Note from the Publisher: There is much speculation on what the Trump presidency will mean for markets in general, and in fact, we’re already seeing high and low swings here in the US and abroad, and we’re only a few days past the election at this point. Likewise, there is speculation on how his presidency will affect fintech. We feel it’s FAR too early to speculate on this, and since he skews business-friendly, our hope is that his administration will also be fintech-friendly and pragmatic with regard to digital currencies and their future. Others have different opinions, and below is one perspective of changes that may come.
“Donald Trump’s surprise win of the US election has already caused volatility among financial markets around the globe. It’s also likely that the Trump presidency will have an impact on the US fintech industry. Here are our initial thoughts:
Fintech investment will likely slow. A slow down in US fintech funding would track the trend seen in the UK in the aftermath of Brexit — at least in the near future. That’s because economic uncertainty makes investors cautious. Trump’s economic plan entails widespread changes that would take time to implement, and the direct and indirect impacts of the plan aren’t immediately clear.
- Less chance of fintech-specific regulation. Prior to announcing his economic plan in August, Trump repeatedly called for the scaling back or repeal of Dodd-Frank, and suggested abolishing the Consumer Finance Protection Bureau (CFPB), the most fintech-friendly of the US agencies. His final plan made no specific mention of either, but it did include the statement, “I will issue a temporary moratorium on new agency regulations.” This could be a significant blow for fintechs, which have been calling for fintech-specific regulation in order to simplify their paths to compliance and stimulate further growth.
- Restricted access to labor. Trump has been very vocal about his desire to significantly reduce immigration to the US. If he goes forward with his immigration policies, it could be a serious setback for the US startup scene, including fintech, which sources a large volume of its skilled workers and entrepreneurs from outside the country. For example, 51% of US unicorns, or startups valued at over $1 billion, including fintechs Stripe and Oscar, were founded by immigrants, according to a study by the National Foundation for American Policy.
Regardless of how the situation plays out under President Trump, there is no denying that the world has still entered the most profound era of change for financial services companies since the 1970s brought us index mutual funds, discount brokers and ATMs.”