Crypto’s volatile relationship with the U.S. government will likely see some significant resolutions in 2024, from the arrival of a few consequential regulations to decisions in key court cases that will define how regulators treat digital assets. But the long-awaited rules of the road are likely to remain largely unwritten.
This post is part of CoinDesk’s “Crypto 2024” predictions package.
Every year seems like the absolute tipping point in crypto’s relationship with its U.S. government watchdogs, yet that moment always seems to stay just out of reach. The industry remains desperate for the U.S. to catch up to Europe and other jurisdictions (particularly in Southeast Asia) in putting formal crypto regulations on the books.
The sector’s chief problem is a divided Congress that has even struggled to keep the federal government’s doors open. While lawmakers from both parties in the House of Representatives have suggested they may be able to keep moving forward on crypto bills – especially one to regulate U.S. stablecoin issuers – Senate Democrats have largely shaken their fists at crypto problems without stepping forward to act. There’s no immediate reason to think they’ll see 2024 – a presidential election year when political sniping reaches its peak – as the ideal runway for taking chances on potentially controversial legislation.
“Expectations should be kept in check,” Jaret Seiberg, a policy analyst with TD Cowen, warned in a recent client note. He said crypto legislation’s best bet is as part of “a broad package” of other financial initiatives, such as the cannabis banking bill.
The near-term future for crypto legislation is further complicated by the pending exit of the most effective crypto advocate in Congress, Rep. Patrick McHenry (R-N.C.), the chairman of the House Financial Services Committee. He recently decided to leave at the end of next year, raising questions about what happens to the bills he’s been pushing.
As they await new laws, industry leaders’ best guess is that they’ll get spotbitcoin exchangetraded funds (ETFs) in early 2024. A tremendous amount of hope rides on that development from the U.S. Securities and Exchange Commission (SEC), which would establish highly liquid, regulated funds on exchanges. The sector is counting on that – a very frictionless way…
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