enforcement actions and litigation against major industry players could remove significant barriers to expansion and investment.
The Global Implications of U.S. Leadership
The United States’ approach to digital asset regulation has significant implications for the global ecosystem. By establishing a balanced framework that safeguards investors while fostering innovation, the U.S. can set a global standard, attracting international investment and solidifying its position as a hub for cryptocurrency development. A transparent and predictable regulatory environment would enhance the industry’s resilience, reduce systemic risks, and promote long-term stability. Ultimately, U.S. leadership in defining an innovation-friendly framework could influence global standards, encouraging broader institutional adoption and legitimizing digital assets as a core component of modern financial markets.
[1] Global cryptocurrency market capitalization reached \$3.9T on December 16, 2024, and was at \$3.6T as of the publishing of this article. Source: CoinGecko as of January 28, 2025.
Investing in digital assets and blockchain involves risks, including volatility and potential loss of capital; any projections mentioned are not guarantees of future performance.
