Opinion by: Mateusz Kara, co-founder and CEO of Ari10
President Donald Trump’s return to office has signaled a new era for crypto in the US, but the country has much to do to catch up with Europe.
Trump has outlined grand plans and made sweeping promises to transform the US into a crypto haven. At this year’s World Economic Forum in Davos, Trump pledged to make the US the “world capital” of crypto, with a wave of pro-crypto policies, investments and regulatory clarity set to follow.
Crypto is becoming an increasingly strategically important industry and is expected to grow to $38.6 billion by 2030. A fight to attract crypto market share is on the horizon, and while Trump shores up the US regulatory arsenal to compete, the EU has quietly been implementing its own regulatory framework: Markets in Crypto-Assets Regulation (MiCA).
Equipped with MiCA, the EU benefits from a significant head start and is set to lead the industry in the long term, losing a few battles to Trump’s spotlight — but ultimately winning the war.
Trump’s cult of personality must be backed by policy action
Trump’s cult of personality, developed through grand gestures and big, often vague promises, has given the US a spotlight as a crypto leader. His star power is drawing attention and hype from leading crypto entrepreneurs. Yet, there are doubts about whether Trump will successfully turn his pro-crypto rhetoric into action.
Early indications are that key legislation to encourage innovation and the growth of the US crypto industry is underway. What’s lacking right now is a holistic framework that would provide clarity for businesses across the blockchain space.
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Trump has made several pro-crypto appointments to high-profile roles, starting with naming Paul Atkins as Securities and Exchange Commission chair and appointing Commissioner Hester Peirce to lead the newly created SEC task force in establishing precise crypto regulation. Just days into his presidency, on Jan. 23, Trump signed an executive order to create a “national digital asset stockpile,” and the wheels are in motion for a regulatory framework for stablecoins.
While Trump is signaling that crypto is a priority in his administration, more needs to be done than the patchwork of existing rules and the signing of executive orders. A holistic regulatory approach will be necessary to compete with the EU.
MiCA creates a solid regulatory foundation
Given the growing importance of the crypto industry, the EU has not been napping on crypto policy. It has developed a comprehensive regulatory framework, MiCA, which came into full force on Dec. 30, 2024.
Beyond the narrow policies and regulations currently being explored by the Trump administration, MiCA is comprehensive and covers all crypto assets, including those previously not covered by traditional financial services legislation. It aims to provide businesses and consumers with clarity by supporting market integrity, financial stability and transparency. It requires firms to apply for and receive a license to operate within the EU.
While some businesses have expressed concerns, the overall market sentiment toward MiCA remains positive, with businesses welcoming regulatory clarity. The crypto industry is in its relative infancy, dominated by many startups that need support to flourish in their formative years, when financial resources may be limited. MiCA’s regulations risk draining startups from precious capital, as adapting to MiCA will entail operational complexity and high costs.
Some startups have indicated that to overcome this, they will relocate to friendlier regulatory environments, including the US. Yet, evidence suggests the effect of this will be limited to the riskiest startups and projects and, in return, will set the standard for everything that comes after its implementation.
While regulatory precision is essential, some suggest that MiCA has gone too far and is at risk of stifling innovation with overregulation. A negative effect on innovation appears speculative, however, and the existing crypto community believes MiCA will foster more innovation in the crypto industry and throughout the broader financial sectors thanks to digital infrastructure developments.
Its effect in the coming years will also see traditional and decentralized finance merge into something far more mature and sophisticated than anything currently in place across the Atlantic.
Cryptocurrencies and blockchain technology are part of an increasingly critical industry that will underpin key technological advancements. MiCA provides a strong springboard for Europe, which is positioning itself as a crypto leader, primed to absorb much of the market value. In its shadows, the Trump administration is seeking to catch up, but its showboating and fragmented approach could stifle its long-term success.
While profiting from Trump’s high-profile status in the short term, the SEC must remember to underpin Trump’s promises with strong, consequential, holistic regulation if it wants to drive value to the US and away from European markets.
Opinion by: Mateusz Kara, co-founder and CEO of Ari10
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.