currencyjournals — As optimism grows within the cryptocurrency sector, TD Cowen urges warning concerning the construction of the cryptocurrency market and the opportunity of swift legislative motion on stablecoin regulation. TD Cowen means that rising hopes of progress in Congress could also be untimely and unfounded.
The cryptocurrency {industry} has been actively lobbying for regulatory readability, and key figures and organizations throughout the {industry} have expressed optimism concerning the prospects for vital legislative progress.
Senate Majority Chief Chuck Schumer lately added to this optimism, saying it’s “completely potential” for Congress to cross the Crypto Market Construction Act by the top of the yr.
Schumer pointed to the Home-passed cryptocurrency market construction invoice, FIT21, and a invoice presently being drafted by the Senate Agriculture Committee as potential avenues for this progress.
However analysts at TD Cowen give a number of causes to be skeptical.
“Crypto firms have been lively political donors, with Public Citizen reporting on Aug. 21 that crypto firms have donated $119 million this yr, accounting for 48% of all company donations,” the analysts mentioned in a observe.
Moreover, FairShake PAC, the main crypto political motion committee, has acquired roughly $95 million from {industry} executives and stakeholders. These donations undoubtedly affect legislative priorities, as evidenced by the bipartisan effort to disregard industry-opposed SEC accounting guidelines.
Regardless of this financial impression, TD Cowen warns that optimism throughout the cryptocurrency sector could also be misplaced.
The memo mentioned that whereas Schumer's feedback increase hopes, his observe file suggests these broad guarantees might not translate into concrete motion, particularly because the election marketing campaign heats up. The evaluation drew parallels with the hashish {industry} in 2022, the place the administration promised comparable legislative motion throughout the lame-duck session however in the end fell brief.
TD Cowen additionally pointed to political obstacles that would impede progress: “In our view, the crypto {industry}'s choice to spend $12 million to defeat Senate Banking Chairman Sherrod Brown has worsened the prospects for laws passing this yr,” the analysts mentioned.
Given Brown's affect, his opposition might pose a serious impediment to any cryptocurrency-related laws, not simply this yr however sooner or later, relying on the result of his reelection.
Moreover, TD Cohen expressed skepticism concerning the outlook for 2025, whatever the election consequence, saying each political events might attempt to extract extra donations from the crypto sector earlier than delivering legislative victories, which might additional delay the method.
