The 2024 election cycle has culminated in a profoundly shaken political landscape for digital finance. With over $100 million in spending by the crypto industry across all races and Trump’s victory kickstarting promises of a pro-crypto administration, the regulatory outlook has shifted in ways that may surprise some. Amidst the headlines and market euphoria—Bitcoin surpassed $90,000 after election night—we need to refocus on the crypto industry itself. The path forward cannot be about partisan politics. The discourse should center on how our industry is stepping into its new role in Washington.
Two months ago, I found myself testifying before the House Financial Services Subcommittee on Digital Assets. That hearing now feels like a snapshot from a different era—before an election cycle that saw crypto emerge as a genuine campaign issue, complete with promises for a national Bitcoin stockpile and vows to overhaul regulation. What began as a technical discussion about the fundamentals of DeFi became a debate about America’s role in the future of finance.
Crypto’s Bipartisan Appeal
Although the election brought changes to key committees, including Financial Services, the bedrock principles of responsible DeFi governance should not shift with political winds. Innovation, consumer protection, and financial inclusion are not Republican or Democratic values—they are American ones. The election results, especially in races where crypto policy played a decisive role—such as Bernie Moreno’s victory over Sherrod Brown in Ohio—demonstrate that voters across party lines are energized by the movement on these issues.
For me, “representing DeFi” means advising the small startups in Brooklyn apartments. After all, decentralized finance is above all an emerging movement within the broader crypto industry that foregrounds how decentralized software can elevate many of our everyday financial activities. Few in those buildings imagined this would become a major campaign issue, where candidates actively courted industry support and debated the future of digital assets.
Education is Key
The election results magnified what we began to see at September’s hearing: crypto’s ability to transcend traditional political divisions. When Rep. Wiley Nickel (D-NC) opened that session by declaring: “DeFi […] could make our financial system more accessible, transparent, efficient, and innovative.” In seeking “common ground to support both innovation and consumer protection,” he highlighted themes that would reshape campaign narratives nationwide and serve as a guide for how crypto should emerge as a rare point of bipartisan cooperation in a polarized political climate.
We can achieve this common ground through three critical initiatives—with joint efforts from industry and policymakers:
- First, education. With constantly changing new faces arriving in Congress and committee assignments, the mandate for DeFi 101 education from September is becoming more vital. This election cycle showed that when policymakers understand our technology, they are more likely to support it.
- Second, build useful applications. During the hearing, representatives inquired about financial and non-financial use cases. One privilege was answering questions and discussing The Value Prop, an open database documenting use cases for blockchain-based applications across all crypto networks.
- Third, keep DeFi safe. Bad actors are everywhere, in DeFi and TradFi alike. One of DeFi’s inherent characteristics—transparent, real-time transaction data—is also its greatest asset in creating a safer system than the traditional financial world.
The future of DeFi regulation requires nuanced understanding and deep collaboration. Thoughtful industry leaders and regulators, better use cases, and system security are essential to realizing the long-term benefits of this technology.
Rebecca Rettig, Chief Legal & Policy Officer at Polygon Labs
The U.S. has an opportunity to lead, but only if we approach DeFi with the nuance and forward-thinking it deserves. As an industry, we must still improve on security while policymakers need to learn that mapping existing financial laws onto intermediary-less systems is not always feasible.
In short, the industry should still evolve on security, while policymakers need to learn that it’s not possible to map existing financial laws onto systems without intermediaries.
The future of DeFi regulation requires nuanced understanding and deep collaboration. Smart industry leaders and regulators, better use cases, and system security are key to achieving the long-term benefits of this technology. The US has a chance to lead, but only if we approach DeFi with the nuance and forward-thinking it deserves.
