The stunning win by the Republican Party led by former President Donald Trump will be closely examined in the coming days, particularly given the significant margin of victory. One key element may well be found to be crypto.
The numbers leading into the election and post election are interesting. Public Citizen reported in late August that crypto companies had donated 48% by value of all corporate donations in 2024.
Stand with Crypto (SwC) reported that over US$200M was donated up to the election. SwC also has published extensive ratings on how friendly towards crypto different politicians are, and while there was criticism after they rated Kamala Harris a "B" (later changed to N/A), their ratings have been lined up against the election winners to show a markedly more pro-crypto legislature with almost every state of the US electing a Congressperson or Senator deemed to be 'pro-crypto':
Next up, what has Donald Trump promised to do for the crypto industry? Below are his promises and time will tell whether he delivers, but in a one case the timeline for delivery is very close:
"on day one I will fire Gary Gensler and appoint a new SEC chair";
The USA will not sell any Bitcoin it holds (noting that President Biden or agencies may make the decision on any sales prior to Trump being inaugurated);
The USA will establish a Bitcoin strategic reserve;
He will support the right of Americans to self-custody their crypto; and
He will not permit a CBDC which would let government control citizen spending.
On the subject of crypto, the Republican Party's platform similarly promised:
Republicans will end Democrats' unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency. We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.
Whatever views you have on Trump as a person, his pro-innovation policy position towards crypto had an immediate price impact when it became clear he would win the election, and a crypto powered prediction market was calling the election well before mainstream sites (Australian betting sites also displayed odds that Trump would win well before the media called the election).
With election data indicating that the Republicans may also control both houses of Congress, the prospects of comprehensive crypto legislation also appear brighter. This follows the passage of the FIT21 bill in the House with significant bipartisan support in May this year.
What does this mean for the rest of the world? With one of the largest markets for crypto seemingly on the path to be open for business again, jurisdictions that have followed a regulation-by-enforcement path may quickly find that the SEC embarks on a swift course correction in line with the new administration's priorities. With the United States and SEC also having significant influence in intergovernmental bodies like IOSCO (the International Organisation of Securities Commissions), having previously driven its policy work on DeFi, we may see knock impacts in other jurisdictions as regulators seek regulatory alignment across jurisdictions.
While the Australian government has committed to implement crypto legislation to protect consumers, there is currently no timeline for release of exposure draft legislation or its review by Parliament. With a Federal election expected next year, it remains to be seen how the latest US developments will impact legislative and policy developments closer to home in the coming months.
By Michael Bacina and Steven Pettigrove
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