Crypto Legislation Prospects

Crypto legislation is unlikely to progress before the end of 2024, although a stablecoin bill has the potential for success, according to TD Cowen’s note on Monday.

U.S. lawmakers are currently on recess and will not resume until after the election, leaving a limited lame-duck session available for passing bills between November’s election and January’s new Congress.

TD Cowen Washington Research Group’s Jaret Seiberg expressed pessimism about significant actions during this interim session. Lawmakers face time constraints, needing to prioritize funding for the government and the National Defense Authorization Act (NDAA).

Seiberg mentioned that stablecoin legislation could potentially pass in the best-case scenario. House Financial Services Committee Chair Patrick McHenry (R-N.C.) and Committee Democrat Maxine Waters (D-Calif.) have been collaborating on a regulatory framework for stablecoins since 2022. While the bill advanced last year, it stalled due to concerns, particularly from Waters, regarding a provision allowing state regulators to approve stablecoin issuances without Federal Reserve input.

However, Waters recently indicated that a deal might be on the horizon, emphasizing a desire for a “grand bargain” on stablecoins with McHenry during a congressional hearing.

“If leadership on both sides wants a deal, this is the package that is ready for action,” Seiberg noted.

Ohio Senate Race and Crypto

Millions are being invested in the Ohio Senate race, with Super PAC Fairshake pledging $12 million to unseat Sen. Sherrod Brown (D-Ohio), who has been critical of crypto. Brown is against Republican candidate Bernie Moreno, who is supported by the crypto community. According to FiveThirtyEight, polls show Brown leading with 47% to Moreno’s 44.3% as of Monday.

Seiberg questioned whether Brown would be inclined to support crypto legislation as a concession to the industry’s electoral efforts against him. In a worst-case scenario, Democrats could avoid rewarding crypto for its attempts to oust Brown, potentially delaying stablecoin and market structure legislation until 2026.