Will 2024 See Regulatory Clarity?

Over the years, a growing demand for better and more precise regulation has been growing to help frame the increasing cryptocurrency industry. More recently, Senate Majority Leader Chuck Schumer, Senators Cynthia Lummis, and Tim Scott remain hopeful that substantive crypto legislation will be approved in the United States by the end of 2024. 

This has sparked a lot of discussion within the crypto-sphere as well as the global financial markets. Now let me walk you through what this might impend and break down the problems here and there.

The Demand for Crypto Legislation 

In the specific case, the motivated intention has been an ongoing problem regarding the passing of crypto-specific laws in the U. S. It has been working under high-profile lobbying to see laws drawn that offer legal definitions regarding the creation, distribution, and utilization of digital assets and blockchain systems. 

In the past, the absence of such measures has seen crypto outfits conducting their business in a legal vacuum and easily vulnerable to crackdowns. 

The speaker of the Senate, Chuck Schumer, recently focused on bringing forward crypto legislation, as was stated at a ‘Crypto4Harris’ online conference. 

Schumer’s commitment to ensuring a new law by the end of 2024 is a big one, especially given the number of days available in the calendar year. 

However, this position further cements the reality of increasing calls for a regulatory direction in the constantly growing crypto space. 

The most relevant proposal to these questions was the Financial Innovation and Technology for the 21st Century Act (FIT21) — the House bill introduced by the chairman of the Financial Services Committee, Patrick McHenry (R, N. C. ). The future of the bill in the Senate remains ambiguous due to the following avenues of legislative process that have yet to be fulfilled.

The Path Forward: Role of Senate Agriculture Committee

At the recent SALT Wyoming Symposium, senators Cynthia Lummis and Tim Scott sketched one way for cryptocurrency legislation to get to the congressional floor. They noted that the Senate Agriculture Committee, headed by Senator Debbie Stabenow, a Democrat from Michigan, could be very instrumental in the passage of the legislation. 

This focus makes the committee an ideal place for initiating crypto-related bills, particularly those that propose classifying commodities and regulating digital assets. Sen. Lummis also raised the issue of the bill becoming a so-called ‘Christmas tree bill’ filled with all sorts of amendments and provisions such as the SAFER Banking Bill or stablecoin rules. 

But with the legislative calendar expiring soon and other priority measures such as the National Defense Authorization Act and budget-related bills. Scott also discussed the possibility of including crypto provisions into other broader legislation, as those frequently become adopted when the session ends. 

Still, there is doubt whether these provisions will garner enough bipartisan support to pass through the Senate separately or as part of the financial measures.

Roadblocks Ahead for Crypto Legislation

Although Schumer acknowledges it, there are problems ahead of Lummis, Scott, and Schumer. The first is the short amount of legislative days remaining this year in 2024.

Also, multi-party support for crypto continues to be a work in progress even though it is less urgent than other matters that affect the nation, such as national security and the budget. 

The fact that FIT21 passed the House of Representatives with support from both parties to the alternatives is reassuring, but this means that it crosses the political divide and goes to the Senate, which may find different kinds of support.

Another issue that might slow down the development is the nature of the regulation of cryptocurrencies, which still needs to be clarified and can be problematic and sometimes disputable. 

Politicians have different opinions on addressing crucial questions like the regulation of stablecoins, the classification of cryptocurrencies and assets, and the powers of federal departments like the SEC and CFTC. 

These divisions might delay the legislation process or result in half-baked legislation bills that must be more capable of adequately addressing the situation in the industry’s interest.

Our Take

That is why the activity of lawmakers and the decision on whether or not to enact legislation on dumps and crypto in Congress will remain a practical expansion focus in 2024. 

Whether as a single piece of legislation or part of broader complicated legislative proposals, the way forward to achieving certainty in regulating the crypto markets remains a minefield.

However, the increase in the awareness of such legislation indicates that such legislation may be close if not this year.