The world has reached an “inflection point”. The election of Donald Trump, taking office on January 20th, 2025, marks a significant shift in the world’s largest economy’s approach towards cryptocurrency.

But the rise of decentralized finance (DeFi) and the ability for peer-to-peer transfer of both information and value creates vast new opportunities, where stablecoins and memecoins hold more potential than they’re given credit for.

Finance and digital asset expert Loretta Joseph notes that the United States’ lack of legal clarity on its crypto stance in the past has been “a real challenge”, but its role now cannot be ignored.

“You’ve got an administration which appears crypto-friendly […] I think the doors will open and the US will lead the world,” she indicates.

Joseph not only has helped craft crypto regulation for the nearly half-billion people making up the Commonwealth, but also consults for numerous international organizations and governments to help them create the most well-guided success cases for their crypto intentions.

And it’s difficult to ignore the rise of Bitcoin itself as an asset class. By broaching the $100,000 mark, it cemented itself as an incumbent, defying even the voices of top financial advisors who prayed for its demise.

But this rise has not been devoid of politics.

“A lot of the driving force in the last 18 months is because you’re probably going to get legal clarity out of the US. And institutions like legal clarity,” points out the expert.

“You can’t overthink the value in assets, and just because it’s not tangible, it’s still a scarce resource,” points out Joseph, noting the fixed amount of Bitcoins in the world – 21 million, and the fact that there’s only around 1 million left to be mined.

But this rise in popularity has triggered what the crypto community labels FOMO (fear of missing out), and the fact that a tiny percentage of the US population had purchased Bitcoin before its meteoric rise to $100,000 begs a question.

“What happens now when the next 99 percent of the population decide they’re going to own a fraction of this asset?”

DeFI and Web3

Unfortunately, the crypto space, for some of us old-timers, can be confusing. And, as Joseph notes, there is an acronym for everything.

One such widely-traded expression is DeFI (decentralized finance). Basically, removing the middleman between you and your financial needs. Sending money to a friend? Send a virtual asset: no bank, no intermediary – peer to peer control. All facilitated by the latest iteration of the internet (the founder of which Joseph studied under), Web3 – allowing both “the transfer of data and value”.

But zooming back in, the United States’ push to be at the forefront, with a president and administration which Joseph lauds as being both tech-friendly and crypto-progressive, carries its own risks.

“If you’re just going to have one form of dollarization going into a digital form of dollarization, we’re going to end back at square one,” notes the expert.

This backs (pun intended) the idea of Tether (USDT), one of the most predominant stablecoins – a cryptocurrency supposedly pegged to the US dollar – diminishing speculative investment returns.

“I think with the US-backed stable coins, if that happens, and all stable coins are issued out of the US, that’s not particularly good for the rest of the world,” discerns Joseph.

Yield-bearing stablecoins

Economists can no longer be trapped in musty libraries, ignorant to the actual use cases of new financial instruments and daily habits of those that grease the wheels of the worldwide financial system.

The current system, given its dominance, still provides a measure of guarantee on investment. If $10,000 dollars goes into a savings account at a bank, it’s expected to deliver some measurable return.

So stablecoins don’t yet hold a strong appeal as an investment strategy.

But that could all change with yield-bearing stablecoins.

Joseph looks at the new paradigm as a throwback, replicating bonds issued by governments, like the US. But she notes an important distinction: once you go digital, you don’t go back.

“Yield-bearing stable coins become really important, because this entire ecosystem will stay in the digital world. It won’t move back into Fiat”.

And the space can only grow, particularly with the progressive input from the incoming US administration.

“What was important 18 months ago is not going to be important in 18 months, but stablecoins are going to be the big thing for the first half of this year,” she opines.

Regulation

For all the naysayers about decentralized finance, the expert points out that regulation will continue to be fundamental. When people are making money, they’re slow to complain, but if money is lost or stolen, they are quick to seek someone to reach out to.

Simultaneously, Joseph argues that “There is no asset class in the world that doesn’t have risk”.

When looking at governments’ ability to intervene or police the space, the expert is keen to point out how markets are open 24/7 – and any operators dealing in crypto have to face daily volatility.

But why stay in the digital finance space?

“You can move it instantly, across borders, 24 hours a day, with no intermediary. For online casinos, once they have your digital asset, it’s very easy to move it.”

Speaking about owning your assets, Joseph notes that crypto is one asset that can’t be seized at an airport, confiscated or remanded.

“For cryptocurrency, it’s hard to police this stuff cross borders,” she indicates, while also furthering that “when you hit the financial system, the governments know exactly what you’re doing with your money”.

As contradictory as this may seem, it is encouraging for retail investors, knowing their assets can contribute to infrastructure (in a well-regulated taxation regime), and be secure in the fact that holding them is not looked down on.

Some key hotspots in Asia are highlights. The Philippines Joseph praises for its progressive approach, Singapore (despite recent changes), Indonesia, India, Malaysia. And further abroad: the UAE.

Joseph highlights how smaller economies can be more mobile in their approach, attracting unicorn enterprises who have literally built themselves into “enormously wealthy companies and without the onerous attachments that we see in companies that have grown in other spaces”.

New changes and US influence

“The US has always been a leader in the tech space, but in this particular space, they’ve been pretty hands off for the last 10 years. That’s allowed other jurisdictions to come in and, probably, get a bit of competitive advantage,” points out the expert.

“The US is still the powerhouse of investment.”

This is furthered by decisions made, such as the as-yet measured influence of billionaire Elon Musk, which might not be a negative.

“He’s not driven by money,” points out Joseph, while commenting on the correlation between Musk’s new unofficial appointment to the Department of Government Efficiency (DOGE) and the memecoin.

“I think for the world of technology and crypto, I think you’ve got an administration that actually understands the technology, and that’s fundamentally different to what we’ve seen in the US over the last decades,” opines Joseph.

And crypto is not the issue.

“Crypto inherently is not left or right. It shouldn’t be. It shouldn’t have ever been a politicized weapon because it’s not. It’s not political, it’s not Republican or Democratic.

“AI is much more polarizing and political-driven,” she notes.

But as crypto continues to boom, the shift away from fiat can only get more apparent, and virtual assets will (potentially) be the future.

“The innovations you’ll see with tokenization are going to be absolutely tremendous in the next 12 to 18 months,” notes Joseph, noting that basically an real-world asset can be tokenized.