June 10, 2024
By Anjali Kochhar
JPMorgan has called attention to a major change in U.S. crypto rules, citing a move away from the issuing of non-compliant stablecoins like Tether and central bank digital currencies (CBDCs). As to the latest assessment from the bank, there is a strong probability that the Clarity for Payment Stablecoins Act would be passed before the U.S. presidential election, which might provide a challenge to Tether’s market leadership.
Regulatory initiatives in the U.S. have intensified over the past few months, raising questions about the future direction of crypto regulation. Analysts led by Nikolaos Panigirtzoglou noted that these emerging initiatives seem to be “against a Fed coin, against U.S. banks engaging with crypto, against non-compliant stablecoins such as Tether (USDT), and against a blanket classification of all tokens outside Bitcoin (BTC) and Ethereum (ETH) as securities.”
The Clarity for Payment Stablecoins Act, if approved, would bolster U.S.-compliant stablecoins but could undermine non-compliant ones like Tether. This bill’s approval is considered more likely than three other regulatory initiatives currently under consideration. A stablecoin is a type of cryptocurrency that is usually pegged to the U.S. dollar, although other currencies and assets, such as gold, can also be used.
Furthermore, the Financial Innovation and Technology for the 21st Century Act (FIT21), which was passed by the House of Representatives last month, still needs approval from the Senate and the president. JPMorgan suggests this is unlikely to happen before the election.
Additionally, Congress passed a resolution to overturn the SAB 121 accounting rule, which made it harder for banks to custody crypto assets. However, this resolution was vetoed by President Joe Biden.
The Central Bank Digital Currency (CBDC) Anti-Surveillance State Act, designed to block a U.S. CBDC, prevents Federal Reserve banks from offering certain products to consumers and from using a CBDC for monetary policy. The House passed the bill last month, but its prospects in the Senate are unclear.
As the U.S. moves towards tighter crypto regulations, the potential impact on non-compliant stablecoins and the future of CBDCs remains a critical area to watch.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
