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As US election dust settles, crypto traders and analysts eye new administration

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While some in the community continue to question the outcome of the US Presidential election, mainstream media outlets and the Associated Press have definitively called the race for former Vice President and current President-Elect Joe Biden. 

But with uncertainty out of the way, traders and analysts are now looking to determine what a Biden administration will mean for cryptocurrencies — and they appear to have come to a loose consensus that a President who says nothing about crypto is preferable to a president who actively disparages it.

Qiao Wang, the lead at decentralized finance accelerator DeFi Alliance, cheered Trump’s loss, noting that the President had tweeted negatively about Bitcoin and Libra in the past:

Meanwhile, investor Mike Novogratz concurred that a Democratic administration would be good for crypto, saying that an ongoing stimulus program would bolster Bitcoin’s anti-inflationary narrative:

At a macro level, Cointelegraph has previously reported that an incoming Biden administration may bolster markets as uncertainty settles and hopes for additional stimulus run high, but likewise these efforts could cripple cryptocurrencies via a stronger dollar. 

There has also been widespread speculation concerning the crypto inclinations of key appointees in the forthcoming administration. Compound general counsel Jake Chervinsky noted that whoever President-Elect Biden nominates to posts will be more important than incoming President’s personal opinions:

To that end, Politico first reported that former CFTC chairman and Obama appointee Gary Gensler, best known for his hardline enforcement of Wall Street regulations in the wake of the 2008 financial crisis, would be a part of Biden’s transition team. Gensler has spoken positively about Bitcoin in the past. 

Major outlets also reported two weeks ago that economist Lael Brainard, the former Federal Reserve governor who led a MIT joint effort to research CBDCs, is a frontrunner for Treasury secretary.

For all the guesswork, however, US stock market open come Monday will ultimately paint a clearer picture for speculators. Said one popular Twitter trader:





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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.