Pro-Crypto Congress and President-Elect Poised to Transform U.S. Crypto Landscape in 2024

The 2024 elections are set to change the crypto industry significantly. With 287 members of Congress supporting pro-crypto initiatives and a president-elect who wants the U.S. to be the “crypto capital of the planet,” we’re looking at a time of accelerated mainstream adoption.

As people in the market analyze what this means, one thing stands out: moving from a model of “regulation by enforcement” to a clearer, more predictable regulatory framework will be key. This shift will help reduce risks and open doors to new markets, products, and applications. Let’s look at a few areas that could thrive in this new environment:

Decentralized Finance (DeFi): DeFi is one of the most exciting innovations in crypto. It uses “smart contracts” to cut out intermediaries, giving everyone access to trading, borrowing, lending, and more. Regulators have often insisted that intermediaries are necessary, which limits DeFi’s potential. A friendlier regulatory landscape could change that, allowing token holders to legally share in protocol revenues—a long-sought goal for many.

Artificial Intelligence (AI): AI is advancing rapidly. The arrival of AI “agents” has come sooner than many expected. Integrating crypto with AI—characterized by openness and transparency—could lead to responsible innovations in both fields.

Fixed Income Markets: Interest rates are crucial in traditional finance. Emerging fixed income markets are likely to grow as financial institutions face fewer regulatory obstacles in entering global crypto markets. Key benchmarks, like the composite ether staking rate (CESR) and perpetual swap funding rates, will bring the functionality of the $500 trillion interest rate swap market into the crypto world, attracting hedgers and speculators alike.

Utility Tokens: In the past, the SEC’s enforcement approach targeted tokens that showed utility. This led to the rise of memecoins—tokens without any real utility. A more favorable regulatory environment could shift the focus back to utility tokens, which could drive further mainstream adoption.

Decentralized Physical Infrastructure Networks (DePIN): DePIN encourages community participation through tokens, allowing for the creation of large, decentralized physical networks. These networks are emerging in sectors like telecommunications, mapping, computing, and geolocation. They often provide more scalable and cost-effective solutions than centralized options.

The combination of a pro-crypto Congress and a supportive regulatory environment is expected to usher in a transformative era for the crypto industry. A regulatory framework that promotes innovation will instill confidence in institutional investors. Entrepreneurs will be free from fears of regulatory backlash, allowing them to focus on building and innovating. The future looks bright!