*By Nicole K. Finopoulou
The global cryptocurrency market is experiencing a huge change after Donald Trump's return to the White House. Although in the past, Trump was skeptical of digital assets, he has adopted a completely different approach in his new term, promising to turn the United States into the "capital of cryptocurrencies" and "Bitcoin superpower". This policy change has sent shock to financial markets, fueling both optimism and regulatory uncertainty to various jurisdictions.
One of the immediate results of the Trump election was the sharp increase in the value of Bitcoin. On the night of November 5, 2024, as it became clear that Trump secured a second term, Bitcoin exceeded $ 75,000, and on the day of his swearing -in reached a historic high of $ 109,000. This increase reflects the increasing confidence of investors in a more secretive regulatory environment in the US.
The Trump government has already taken decisive measures to reform the landscape of cryptocurrencies. On January 23, 2025, the President ordered the creation of a special group to develop a new regulatory framework for digital assets. In addition, he pledged to remove the chairman of the US Securities and Exchange Commission (SEC) Gary Gensler, a move strongly supported by the cryptocurrency industry, as Gensler had adopted a strict supervisory stance.
The new US government's intention for regulatory clarity and institutional support for cryptocurrencies has led to a rapid expansion of the market, with Bitcoin now representing 55% of the total value of the cryptocurrency market, while Ethereum covers about 10%.
Despite these positive trends, market experts warn of potential risks. Many investors, especially those who have no previous experience, do not adequately appreciate the dangers associated with investment in cryptocurrencies, making them vulnerable to fraud and speculation. Some cyber security professionals have compared the current situation of cryptocurrencies with the "Wild West", where regulatory gaps allow malicious factors to exploit inexperienced investors.
EU regulatory approach for cryptocurrencies
While the US is moving towards a more relaxed and supportive policy on cryptocurrencies, the European Union (EU) has adopted a different approach, focusing on establishing an integrated regulatory framework. Recognizing the potential risks of cryptocurrencies markets, the EU officially approved the regulation for the cryptocurrency markets on May 16, 2023.
The European MICAR regulation sets out clear rules for publishers of cryptocurrencies, exchanges and service providers, aiming to create a harmonized regulatory environment in all EU Member States. Introduces licensing and supervisory requirements for various types of cryptocurrencies, including Bitcoin), Utility Tokens, Tokens referring to assets (ARTs) and Electronic Money tokens (EMTs).
In addition, in December 2024, the Directorate -General for Financial Stability, Financial Services and European Commission Capital Markets (DG FISMA) presented the latest developments in the implementation of the MICAR and Digital Operational Rules (DORA). These two regulations were designed to operate in addition, ensuring that cryptocurrencies remain innovative and resistant to operational dangers.
The role of Cyprus in the ever -changing landscape of cryptocurrencies
As a member country, Cyprus has to align its approach to digital assets with EU regulations. Although Cyprus is a center of innovation for Fintech, the Cryptocurrency sector is now entering a new phase of regulatory compliance.
Cyprus's commitment to compliance with EU regulatory standards, such as the adoption of MICAR and DORA regulatory regulations, may be construed by financial markets as a supporter of the country's reputation effort as responsible and modern financial center in the Eastern Mediterranean and EU Member State.
With the implementation of a well -structured licensing regime for Cryptocurrency Providers (CASPS), Cyprus can attract institutional investors and fintech businesses that prioritize regulatory clarity and market stability.
Cyprus should balance between its role as an innovation hub and the need for strong consumer protection, maintaining compliance with EU rules. The development of the cryptocurrency market offers the country a unique opportunity to establish its position as a leader in viable and regulated and regulated.
*Lawyer, Banking & Financial Services, ESG & Sustainable Finance Expert, Regulatory Compliance & Corporate Governance, LL.B (Hons), LL.M (UCL), LPC, CISL, University of Cambridge
