This Week in Web3: Crypto Policies and American Innovation

The U.S. marketplace will likely become more cryptocurrency-friendly with industry-backed lawmakers winning in Congress and the White House this election cycle.

Many crypto community experts have likened President-elect Donald Trump’s potential impact on digital assets to that of the internet boom under the President Bill Clinton administration, hoping that clearer and lighter regulations will give rise to innovation and broader adoption.

The crypto industry raised — and spent — hundreds of millions of dollars on the 2024 U.S. election cycle. Per the nonprofit industry group Stand With Crypto, the elections saw more than 250 “pro-crypto” members of Congress elected along with more than 15 “pro-crypto” senators.

While structural change at home could start with Trump’s promise to fire Securities and Exchange Commission Chair Gary Gensler (who cannot be fired without cause and will likely choose to resign in advance of the incoming administration) and appoint a more crypto-friendly regulator, a Trump presidency could have far-reaching ramifications for the entire global crypto market.

A more crypto-friendly U.S. could attract businesses and talent from jurisdictions with stricter regulations, such as the European Union, which has taken a more conservative approach. This may create competition as other countries reevaluate their regulatory stances to avoid losing ground to a crypto-forward United States.

It’s all happening against a backdrop where private sector innovation is positioning crypto as a more practical alternative to traditional payment methods.

Setting the Stage for American Crypto Innovation

Research published Tuesday (Nov. 5) by Wharton marketing experts indicated heightened interest among conservative Americans for crypto. This potentially suggests that Trump’s policies may resonate strongly with his base, driving confidence and possibly broader adoption of crypto.

“We find that as political conservatism increases, so does confidence in cryptocurrency,” the researchers wrote. “…Moreover, the more conservative they are, the more likely consumers were to indicate current cryptocurrency holdings.”

But it isn’t just conservatives turning to crypto. Big banks are, too.

J.P. Morgan announced an enhancement to its blockchain platform Wednesday (Nov. 6), rebranded from Onyx to Kinexys. The bank will integrate Kinexys Digital Payments with J.P. Morgan FX Services, enabling on-chain foreign exchange settlement. The move positions Kinexys as a key player in the landscape of digital cross-border payments and FX, according to the company.

As highlighted by PYMNTS Intelligence, blockchain technology, the technical infrastructure enabling crypto, has potential for use in regulated industries, such as finance and healthcare.

Crypto Payments: Expanding Access and Infrastructure

Trump’s pro-crypto stance could also impact the adoption of crypto payments, potentially paving the way for cryptocurrencies to become a more widely accepted payment option.

A consortium of FinTech and crypto companies including Robinhood, Kraken and Galaxy Digital introduced a joint stablecoin pegged to the U.S. dollar, Reuters reported Monday (Nov. 4). The aim of the newly formed Global Dollar Network is to accelerate the use of stablecoins worldwide and promote an asset that provides proportionate economic benefits to its partners.

Visa and Ingenico have already taken steps to incorporate crypto payments into mainstream financial networks.

Visa launched a money movement partnership last week with crypto exchange Coinbase. The collaboration connects Coinbase to the Visa Direct network, letting the exchange’s customers deposit funds into their accounts via eligible Visa debit cards.

Payments acceptance provider Ingenico launched a partnership Tuesday with Crypto.com. The new collaboration will bring crypto payments and merchant services to users of the Ingenico platform, letting merchants worldwide accept crypto payments.

Deregulation may reduce some hurdles businesses face when adopting crypto, potentially spurring more payment providers and merchants to join the ecosystem.

The PYMNTS Intelligence report “Paying With Cryptocurrency: What Consumers and Merchants Expect From Digital Currencies” found that 77% of merchants that accept crypto payments said they did so because of lower transaction processing fees relative to other payment methods. Meanwhile, 32% of merchants who were increasing their use of crypto said they were doing so because they thought it could help them attract new customers.