The Trump era is coming, looking forward to the three key cryptocurrency bills in the United States

Here is the English translation of the text, with the specified terms retained and not translated: Trump has not yet officially taken office at the White House, but the cryptocurrency market has already celebrated in advance, realizing the policy news. This morning, as Trump officially nominated Paul Atkins as the SEC chairman, Bitcoin broke through $100,000. Since Trump's election victory, Bitcoin has risen from $68,000 on November 5 to $100,000, achieving a 47% return in just one month. The author of this article will analyze in depth how policy changes shape the market landscape and the potential development directions under the new landscape from the perspective of US cryptocurrency policy. ### "Tough and Brutal" Crypto Regulation Turns to More Open and Friendly During his campaign, Trump had made 10 crypto-friendly commitments, including establishing a strategic Bitcoin reserve. The nominated SEC chairman, Paul Atkins, is also known for his friendly attitude towards cryptocurrencies, advocating for reduced regulation to support market innovation. Trump mentioned today that Paul "understands that crypto assets and other innovations are crucial to making America greater than ever before and believes in the commitment to strong, innovative capital markets." Paul has also criticized the SEC's hefty fines for harming shareholder interests, advocating for a flexible regulatory strategy, and serving as co-chair of the Token Alliance. Trump's move to use Paul Atkins' previous experience in promoting the crypto industry to change the SEC's previous year-long focus on punitive measures towards the crypto industry, bringing the "financial freedom" philosophy into the US financial regulatory agency. In addition, other members of Trump's team also provided strong support for the regulation of crypto finance: over 60% of the nominated cabinet members have publicly stated that they own Bitcoin or support the development of crypto finance, or indirectly support the growth of crypto assets. Apart from Trump's commitments in the crypto market and the previously proposed "Financial Innovation and Technology Act of the 21st Century" (FIT 21 Act), the recent Tornado Cash incident also marks the development of US crypto regulation towards a more open and friendly direction. At the end of November, the US Fifth Circuit Court of Appeals ruled that the Treasury Department's sanctions on the Tornado Cash immutable smart contract were illegal, arguing that these smart contracts do not meet the legal definition of "property." This ruling provides important support for the legality of smart contracts, allowing developers and users to use these protocols without facing direct conflicts with the traditional legal framework, thereby promoting finance towards a more inclusive and friendly direction, and directly benefiting the flourishing of decentralized finance (DeFi). ### "America First" Requires More Freedom for Industrial and Financial Capital Financial freedom not only opens up more development space for the crypto market, but also foreshadows a profound market integration as crypto assets and traditional financial assets (TradFi) become interconnected. With the development of the digital society, driven by future technologies such as artificial intelligence (AI), the way of value creation is accelerating its transformation. Former Alibaba chief strategy officer Zeng Ming pointed out that general artificial intelligence (AGI) will become the core technological breakthrough of productivity in the future, and will closely integrate with crypto assets to spawn a large number of new digital assets. Blockchain, as the value network technology that connects the digital society and the real society, will play a key role in the transformation of crypto assets. Under the "America First" policy, Trump has proposed an AI version of the "Manhattan Project," aiming to elevate AI technology to the level of national strategy and vigorously promote industrialization. In addition to the future digital society driven by AI that cannot bypass crypto assets, Standard Chartered Bank has also stated that almost any real-world asset can be tokenized, and it is expected that by 2034, the global demand