Having commenced sharply with a range of policies, President Donald Trump’s second term has simultaneously changed the traditional financial sector alongside the emerging cryptocurrency industry. Within just three months, his administration began deregulating while simultaneously advancing incentives within the organization’s digital assets frameworks, which may profoundly alter the financial ecosystem.
President Trump, as many may have heard, has decided to go on an incredibly aggressive spin towards deregulation. Among the very first actions of Trump’s presidency was the CFPB announcing its intention to repeal a 2024 rule that licensed ‘buy now, pay later’ (BNPL) products as credit cards. Although this decision does classify as a type of innovation by reducing the regulatory shackles placed on fintech innovators, the broader implications are very concerning. The innovation propels adoption of consumer fintech tools, but critics warn about the regression of consumer protection.
Effective March 2022, thanks to an executive order, the federal paper-based financial infrastructure was streamlined with the introduction of electronic Treasury payments. Beginning in 2025, the order also aims to eliminate paper-based money-enabled transactions undertaken by Treasury Direct Accounts, which shifts the focus from efficiency improvement to security enhancement.
A Crypto-Friendly Stance: Embracing Digital Assets
Undoubtedly, the most profound evolution that Trump practices is adoption of the cryptocurrency industry.
After initial doubt, now vertical policy shift is in focus: fostering a more permissive stance toward digital assets. The National Cryptocurrency Enforcement Team (NCET), previously set up by his administration, has also been scrapped as part of the more permissive approach.
More recently, other stablecoin projects have also been embraced by the government, with connections to Trump unveiling a crypto backed by US Treasuries and deposits, USD1.
Legislative and Executive Actions: Recent Moves in the Crypto Domain
In the most recent attempts at crypto regulation, the Securities and Exchange Commission (SEC) also demonstrated a softer stance by voluntarily dismissing the lawsuit against Coinbase, one of the largest crypto exchanges. This significant regulatory milestone likely aims to reduce the legal environment’s unpredictability and facilitate greater operational freedom for crypto exchanges.
In further affirmation of the pro-crypto narrative of the administration, Trump Media & Technology Group has partnered with Crypto.com to offer a series of exchange-traded funds entitled “Made in America” using Crypto.com’s technology and assets such as Bitcoin and Cronos, which will serve to enhance the availability of digital asset investments.
A Meme Coin Launch: Immediately Following The Inauguration
In a hit to the narrative, days prior to the inauguration, Trump released his own meme coin, $Trump. The spike and drop in the coin’s value captured the public’s eye, considering the unpredictability of the crypto market and the possible interest clashes and concerns.
Shouldn’t the government aim to create a Digital Asset Stockpile?
The government’s digital asset strategy has also garnered a great deal of attention. The proposal seeks to set up a central reserve at the government level, but its feasibility and design, including issues related to its safety and market interaction, have been critiqued.
Fintech Cap: The Link Between Cash and Digital Currencies
During Trump’s second term, there was renewed focus on integrating fintech with conventional financial systems. The trend, which includes the deregulation of cash-in banking and the shift away from paper payments, seeks to improve market dynamics by increasing innovation and competition.
Settlement: The Dawn of Renewed Finance and Crypto?
In a matter of three months, the changes introduced under Trump’s term seemed likely to transform the financial and crypto worlds altogether. Although emerging market players seem encouraged by these shifts, there are equally important questions around the balance between risk, regulation, and consumer safety. Financial institutions will have to deal with a transformed landscape volatile with opportunities and dangers once the documents are put into effect.
