Complex Battle Behind Crypto Legislation
According to recent analysis from TD Cowen, the crypto market structure bill faces multiple obstacles in Congress. The tensions between banks and crypto firms, combined with political resistance, have stalled significant progress on the legislation.
Even with some consensus within the industry, Senate Democrats remain firm on issues related to investor protection, anti-money laundering (AML), and conflicts of interest. These are seen as the main roadblocks to passing the bill. Some analysts suggest only direct presidential involvement could help broker a deal.
Stablecoin Regulation Sparks Debate
In the meantime, the White House is in discussions with banks and crypto players over stablecoin regulation. Banks worry that interest-bearing stablecoins could divert traditional deposits, while some crypto firms argue these concerns have already been addressed in the GENIUS Act.
- Banks fear deposit outflows
- Crypto firms claim solutions exist
- Timing and intensity of regulation remain key disputes
Securing Democratic Support is Crucial
TD Cowen highlights that the real challenge lies in determining the timing of regulatory authority and its scope. At this stage, winning over around 10 Democratic senators remains the biggest hurdle to passing the bill.