for tokenized assets will reach $30 trillion. Whether it is the future development of the digital society that requires crypto assets, or the circulation of assets in the real world that requires tokenization, the integration of crypto assets and traditional financial assets will have far greater potential than the "Great Merger Era" of the 1930s and the "Internet Merger Era" of the 2000s, the former of which catalyzed $600 billion in industry integration, and the latter drove the market to a scale of $3 trillion. The integration process is now unstoppable. Whether it is the promotion of crypto asset ETFs or the emerging track represented by RWA (real-world assets), the stablecoin application alone has created a market capitalization of over $200 billion. With the continuous penetration of crypto technology, the "cryptization" (Crypto) process of the entire financial market has already begun, which will reshape the global financial landscape and spawn a more open and integrated capital ecosystem. ### How the 3 Key "Promises" of Crypto Will Affect the Future Market Whether it is the announcement of establishing a strategic Bitcoin reserve or the nomination of a crypto-friendly SEC chairman, Trump's election seems to usher in the most friendly regulatory environment in the history of the crypto industry, thus opening up the recent upward channel for Bitcoin. However, from a medium to long-term perspective, the real driving force behind the continuous advancement of the crypto industry is obviously not the price of Bitcoin, but whether Trump can fulfill those verbal crypto commitments and provide more space for the crypto market at the legislative level. If Trump, with his extremely high party prestige and the Republican Party's complete victory in the Senate and House elections, actively promotes the key legislation represented by the following 3 bills, it may bring a completely new situation to the crypto industry. ### The FIT 21 Act Will Be Prioritized, Driving DeFi Innovation to "Return" to the US The FIT 21 Act is likely to be the first bill that Trump will prioritize after taking office. This bill, hailed as "the most important" crypto bill to date, not only clearly defines when cryptocurrencies are commodities or securities, but will also end the "tug-of-war" between the SEC and CFTC in crypto regulation. The US House of Representatives previously passed the bill by an overwhelming majority and submitted it to the Senate, but the latter did not take decisive action. However, with Trump taking office, the market generally expects the progress of this bill to be accelerated. After the FIT 21 Act is passed, more compliant trading platforms and crypto-listed companies will emerge, and the clear attribute standards will also enrich the tradable tokens, and provide new opportunities for spot ETFs and other crypto financial products. One of the reasons why the application for an Ethereum ETF was difficult to pass previously was the ambiguous definition, and the SEC considered Ethereum more like a security after the conversion to the PoS mechanism. It was not until the SEC and Wall Street found a "balance point," that is, clarifying that Ethereum ETFs without staking are not securities, that the promotion could continue. After the passage of the bill, for cryptocurrencies that are clearly classified as "digital commodities," spot ETFs and related financial products will be easier to launch on the basis of meeting the relevant prerequisites. We may see more types of crypto spot ETFs such as SOL, XRP, HBAR, and LTC next year. The FIT 21 Act will also drive the development of decentralized application innovation, especially the DeFi track. The FIT 21 Act clearly stipulates that if related tokens are judged to be decentralized and functional, they will be regarded as digital commodities and not subject to SEC regulation, and as long as the degree of centralization meets the requirements, they can obtain a certain exemption period, which will encourage more DeFi projects to evolve towards a more decentralized direction. The bill also requires the SEC and CFTC to study the development of DeFi, assess its impact on the traditional financial market and potential regulatory strategies, and the exemption period factor will attract more DeFi projects to "return."

