Updated: June 10, 2024, 11:35 AM EDT
Investment bank TD Cowen sees potential disruption in the cryptocurrency industry following regulatory efforts.
The cryptocurrency industry expects stablecoin legislation to be enacted this fall and further expansion of cryptocurrency market regulation within the next two years. But legislation that moves from the bigger picture to the interests of specific companies Jaret Seiberg, a financial services and housing policy analyst, wrote that it “derails” the industry, as has been seen before with the cannabis industry. TD Cowen Washington Research Group
The report argues that the industry typically unites through organized lobbying when pushing its legislative agenda. But as Congress begins to pay attention to specific industries, businesses begin to focus on bills that benefit them individually. This forces lawmakers to pick sides within the industry, undermining progress for the industry as a whole.
Seiberg noted that such divisions have occurred in the cannabis industry. Industry lobbying efforts have stalled to include niche interests in proposed cannabis legislation as states consolidate in a bipartisan push to decide whether to legalize marijuana.
“Navigating the evolution from a bill that couldn’t pass to one that looks likely to pass is now the cryptocurrency industry’s biggest Washington challenge. Companies will decide that stablecoin legislation is not necessary or will benefit competitors too much. can.” Seiberg wrote. “This could derail stablecoin legislation this year, which would rob market structures of momentum heading into 2025.”
“We also believe that there is a risk that industry calls for market rescue legislation will be splintered, as companies could use it to undo SEC enforcement actions or dictate how certain tokens can be regulated. Discord in this area risks splintering. “This makes it much easier for lawmakers to reach a conclusion that the bill is not yet ready to pass.”
On May 22, the House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21), a cryptocurrency bill that includes rulemaking on stablecoins and anti-money laundering.
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About the author
MK Manoylov has been a reporter for The Block since 2020, joining just before Bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for publications covering all cryptocurrency-related news, preferring NFTs, metaverse, web3 games, fundraising, crime, hacking, and cryptocurrency ecosystem stories. MK holds a graduate degree from New York University’s Science, Health, and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. X You can follow MK at @MManoylov and on LinkedIn.