Opinion: Mateusz Kara, ARI10 co-founder and CEO
President Donald Trump’s inauguration marks a new era of US codes, but the country has much to do to keep up with Europe.
Trump outlined his grand plan and made a drastic promise to turn America into a code shelter. At this year’s World Economic Forum in Davos, Trump pledged to make the United States the “capital of the world” of Crypto.
Cryptocurrency is becoming an increasingly strategically important industry, and is expected to grow to $38.6 billion by 2030. The fight to attract crypto market share is on the horizon, with Trump competing to compete for US regulated weapons, but the EU quietly implements its own regulatory framework.
The MICA-equipped EU will benefit from a big head start, leading the industry in the long run and lose some battles against Trump’s spotlight, but will ultimately win the war.
Trump’s personality cult must be supported by policy action
Developed through epic gestures and big, often vague promises, the Trump cult has given the US the spotlight as a crypto leader. His star powers have attracted attention and hype from leading crypto entrepreneurs. However, there are doubts as to whether Trump will turn his procrypt rhetoric into action.
An early indication is that key legislation to drive innovation and the growth of the US crypto industry is ongoing. What is currently missing is the overall framework that provides clarity to businesses across the blockchain space.
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Trump has named Paul Atkins as chairman of the Securities and Exchange Commission, appointed Commissioner Hester Perth, and appointed several pro-crypto positions to famous roles, from appointing the newly created SEC task force from establishing accurate cryptographic regulations. A few days after his presidency on January 23, Trump signed an executive order to create a “national digital asset stockpile,” with the wheel moving for the stubcoin regulatory framework.
Trump shows that cryptography is a priority for his administration, but he needs to do more than patchwork of existing rules or sign executive orders. Competing with the EU requires a holistic regulatory approach.
MICA creates a robust regulatory foundation
Given the growing importance of the crypto industry, the EU has not taken a nap on crypto policy. On December 30th, 2024, we developed a comprehensive regulatory framework, MICA.
Beyond the narrow policies and regulations currently being investigated by the Trump administration, MICA is comprehensive and covers all crypto assets, including those previously not covered by traditional financial services laws. It aims to provide clarity to businesses and consumers by supporting market integrity, financial stability and transparency. Companies must apply and receive a license to operate within the EU.
While some companies have expressed concern, overall market sentiment towards MICA remains positive and companies welcome the clarity of regulations. The crypto industry is in its relative early stages and is dominated by many startups that need support to thrive in formative periods where financial resources may be limited. MICA regulations risk emanating startups from valuable capital, as adapting to MICA involves operational complexity and high costs.
Some startups have shown that they will move to a more friendly regulatory environment, including the US, to overcome this. However, evidence suggests that the effect of this is limited to the most risky startups and projects, and in return sets all standards that come after its implementation.
Regulation accuracy is essential, but some suggest that MICA is over-reaching and there is a risk that over-regulation will curb innovation. However, the negative impact on innovation appears to be speculative, with the existing crypto community thinking that MICA will drive more innovation across the Crypto industry and the broader financial sector thanks to digital infrastructure development.
In its effects over the next few years, traditional, decentralized finance will blend into something much more mature and refined than what is currently present throughout the Atlantic.
Cryptocurrency and blockchain technology are part of an increasingly important industry that supports key technological advances. MICA provides a powerful stepping stone for Europe. Europe has established itself as a crypto leader ready to absorb much of its market value. In that shadow, the Trump administration is hoping to catch up, but its showboking and fragmented approach could curb its long-term success.
While profiting from Trump’s famous position in the short term, the SEC should not forget to support Trump’s promises with strong and consequential overall regulations if they want to increase value in the US and move away from the European market.
Opinion: Mateusz Kara, ARI10 co-founder and CEO
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