Here is the English translation: In addition, driven by friendly policies and expectations of rate cuts, more traditional capital will flow into DeFi to seek higher returns, which will in turn stimulate further innovation in DeFi. A clear trend is that DeFi will continue to expand its collateral assets, bringing more off-chain liquidity onto the chain. This will drive the deep integration of DeFi and RWA, by allowing tokenized assets such as US Treasuries and real estate to be used as collateral or for lending, enriching the composability and imagination of on-chain finance, and allowing the influence of DeFi to spread off-chain. The RWA track will also accelerate its two-way expansion from off-chain to on-chain, due to the more attractive returns brought by its integration with DeFi. The value of DeFi in the Bitcoin ecosystem should not be overlooked. While leveraging ETFs to penetrate the off-chain market, Bitcoin is also showing more possibilities in its on-chain ecosystem. Considering that the Bitcoin market is dominated by long-term holders, and the spot ETF keeps the market liquidity at a lower level, this may create new opportunities in the Bitcoin lending track. Given the probability that the SEC will allow Ethereum spot ETFs to be used as collateral, DeFi projects focused on staking may receive widespread attention.

US Stablecoin-Related Bills Back on the Agenda

In 2023, the US House Financial Services Committee passed the Stablecoin Transparency Act, but it was not approved by the House. In October this year, US crypto-friendly Senator Bill Hagerty resubmitted a similar bill, along with Trump's previous promise not to push for a CBDC issued by the Federal Reserve, as well as the FIT 21 Act defining permissioned payment stablecoins and emphasizing the importance of the licensing system, stablecoin-related legislation may be back on the agenda after Trump takes office. Stablecoin legislation will directly impact the issuance of US dollar stablecoins and related payment institutions. Some smaller or algorithmic stablecoins may be forced to exit the market, while compliant stablecoins (such as USDC) will occupy a larger market share. At the same time, as legislation clarifies compliance requirements, traditional payment service providers will accelerate the adoption of compliant stablecoins, improving their availability and usability in daily transactions, and related enterprises and users will be more willing to accept stablecoins as a supplement to the existing payment system, rather than just for cryptocurrency trading use cases. The market share of stablecoins in cross-border remittances and settlements will also continue to increase, with user volume and settlement scale expected to approach or even surpass institutions like Visa. Furthermore, whether through direct returns from underlying assets (such as government bonds, money market funds, etc.) or by leveraging DeFi protocols to generate on-chain returns, various yield products based on compliant stablecoins will continue to emerge and be welcomed by users, but care should be taken to avoid giving stablecoins the characteristics of investment contracts when designing the yield mechanism.

Repealing SAB 121 Proposal Likely to Restart, Solving the Crypto Custody Dilemma

Whether it is the development of crypto financial products such as spot ETFs, or the growth of RWA, stablecoins and DeFi, the demand for crypto custody services will be boosted. This will force the restart of the repeal of the SAB 121 (Staff Accounting Bulletin No. 121) proposal. SAB 121 was issued by the SEC in 2022, requiring companies to record custodied crypto assets as liabilities, which significantly increased their debt-to-asset ratios, affecting financial health and credit ratings, and making related companies reluctant to provide custody services. Trump had promised to repeal this bulletin if elected. The direct benefit of repealing SAB 121 is to reduce the compliance burden of crypto custody institutions, allowing banks and other regulated entities to more easily enter the crypto custody field, thereby attracting more institutional investors to the market. Due to the accounting treatment requirements of SAB 121, many banks and financial institutions have been relatively cautious about crypto financial products such as spot ETFs, and the repeal will reduce the complexity for financial institutions to manage these crypto assets. Stablecoin providers and payment-related businesses have also been affected, especially those integrated with the traditional financial system. Repealing SAB 121 may create a more relaxed regulatory environment for these companies, helping them develop core functions such as payments and settlements. The currently popular RWA will also benefit, allowing more traditional custodians to manage tokenized assets more flexibly, thereby attracting more financial institutions to participate. Undeniably, every crypto-friendly policy in the Trump 2.0 era is profoundly reshaping the boundaries of the crypto market. From regulation to accounting standards, each seemingly minor change hides far-reaching strategic significance. The nomination of Paul Atkins signals a more relaxed crypto regulatory environment, and institutional reforms at the asset level are equally noteworthy. The FASB's new rule (ASU 2023-08) to be effective on December 15, 2024 requires companies to record the fair value of their held crypto assets on their financial statements. This means that changes in the value of companies' holdings of cryptocurrencies like Bitcoin will be directly reflected in their financial statements, significantly impacting their net income. The implementation of this rule will be able to motivate more companies to include mainstream cryptocurrencies like Bitcoin on their balance sheets. Furthermore, Microsoft held a board meeting on December 10th to formally discuss whether to incorporate Bitcoin into its corporate strategic reserves, providing a high-profile industry signal for this trend. As Bitcoin breaks through $100,000 today, OKX CEO Star stated on the X platform that this is the "power of vision and technology". The path of integration between tradition and innovation will undoubtedly reshape the new order of the global capital market.