How the US took the lead in Digital Assets in 5 days?

The digital assets landscape transformed dramatically this week, marking a pivotal moment in the evolution of the financial sector. What a week it’s been—filled with monumental announcements, groundbreaking executive orders, and significant regulatory shifts for the U.S. financial system.

Here’s how President Trump and the United States reshaped the future of digital assets in just a few days::

1. President Trump told the world’s elite at Davos that “the US is world’s capital of crypto”

2. President Trump signed a historical crypto executive order to create a “cryptocurrency working group tasked with proposing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile”

3. The SEC repealed SAB 121 under new acting Chair Mark Uyeda 

This shift in tone and action is nothing short of historic. The impact cannot be overstated.

I have been in tokenization since 2020. Back then there were no banks, no institutional investors and no policy support. Skepticism and hostility were the standard response pattern.

How the times have changed. Now you can buy BlackRock’s tokenized MMF and post it as collateral at a crypto prime broker such as FalconX to access margin or you can buy Ondo’s USDY and use it in the wider DeFi ecosystem as a payment method as well as a collateral asset.

The evolution is undeniable—and this is just the beginning. The pace of change will not only continue but likely accelerate, bringing profound implications for the industry.

Banks - Lines of Sights on the Upsides

Major US banks were first to fall in line this week. CEOs took opportunities at Davos to profess their desire to embrace and support America’s crypto ambition.

BlackRock’s CEO, Larry Fink: “As a huge believer in crypto, blockchain and tokenization, I want the SEC to rapidly approve the tokenization of bonds and stocks."

Bank of New York Mellon’s CEO, Robin Vince: “Digital assets represent a new, innovative technology that we believe could play a vital role in the financial system over the next 10 to 20 years.”

Morgan Stanley's CEO, Ted Pick: “We are working with the Treasury and other regulators to figure out how to offer [crypto transactions] safely."

Bank of America’s CEO, Brian Moynihan: "If regulations allow for it, the banking system will come in hard on the transactional side of it... because we have to.”

The reap of SAB 121 presents a huge opportunity for the US banks to enter the market via a low-lift manner: digital ass custody, trading, tokenization and ETF products.

As I have written before, digital asset custody is the gateway for banks to enter the digital asset business. Since they are already familiar with the asset custody process and the digital asset custody is far more profitable than the traditional custody business, it is likely that many, if not all, of them will build out their custody business.

Once the custody business is up and running, banks can leverage their trading expertise to valuable liquidity to digital assets and securities. Tokenization will be the issuance engine that brings supply to the market. With banks now able to custody digital assets without having to set aside equity capital on their balance sheet, expect them to ramp up their tokenization efforts. 

For comparison, Coinbase’s Q3 2024 custody revenue grew by 100% QoQ to $31.7M. Its trading revenue similarly climbed 100% QoQ to $572.5M. Coinbase has no capital markets business so the issuance is still firmly in the bank’s domain.

The ETF business is likely to see a boom too. More than half a dozen new ETF filings dropped immediately after the President’s proclamation. Players such as Morgan Stanley with a retail and wealth management business will be more than happy to expand their product offerings. 

Asset Managers - More Money, More Opportunities

For the asset managers, the changes mean primarily two things. 

1. The regulatory environment gets more productive 

2. There is likely to be more money to tap into

The pioneers of onchain asset management saw a fast growing pool of capital that had no securities to invest in. So starting from the most liquid and safest part of the risk curve came tokenized MMF and Treasuries. That grew to over $4B in under 2 years out of a total $200B addressable market.

With President Trump’s executive order banning the US from issuing CBDC, the alternative’s prospects are looking brighter than ever. And the biggest alternative is of course stablecoins. 

This means increasing legitimacy for Circle’s USDC and Tether’s USDT. I predicted that stablecoin are likely to grow by 50% to $300B in 2025. But the elimination of CBDC from the competitive landscape will likely lift that number even higher. 

A bigger stablecoin pool means an even bigger pool for tokenized issuances from asset managers to tap into. And as I mentioned before whoever reaches the scale for the network will become the foundational layer of money in onchain finance. It’s that simple. 

Startups/Fintechs - 0% CGT for US-based Projects

Yes. Literally. Eric Trump confirmed US-based crypto projects will benefit from zero capital gains tax.

This will spur a MASSIVE reshoring of crypto talent and capital after years of exodus of the US founders due to the oppressive and punitive regime from the previous administration.

And we are already seeing the effect. 

Andreessen Horowitz, a prominent VC, has decided to close its UK office and refocus its center of attention back to the US market. Just 2 years ago, they were welcomed to the UK with much fanfare by the Conservative government. It was their first international office. 

Back then, the move was heralded as a vote of confidence for then Prime Minister Rishi Sunak’s plan to make the UK a global crypto innovation hub. Well so long to that goal.

As the saying goes - follow the money. I fully expect a US led renaissance of crypto applications from social to gaming, from payment to savings, from spot to derivatives trading.

However, I am also confident that many other countries will now have an urgency to not get left behind. Think the UK, the EU and China. The US is likely to drag the world’s crypto markets along with it.

The CEO of Yellow Card, the biggest exchange in Africa, Chris Maurice, said, “With the US moving this way, I think that you’ll see a lot more speed from various governments around Africa in terms of getting to a point of regulatory clarity.”

In 2024, we saw over $3.7T worth of digital asset transactions. For 2025, I fully expect the US to increase its market share while the global volume also makes a leap forward.

Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.