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In the New Year, we can expect the first priority to be a stablecoin bill (although the details are still being negotiated), followed by a market structure bill. Trump could create a Strategic Bitcoin Reserve with an executive order, or Congress could create a new federal facility for this.

Tether specifically

Tether is a huge winner from the election. This was kind of an unexpected blessing for them, since they weren’t known to have participated in the electoral cycle at all nor were they listed as donating to any super PACs. (As a foreign entity, they would have been prohibited from doing so.) Howard Lutnick, the CEO of Cantor Fitzgerald, which custodies a large share of Tether’s Treasury portfolio, is a huge Tether bull. He is also the co-chair of Trump’s transition team and even threw his name in the hat for Treasury Secretary. Lutnick deeply appreciates the value proposition of stablecoins like Tether.

The biggest threat to the $125 billion stablecoin issue is regulatory or law enforcement action, with the DoJ reportedly investigating them yet again. Due to a barrage of negative press coverage, Tether was never going to be fully in the clear. Although no one really worries about their reserves any longer, associations with illicit finance continue to plague it. Lutnick’s close relationship with Trump represents a meaningful political bailout for the stablecoin. You know that somewhere in the Bahamas, an Italian named Paolo was clinking champagne flutes on election night.

DeFi specifically

DeFi also looks to gain from the election. At the moment, the industry suffers from a regulatory paradox. Every feature that makes tokens worthwhile to hold – cashflows accreting to holders, real governance rights, and so on – also makes them more like securities legally speaking. This has forced founders to tread a delicate path between making the token attractive and trying to avoid the dreaded security designation.

This is ultimately an impossible path. Many of these tokens resemble a form of pseudo-equity and should be treated as such. Now as SEC chair Gensler looks to be on his way out, the SEC looks poised to install a regulatory framework to treat these tokens as pseudo-equity requiring light-touch disclosure for investors. This would level the playing field and make the DeFi space fairer for investors, while allowing founders to treat the tokens more like protocol equity.

The market is anticipating this, as DeFi names are already catching a bid. I expect that this flight to quality will continue over the coming months as the SEC’s agenda for tokens crystallizes.

Banks serving crypto

Crypto people often think that it’s crypto versus the banks. But the contrary is the case. Banks have been trying to get into the crypto space for a long time, although they have been largely walled off from serving the industry. SEC rule SAB121 has meant that banks holding crypto on behalf of clients have to hold it on their balance sheet, making such custody models prohibitively expensive.

In 2023, the Fed warned banks not to do business with stablecoins. And of course, banks have been discouraged from serving crypto clients by the FDIC, OCC, and Fed. This has been dubbed “Operation Choke Point 2.0.” Even today, after Chokepoint 2.0 has been exposed , the FDIC is insisting that banks offer no more than 15% of their depository base to crypto firms. Many banks would like to bank crypto firms but simply cannot.

Meanwhile, foreign banks are feasting, getting involved in crypto custody, exchange, stablecoin/FX brokerage, and even issuing stablecoins themselves. U.S. banks have been left out.

This is all likely to change under Trump. We know SAB121 will go away whenever Trump forces SEC chair Gensler out. Although Congress passed a SAB121 overturn (which was subsequently vetoed by Biden), no such bill will be necessary when SEC leadership turns over. SAB121 was imposed by fiat, and it can be eliminated with the stroke of a pen by Gensler’s successor. So banks will be free to custody crypto.

Chokepoint 2.0 will undoubtedly end, as Trump appoints a new Comptroller and FDIC Chair. Banks will be at liberty to serve crypto firms to their pleasure. Whether banks will be allowed to issue or transact with stablecoins remains an open question.

Prediction markets

Lastly, prediction markets were huge beneficiaries of the election, having performed exceptionally well. Polymarket was far sunnier on Trump’s (and general Republican) prospects than most of the pollsters, and called a number of races long before the pundits and MSM did. Aside from stablecoins, prediction markets appear to be the first meaningful breakout consumer product built on crypto. Finally, a use case. Prediction markets do outperform the polls and the press , and they will be a defining feature of political life for years to come.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.