“We will have regulations, but from now on, the rules will be written by people who love your industry, not hate your industry”
- Donald Trump (2024)
From dismissing cryptocurrencies as assets ‘based on thin air’ (in 2019) to championing their potential to ‘go to the moon’ (in 2024), Trump’s crypto U-turn created waves in the US election cycle. The crypto industry has been buzzing with optimism, hoping for relaxed US regulations after his win. Trump has promised a Crypto Advisory Council (to streamline crypto regulations and for inter-regulatory coordination) and is set to appoint a pro-crypto chairman to the SEC. He may also establish a federal bitcoin reserve. Heck, even Trump’s newly promised department of government efficiency is a wink to Dogecoin!
The US crypto market has responded favourably. Bitcoin has crossed the $100,000 mark. Many believe that this buzz will not just be limited to the US – it could influence other economies like India which remain undecided on their broader policy on crypto regulations. India today leads the world in adoption of cryptocurrencies. High taxes, regulatory uncertainty and incidents like the WazirX hack (which led to wipeout of Rs. 2000 crore) haven’t deterred Indian crypto investors. What’s transpiring in the US may be a shot in the arm for the Indian crypto growth spurt.
Trump’s promises are suggestive of a sea change in crypto policies which could seal crypto’s legitimization as a financial asset. For India, this could mean pressure to craft enabling regulations for the crypto space – and may be this won’t be such a bad thing. The regulatory oversight will enable the government and regulators to leverage the potential and manage the pitfalls of crypto businesses. The Financial Intelligence Unit (FIU-IND), Indian money laundering watchdog, has already covered a fair bit of ground despite being the only regulator for crypto-businesses at the moment. It has engaged with crypto businesses to understand their operations, monitored threats and penalized non-compliant players.
A comprehensive regulation with measures to prevent frauds, security breaches and other illegal activities could safeguard investors and fuel innovation in the crypto domain. This could help attract foreign investment and nurture homegrown crypto startups. It could also help elevate India’s position in the global crypto economy – so that it is not deprived of opportunities which the US’ wholehearted participation in the space may create. In any case, the future is looking up. So, fellow crypto enthusiasts, keep your fingers crossed and wallets ready.
(This post has been authored by the fintech team at Ikigai Law. It was originally published in December 2024 edition of our monthly fintech newsletter, FinTales.)
