The results of the 2024 US election, with Republicans taking control of the White House, Senate and Congress, could significantly reshape the US cryptocurrency regulatory environment, according to S&P analysts.
According to a recent S&P Global report shared with crypto.news, this political shift could shift the U.S. approach to cryptocurrency regulation from enforcement-led measures to a more predictable rulemaking framework.
The United States has trailed other major markets in improving regulatory clarity for digital assets. Regions such as Europe have introduced structured frameworks for stablecoin and other cryptocurrency activities.
Stablecoins, a type of cryptocurrency linked to fiat currencies such as the U.S. dollar, are essential for enabling blockchain-based payments beyond cryptocurrency markets.
However, in the United States, companies risk taking enforcement action over unclear definitions of securities, which could lead to fines and legal disputes. The lack of clarity also impacts staking, the process by which investors lock up cryptocurrency assets to earn rewards. Some companies have stopped offering staking services due to regulatory pressure, but others are challenging these restrictions in court.
“Cryptocurrency companies in the United States are at risk of fines and enforcement actions related to listing unregistered securities. This is because regulations are unclear as to whether cryptocurrency assets are securities,” the analysts wrote.
upcoming bill
Regulatory changes regarding the storage of stablecoins and cryptocurrency assets can be expected as early as 2025, analysts at S&P said in a note.
Additionally, custody services for cryptocurrency assets face serious challenges due to existing regulations such as the SEC’s Special Accounting Disclosure – SAB 121. The rule requires companies that hold cryptocurrency assets on behalf of customers to report those assets as liabilities, making cryptocurrency storage expensive for U.S. banks. .
Although a proposal to repeal SAB 121 was rejected earlier this year, the new administration could reconsider the issue, potentially paving the way for greater market participation.
Bitcoin holdings?
One of the more ambitious proposals is that of Senator Cynthia Lummis, who proposed that the Federal Reserve should acquire 1 million Bitcoin (BTC), or about 5% of the total supply of Bitcoin, over the next five years. Supporters argue that this would prevent currency depreciation and manage the country’s debt, while critics question the feasibility and implications of such a move.
Even if the bill does not pass, analysts believe the narrative around Bitcoin is changing amid growing interest in its role in traditional financial markets. According to the note, these discussions could further influence the global adoption of Bitcoin by encouraging other countries to consider similar measures.
Global Cooperation – It’s Time for America to Catch Up
In addition to domestic concerns, S&P notes that blockchain innovation in financial markets has been hampered by the United States’ lack of participation in global regulatory coordination. Greater participation from the United States could help expand existing blockchain use cases domestically and internationally.
“We believe that with strong U.S. participation, this already well-tested use case can be commercially scaled domestically and globally,” the analysts wrote.
As the United States enters a period of potential regulatory change, market participants await what’s next from lawmakers. According to S&P, developments in the regulatory framework could bring much-needed clarity and open new doors for innovation and growth in the digital asset sector.