Since his inauguration two months ago, Donald Trump's administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations.
Key Regulatory Changes in Cryptocurrency
For example, in the burgeoning cryptocurrency business environment, exchanges must navigate state and federal regulatory requirements. Certain states are friendlier than others.
In addition to anti-money laundering and know your customer requirements, cryptocurrency exchanges must satisfy FinCEN registration. They must also obtain money transmitter licenses.
Executive Orders and Policy Shifts
President Trump has already signed a number of Executive Orders and related documents that are going to impact cryptocurrency positively. There are going to be important policy and regulatory changes in the financial services and banking industries. Many major corporations, with the administration's eyes on them, appear to have already begun accommodating changes directed by the government. Management of smaller businesses are in a different situation, and should look to counsel and other experienced professionals for alerts and guidance with regard to dealing with those changes that will affect their businesses.
Anticipated Changes in Banking Policies
We anticipate administration-directed changes to policy and implementation under Trump's administration. These include head-turning announcements regarding tariffs and reversals of numerous existing policies. DEI and other policy reversals featured in the campaign rhetoric have already occurred.
Trump is highlighting his administration's tech-forward stance. He's promoting changes and innovation throughout the financial services industry. Already announced is the plan for a federal payments/fintech charter. There's also a new, friendlier federal regulatory framework governing the issuance and operation of digital assets.
We are seeing an increase in applications and offerings regarding cryptocurrencies and cryptocurrency exchanges. Greater access is becoming available to the general public, encouraging cryptocurrency use for everyday transactions.
Over the near term, we expect more policy shifts and regulatory updates. New enforcement priorities will, in most instances, lessen regulations and oversight. These changes relate to cryptocurrency, M&A, public reporting requirements, stock sales, and bank examination. They also impact bank capital and liquidity requirements, risk management frameworks, and relief options for financial industry misbehavior.
Consumer Confidence and Market Reactions
While it is too soon to tell what changes being proposed will pass muster, because certain changes and proposals may require legislative approval by a cooperative Congress, it appears that most of what the Administration chooses to put forward will be put into place. Corporate and investor wariness is evident. Consumer confidence is down despite the country's strong fiscal situation. This will be affected by how the government acts in the near future with regard to tariffs, further tax cuts, inflation, and how the volatile stock market reacts.
Future Projections and Business Decisions
Business leaders have to make important decisions while matters are in flux. The Administration has yet to see the public and industry responses after the changes are fully digested. At that time, its policymaking priorities will be better understood. That may bring things back to a less dizzying pace, with greater public understanding and acceptance of the status of current regulations/initiatives, which ones are most likely to be rolled back, and what is expected from new agency leadership and rulemaking going forward.
Legal and Market Challenges Ahead
We have yet to see the effects of most of the new key policies proposed by the Trump administration. Some of these may be rejected by the courts or, more importantly, by the public and the markets. But the initiatives the Administration is taking with regard to cryptocurrency have re-heated the volatile bull market in cryptocurrency. While the new Administration has made a point of reversing many of the initiatives and regulations advanced under Biden administration, many of these changes are already being contested in the courts, with mixed results.
Navigating Public and Business Reactions
We expect that the Administration and the Congress will move forward with cryptocurrency initiatives. They will seek to mollify public agitation over the cuts to job positions. They will also address proposals to reduce or eliminate mandated government spending. Where the public and the business community are on the same page, one can anticipate a less agenda-focused Administration. Congress will also likely become more responsive to voter and business concerns.
Conclusion: Embracing Change in Financial Services
Despite concerns raised by some, we have not seen roadblocks to the cryptocurrency proposals. These proposals would not interrupt progress the Administration seeks to effect. The Administration continues navigating through this roiling sea of drastic changes in economic policy and international relations.
Business owners and managers should consult with counsel with expertise in governmental affairs. They should also seek best practice accommodations to rule changes altering views, local and worldwide.
The Government's proposed support for cryptocurrency usage, for example, is a dynamic change. It is sure to put a charge into the growth of what has become an industry of its own.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
