Crypto's Win with Trump: Time for Smart Rules

Cryptocurrencies hit the jackpot when Donald Trump won the election, and the crypto bigwigs who supported him got favorable mentions and promises of a new U. S. digital currency reserve. Prices boomed. Just two weeks after the election, Trump's social media company reportedly considered buying a crypto venue led by a former U. S. Senator and Trump's inaugural committee co-chair. Some people might think this is a bad combination, given Trump's past and the crypto world's reputation for scams. But let's look on the bright side. This could be a chance for sensible crypto regulation. Cryptocurrencies are digital files used like money, traded globally. They need rules to protect investors, many of whom are young and new to trading. The new administration and a GOP-controlled Congress could finally pass laws to fill the gaps in crypto regulations. Big U. S. financial institutions could then step in, bringing discipline and professionalism to the market. Chicago, a leader in futures and options markets, could take the lead.

Under President Joe Biden, none of this would have happened. Gary Gensler, the outgoing SEC chair, was too harsh on crypto. He missed the FTX exchange scandal and was criticized by a federal judge for acting in bad faith in a crypto case. Gensler thinks crypto is only used for scams and money laundering. But it could have legal uses if given a chance to develop. Trump promised to fire Gensler, and he announced his resignation on Trump's inauguration date. The CFTC chair, Rostin Behnam, has had some successes but is waiting for Congress to clarify crypto rules. The EU is already ahead in crypto legislation, which could guide the U. S. The best approach is not to rush with harsh rules like the SEC did. Young investors, some even teenagers, are trading crypto on their phones. Strong rules are needed to protect them and the market. It will take time to create the right framework, but it's crucial to start now.

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