Trump's Inauguration Nears, But Crypto Regulatory Changes May Take Time, Says NYDIG

As Donald Trump’s inauguration as the 47th president of the United States draws near, hopes for a swift overhaul of crypto regulations are rising. However, the New York Digital Investment Group (NYDIG) has cautioned that significant changes to crypto policies may not materialize immediately.

In a research note published on January 10, NYDIG’s global head of research, Greg Cipolaro, advised against expecting immediate regulatory shifts despite Trump’s strong campaign promises regarding digital assets. While Trump is set to take office on January 20, Cipolaro highlighted that many of the president-elect’s initiatives, including those related to cryptocurrency, could take time to implement.

“While many changes could happen quickly, some may take longer to materialize,” Cipolaro wrote. “Key officials still need to be appointed, and those already named must undergo the confirmation process. Once confirmed, they will need time to assemble their teams and set priorities.”

NYDIG’s caution stems from the complexities of the legislative process. Among the key areas of focus are proposed regulations for stablecoins and the clarification of the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in overseeing the crypto industry. However, Cipolaro warned that the passage of such bills could be delayed, especially with a newly reinvigorated conservative legislature that might prove more resistant to compromise than its liberal predecessors.

“Execution of these initiatives may also be influenced by more pressing issues, such as geopolitical conflicts, the budget and debt ceiling, global trade, tariffs, and immigration,” Cipolaro noted.

Despite these challenges, Cipolaro expressed optimism about the potential for a crypto-friendly administration under Trump. He pointed out that several of Trump’s key appointments related to the financial sector have been viewed favorably by the crypto community, including those for the Treasury Department, the SEC, and the White House digital assets advisory role.

However, crucial positions at the CFTC, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) remain unfilled. These agencies play an important role in shaping the regulatory landscape for digital assets, and their future leadership could have a significant impact on crypto policy.

“Not all of Trump’s picks have been revealed yet, but from what we know so far about the agencies that are relevant to crypto, we like what we see,” Cipolaro said.

One potential development that could be implemented quickly is the establishment of a U.S. strategic Bitcoin reserve. Cipolaro speculated that this could be done through an executive order, which he noted could be issued with relative speed. A draft proposal for such an order has reportedly already been circulated by a Bitcoin advocacy group on social media.

A strategic Bitcoin reserve could be drawn from the $18.3 billion worth of Bitcoin seized by the U.S. government. Cipolaro explained that this would help alleviate concerns about the government acting as a potential seller of Bitcoin on the market, though it wouldn’t create new demand for the asset.

“While this would reduce concerns about government Bitcoin sales, it wouldn’t generate incremental demand,” Cipolaro said.

As Trump’s administration prepares to take office, the crypto industry is watching closely for any signs of regulatory changes. However, the NYDIG research note serves as a reminder that while Trump’s crypto-friendly promises are encouraging, the path to meaningful legislative action could take longer than expected.