New Congress, Fresh Opportunities for Crypto Legislation in 2025

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As a seasoned analyst with over two decades of experience in financial markets and technology, I have witnessed the evolution of the digital economy from its infancy to the powerhouse it is today. The upcoming year, 2025, promises to be an exciting one for cryptocurrencies, with a pro-crypto Congress taking shape under President Trump’s leadership.

In the upcoming year, 2025, the United States Congress is preparing to take a more active stance in regulating cryptocurrencies, aiming to make this Congress the most supportive of cryptocurrencies yet.

As a researcher, I find myself brimming with anticipation, given Donald Trump’s significant triumph in the presidential election and his expressed pro-crypto stance. Initially, legislators might need a few months to acclimate, but experts predict swift action from them once they’ve settled in.

Stablecoin Bill 

Over the last several years, legislators have been striving to enact a law concerning stablecoins. Since 2022, Representatives Patrick McHenry (R-N.C.) and Maxine Waters (D-Calif.) have been developing a regulatory system for this purpose.

The financial services bill that cleared the House Financial Services Committee last year encountered a standstill, primarily due to disagreements, especially concerning a clause permitting state authorities to endorse stablecoins sans Federal Reserve intervention. Representative Waters previously deemed the bill as “deeply troubling.

There’s a possibility that the bill could be presented once again in the House of Representatives in the year 2025. Given that the Senate is currently dealing with other matters, this is a likely scenario. With a Republican-majority Congress presiding, modifications to the bill may be made to make it more favorable for individual states.

In 2024, a Senate draft that’s reminiscent of one proposed earlier by Senator Bill Hagerty was put forward. Nonetheless, the CEO of DeFi Education Fund, Miller Whitehouse-Levine, expressed doubt about the bill passing in 2025, stating it as unlikely while expressing optimism for a stronger chance in 2026. The sentiment, “Time will tell,” could be applied here.

FIT21

Additionally, Patrick McHenry played a pivotal role in advocating for the passage of the FIT21 bill. This legislation empowers the Commodity Futures Trading Commission (CFTC) to exercise greater oversight over cryptocurrency markets, specifically Bitcoin. Furthermore, it clarifies the responsibilities of the Securities and Exchange Commission (SEC) in this context.

Whitehouse-Levine explains that FIT21 intends to establish what decentralization means in terms of disclosure guidelines, by suggesting, “The key distinction FIT21 proposes is whether the transactions concern a project or network that is centralized or not.” However, it’s also possible for a Senate counterpart bill to emerge, but numerous pressing matters could slow down advancements.

Nevertheless, the future of these regulatory bodies (SEC and CFTC) is uncertain as their leadership will transition next year. President Trump has selected Paul Atkins to head the SEC, who has shown a supportive stance towards cryptocurrency. There’s also a possibility for potential adjustments in FIT21, focusing on clarifying the definition of decentralization.

Tax Super Bowl

Preparing myself for an intense fiscal showdown next year, given that the Trump’s Tax Cuts and Jobs Act (TCJA) will reach its end. As a seasoned analyst, I liken this upcoming tax debate to the “Super Bowl” of taxes – a high-stakes game with far-reaching implications, according to Alison Mangiero from the Proof of Stake Alliance.

The legislative initiative put forward by Representatives Wiley Nickel and Drew Ferguson seeks to impose taxes on staking rewards only upon their subsequent sale. Mangiero expresses his hope that this concept will be incorporated during the revision of the Tax Cuts and Jobs Act (TCJA).

Additional Factors Impacting Crypto Legislation

The Digital Asset Market Infrastructure Proposal intends to tackle the safekeeping of digital assets within conventional finance systems, potentially being approved as early as 2025.

Legislators are advocating for clearer rules concerning regulation, with Representative French Hill focusing on drafting bills regarding digital assets. These prospective laws might address issues like taxation, Anti-Money Laundering (AML)/ Know Your Customer (KYC) compliance, and other crypto regulations.

There’s growing interest in the idea of a strategic Bitcoin reserve. Former President Trump is among its supporters, and Senator Cynthia Lummis has proposed a bill for the U.S. Treasury to acquire one million Bitcoins over a five-year period. Yet, it remains divisive, as it hasn’t garnered bipartisan support or Senate endorsement. The role of Senator Warren, who serves as the top Democrat on the Senate Banking Committee, adds complexity to the situation.

As an analyst, I find myself navigating a complex landscape where multiple pressing matters such as tax reform demand attention. Consequently, the pace of advancements in cryptocurrency bills could potentially be sluggish. Looking ahead to 2025, the fate of crypto legislation hinges upon intricate negotiations, valuable input from regulatory agencies, and the ever-evolving public opinion.

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2024-12-26 23:16