2025 is the year for crypto stablecoin regulation

As a crypto investor with a few years of experience under my belt, I’m closely monitoring the developments in stablecoin regulations both in Europe and the U.S. The recent implementation of MiCA in the EU has certainly turned heads towards the world’s largest capital market, making us all wonder about the U.S.’s plans.

As a crypto investor, I’ve been closely following the developments in stablecoin regulations across the European Union. These new rules have got me thinking about what lies ahead for fiat-pegged tokens in the United States.

The evolving political landscape in the United States has fostered increased initiatives towards cryptocurrency-friendly regulations. Nevertheless, a congressional bill that has been passed by both houses and endorsed by the White House is still under development.

Anastasija Plotnikova, the CEO and co-founder of Fideum, shared her concern with crypto.news during an interview that the cryptocurrency regulatory agenda may be postponed until around 2025.

According to Plotnikova’s analysis, the United States seems destined for extensive stablecoin regulations, irrespective of the election outcome. However, if partially developed legislation is hurriedly passed in the remaining weeks, this prediction could change.

Eneko Knörr, the founder of Stabolut, believes that the result of the upcoming presidential election and subsequent policy decisions will significantly influence the regulatory landscape for cryptocurrencies in the US. In his view, the country has a choice between fully embracing the crypto revolution or risking being left behind in the global competition.

Moreover, Knörr highlighted the contrast between Donald Trump’s supportive attitude towards cryptocurrencies and Joe Biden’s more cautious standpoint. Whichever candidate wins the U.S. presidency, Stabolut’s founder anticipates significant changes in the crypto industry’s trajectory within the United States, potentially extending beyond its borders as well.

Will MiCA’s stablecoin laws influence U.S. regulations? 

Beginning on June 30, the European Union implemented stablecoin regulations outlined in the Markets in Crypto Assets (MiCA) framework across its 27 member states. Circle secured the first license under this new regime, marking a significant step towards introducing legally-compliant fiat-denominated crypto payment systems within the European region.

Europe is leading the way in establishing a detailed regulatory structure for digital assets, bringing increased attention to the global financial hub with the biggest capital market.

As an analyst, I would express it this way: “I note that the US has the advantage of not needing to reach a consensus among 27 Member States with varied interests and political alignments when drafting the bill on stablecoins. However, we should expect intense debates regarding the scope and requirements for stablecoin issuers in the legislative process.”

As a analyst, I concur with Plotnikova and Knörr’s assessment that the current MiCA stablecoin policies require improvement. In my opinion, the U.S. could consider a different regulatory framework to strike a balance between ensuring robust oversight and fostering innovation in the development of stablecoins.

“On the contrary, historical evidence suggests that excessive regulation can suppress innovation and entice both talent and investment towards other countries instead.”

As a financial analyst, I’ve noticed that the regulation of stablecoins has emerged as a significant point of contention among policymakers and financial industry players. Representatives such as Maxine Waters, Patrick McHenry, and French Hill have been actively involved in discussions to establish a consensus on the rules governing these digital assets.

Ex-House Speaker Paul Ryan expressed the view that enacting regulations for stablecoins could provide a solution to alleviate mounting U.S. debt worries by stimulating interest in Treasury Bills. According to Plotnikova, “the U.S. debt predicament has gone beyond the capabilities of private entities to resolve it.” The national debt currently exceeds $34 trillion.

On the other hand, Knörr pointed out that buying more T-Bills could significantly advantage the US economy, despite not entirely resolving the debt problem.

Read More

2024-07-03 19:50