In a whirlwind election that saw crypto emerge as a pivotal campaign issue, the digital finance industry now finds itself at a regulatory crossroads. With over $100 million in crypto-related campaign spending and bold promises from a newly reelected President Trump, the scene is set for a groundbreaking new chapter in DeFi oversight. But as Bitcoin soars past $90,000 post-election, industry leaders say the path forward must rise above partisan politics to cement crypto’s role in the nation’s financial future.
Rebecca Rettig, Chief Legal & Policy Officer at Polygon Labs, recently testified before the House Financial Services Subcommittee on Digital Assets in a hearing that now feels like a snapshot from a bygone era. What began as a technical discussion on DeFi fundamentals soon evolved into a debate on America’s role in the future of finance, foreshadowing themes that would go on to reshape campaigns nationwide.
Innovation, consumer protection, and financial inclusion aren’t Republican or Democrat values — they’re American values.
Rebecca Rettig, Polygon Labs
Forging Common Ground
Despite imminent changes to key committees, Rettig argues that the fundamentals of responsible DeFi oversight must endure. Election results, particularly in races where crypto policy played a decisive role like Bernie Moreno’s win over Sherrod Brown in Ohio, prove that voters across party lines are moved to action by the promise of financial innovation and inclusion.
To build on this momentum, Rettig outlines three critical initiatives requiring joint effort from industry and policymakers:
1. Education
With a new cast of characters entering Congress and committee assignments in flux, DeFi’s educational imperative is more crucial than ever. Beyond stellar policy advocates like the DeFi Education Fund and Coin Center, founders and builders must personally speak to their work, giving DeFi a tangible face. Policymakers, in turn, must invest time in understanding the technology, its users, and beneficiaries before enacting laws.
2. Meaningful Use Cases
To move beyond speculative hype, the industry needs to build applications that solve real problems. Rettig highlighted The Value Prop, an open database cataloging use cases for blockchain apps across all major crypto networks. Regulators must also grapple with the revolutionary potential of this tech to redistribute power and put data ownership back in the hands of individuals.
3. Security
Bad actors exist in both DeFi and TradFi, but DeFi’s transparent, real-time transaction data is its greatest asset in building a more secure system. Grassroots security efforts like ZachXBT and the Security Alliance are crucial, and Rettig has co-authored a three-part framework to combat illicit DeFi finance. The industry must continue to innovate on safety while policymakers learn to map existing financial laws to intermediary-free systems.
Ultimately, the future of DeFi regulation demands nuanced understanding and deep collaboration. With seasoned industry leaders, compelling use cases, and robust system security, the U.S. has an opportunity to lead, but only if we approach DeFi with the sophistication and forward-thinking it deserves. In a post-election world, it’s time to reach across the aisle and build the regulatory foundation for a thriving decentralized economy.
