US Crypto Regulations Oppose CBDC and stablecoin: JPMorgan

As an analyst with a background in financial regulation and cryptocurrencies, I believe that JPMorgan’s recent analysis hits the nail on the head regarding the evolving U.S. crypto regulatory landscape. The increasing regulatory measures against a Fed coin, U.S. banks’ involvement with crypto, non-compliant stablecoins like Tether (USDT), and classification of all tokens outside Bitcoin (BTC) and Ether (ETH) as securities are concerning for the crypto industry.

According to JPMorgan’s assessment, the regulatory landscape for cryptocurrencies in the United States seems to be shaping up in a way that may hinder the development of a central bank digital currency, discourage local banks from adopting crypto, and crack down on stablecoins that don’t comply with regulations.

As a financial analyst, I’ve noticed that the banking sector has raised concerns about heightened regulatory actions towards cryptocurrencies in the United States in the past few months. These developments have sparked debate about potential future regulations surrounding digital currencies leading up to the presidential election later this year.

According to a report from analysts headed by Nikolaos Panigirtzoglou, new regulatory actions seem to be at odds with the introduction of a Fed coin, restricting crypto activities for U.S. banks, flagging non-compliant stablecoins like Tether (USDT), and categorizing all digital tokens other than Bitcoin (BTC) and Ether (ETH) as securities.

As a financial analyst, I have assessed the likelihood of various legislative proposals being enacted before the November election. Among them, the Clarity for Payment Stablecoins Act stands out as the most promising candidate. If passed into law, this bill will significantly bolster the position of US-compliant stablecoins in the market. However, it may also pose a threat to the dominance of non-compliant alternatives like Tether.

As a crypto investor, I’ve been keeping a close eye on the recent developments regarding the Financial Innovation and Technology for the 21st Century Act, or FIT21. Excitingly, this legislation was passed by the House last month. However, it’s essential to note that its journey isn’t over yet. It still needs approval from the Senate and the president. Unfortunately, given the upcoming election, it seems unlikely that we’ll see these approvals before then.

JPMorgan points out that Congress passed a resolution annulling the SAB 121 accounting rule, designed to make it harder for financial institutions to hold crypto assets. However, President Biden rejected this resolution with a veto.

The Central Bank Digital Currency (CBDC) Privacy Protection Act aims to put a stop to the development of a U.S. CBDC by the Federal Reserve, restricting them from employing specific consumer goods and monetary tools. Last month, a bill preventing the Federal Reserve from launching CBDCs was passed in the House, but its prospects in the Senate remain uncertain.

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2024-06-06 19:48