As Europe prepares to implement the Markets in Crypto-Assets Regulation (MiCA) on December 30, industry experts warn that Donald Trump’s pro-crypto stance may lure businesses away from the continent. With the promise to make the US the global “crypto capital,” Trump’s policies could overshadow the EU’s landmark regulation.
Trump’s Crypto Embrace
Trump’s renewed embrace of cryptocurrencies has sparked optimism across the digital asset industry. His pledge to end the stringent regulatory measures of recent years and appoint crypto advocates, such as Paul Atkins as head of the SEC, has spurred Bitcoin to a record high of $108,000 this year—double its price a year ago. Industry players, including Binance, are already signalling plans to refocus on the US market.
“We’re going to do something great with crypto,” Trump proclaimed, fuelling expectations of a friendlier US regulatory environment.
EU’s MiCA: Guardrails or Barriers?
The EU’s MiCA rules are designed to bring order to the crypto industry, focusing on regulating stablecoins and digital asset services like trading and custody. While initially seen as a potential global benchmark, MiCA’s stringent requirements now face criticism.
Yulia Makarova, special counsel at Cooley, highlighted the challenges for start-ups: “Ongoing compliance costs can bring businesses to the brink of viability.” Companies like Tether, the world’s largest stablecoin, will not meet MiCA standards and are being delisted by regulated exchanges.
Migration to the US Market
Trump’s presidency is expected to accelerate a shift of crypto businesses towards the US. Eswar Prasad, a senior fellow at the Brookings Institution, observed that MiCA’s strict framework may lose its appeal as the US promises a more lenient approach.
“The new administration might take some shine off MiCA,” noted Denzel Walters of market maker B2C2. Yet, Walters believes MiCA still offers a robust foundation for Europe’s digital asset market.
Future of Global Crypto Regulation
Industry executives anticipate that Trump’s administration will push for new crypto legislation, unlocking opportunities for traditional financial institutions to invest in the sector. Companies that had abandoned US operations due to regulatory crackdowns are now plotting their return.
Norman Reed, interim CEO of Binance US, confirmed plans to restore US dollar services by early 2025. “It is not a matter of if, but when,” he stated.
While MiCA aims to set high standards for crypto regulation, the allure of a crypto-friendly US under Trump may outshine Europe’s efforts. The tug-of-war between these regulatory approaches will likely shape the global crypto landscape in the years to come.
