Fueling America’s Fintech Revolution: What to Expect from a Second Trump Term

As is to be expected with any big change, the outcome of the recent US election is projected to have a significant ripple effect on both the American and global economies. These effects will extend to the rapidly growing fintech and crypto sectors, but what does this mean?

Lack of Regulation - A Good Thing for the US?
A key component of the Trump’s past economic policies was the push for deregulation in the financial sector. While Trump’s administration tended to favour innovation, its stance towards imposing heavy-handed regulations on emerging technologies like cryptocurrency tended to be skeptical. This meant that certain areas, like digital assets and blockchain technology, were largely unregulated during Trump’s time in office, leading to growth without the constraints imposed by a clear regulatory framework.
In addition to lax regulation standards, his administration also sought to actively roll back various financial safeguards put in place after the 2008 financial crisis under the Dodd-Frank Act. This actually had positive implications, particularly for startups, by allowing companies to access capital more easily. By reducing red tape, fintech companies have more flexibility to innovate and pass savings onto customers. His proposed tax cuts could also make the US a more attractive hub for foreign investment in the fintech industry. This may result in more cross-border partnerships and international collaborations, allowing for greater wealth transfer as a result of open banking policies.

Global Implications
However, lenient regulatory standards, while appealing, also have some negative implications for the global market. A focus on deregulation could create a situation where American fintech companies face fewer barriers, while companies based in regions with stricter rules (such as Europe, China, and India) struggle to compete. This divergence in standards could create a great deal of complexity and uncertainty for international fintech companies trying to operate in the US and foreign markets, potentially increasing the risk of bankruptcy.
There is also further potential for conflict regarding cross-border data sharing. One of the core principles of open banking is the ability to share financial data across borders. However, Trump’s administration has historically shown great reluctance in adopting international rules for data protection. If the US follows a more hands-off approach, this could make it difficult to serve global customers without incurring extra compliance costs.

America First
Despite the challenges international investors will likely be faced with, Trump’s “America First” agenda is largely good for Americans. While this comes at the cost of international growth, it ensures that the US is able to stay ahead of international competitors and dominate the blockchain and fintech industry. However, as long as competitors are aware of the challenges and plan accordingly, there is no reason that they too cannot prosper.