Will the US Determine the Fate of Cryptocurrencies? Positive or Negative Impact on the Crypto Sector? – Insights on Bitcoin (BTC) and Ethereum (ETH)

  • The US is set to vote on a comprehensive crypto market structure bill, the Financial Innovation and Technology Act (FIT21), led by the Republicans.
  • Investment bank TD Cowen suggests the bill has a low chance of becoming law in the current Congress, but could serve as a critical stepping stone for future legislative efforts.
  • Despite obstacles, TD Cowen sees FIT21 as a critical foundation for Congress when a new effort to enact crypto market structure legislation is expected in 2025/2026.

As the US prepares to vote on the FIT21 crypto bill, TD Cowen offers insights into its potential impact on future crypto regulations and the market.

Understanding the FIT21 Crypto Bill

The FIT21 bill, set to be voted on by the House of Representatives at the end of the month, proposes a comprehensive approach to regulating the burgeoning crypto market. It aims to assign more regulatory responsibility to the Commodity Futures Trading Commission (CFTC), often seen as a softer regulator for cryptocurrencies.

Challenges to the FIT21 Bill

Despite the bill’s potential, TD Cowen’s Washington Research Group, led by Jaret Seiberg, warns against getting caught up in the details of this legislation. They wrote in a note, “There is no chance of it becoming law in this Congress.” The group cites the lack of preparatory work by the Senate Banking and the Democrats’ focus on investor protections as the main reasons.

Future Implications of FIT21

Despite these challenges, TD Cowen views FIT21 as a critical foundation for Congress when a new effort to enact crypto market structure legislation is expected in 2025/2026. The bill brings together members of the House of Representatives and shifts the focus to the Senate to implement its own proposal.

Political Influence on Crypto Regulations

The FIT21 vote could shed light on how Democrats and Republicans view critical issues such as preventing money laundering and investor protections. TD Cowen expects FIT21 to pass the entire House. However, the bank notes the potential for future “problems” with former President Donald Trump’s recent expression of support for crypto. They believe Trump’s stance could further polarize crypto regulation and make it harder to find a bipartisan agreement.

Conclusion

While the FIT21 bill faces significant hurdles, it could serve as a stepping stone for future crypto regulation efforts in the US. The political landscape, including the positions of key figures like Donald Trump, will likely play a significant role in shaping these regulations. As such, the crypto community and investors will be closely watching the developments around FIT21 and its implications for the market.

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Jocelyn Blake
Jocelyn Blakehttps://en.coinotag.com/
Jocelyn Blake is a 29-year-old writer with a particular interest in NFTs (Non-Fungible Tokens). With a love for exploring the latest trends in the cryptocurrency space, Jocelyn provides valuable insights on the world of NFTs.
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