We're not going back
I was recently asked what I think the chances are a future US administration decides to roll back all the pro-crypto legislation that the current administration is crafting.
My answer: very low.
When the Biden administration decided to launch its assault on the industry, crypto was an isolated atoll. DeFi and TradFi were two parallel financial systems with no bridges. So when the regulators cracked down, it was mostly crypto-native builders and investors who were impacted.
Today, the situation is very different. The convergence of DeFi and TradFi is happening. Fintech companies are integrating with DeFi protocols. Banks are launching their own stablecoins and earning yield on those stablecoins through DeFi protocols. Asset managers are tokenizing their funds and bringing them onchain.
If regulators wanted to unwind all that progress, it would no longer just be crypto native companies that would fight back. Revolut, Societe Generale, Apollo, Blackrock, ICE (parent company of NYSE), Nubank and many more would as well.
Crypto is also advantageous to the US geopolitically. Dollar-denominated stablecoins like USDC and USDT have let people everywhere hold and use a digital version of the dollar. The crypto industry globally is denominated in dollars. If the world’s digital value transfers are happening in USD stablecoins, the dollar’s dominance in global finance only strengthens. On top of that, stablecoin issuers park their reserves in U.S. government debt. Right now, that adds up to about $183 billion of U.S. Treasuries held by dollar-backed stablecoins, which would rank stablecoin issuers around 17th globally, ahead of countries like South Korea and Germany.
Finally, we’re seeing prediction markets like Polymarket creating entirely new financial markets around real world events. Just today Polymarket announced that it raised $2B from Intercontinental Exchange (ICE), which is the company that owns the NYSE. Prediction markets are however not just financial tools, they’re emerging as alternative information channels, offering people a new and often times more accurate way to understand the world. Polymarket famously projected a Trump win in the 2024 presidential election, when most established polls were still predicting Harris to win.
So when I look at the landscape today, I don’t see an industry that can just be rolled back. I see one that’s converging with the mainstream financial system, embedding itself into the fabric of the global economy, and, in many ways, strengthening U.S. influence.
We’re not going back.