As we enter 2024, the crypto industry is still suffering from the U.S. government’s hostility and incompetence. The regulators have failed to provide clear and consistent cryptocurrency regulation, leaving the sector in a state of uncertainty and confusion. The U.S. is lagging behind Europe and other regions, especially in Southeast Asia, where crypto regulations are more progressive and supportive.
Every year, the crypto community hopes for a breakthrough in its relationship with U.S. authorities. But this hope is always dashed by the government’s inertia and indifference. The industry is ignored by the Presidential candidates, who only offer vague and unrealistic policy proposals and tax plans. The only bright spots are the state-level initiatives, where some governors and lawmakers are taking bold steps to enact meaningful digital asset regulations.
This contrast highlights the sector’s main problem: a dysfunctional Congress that can’t even agree on keeping the government running. The prospects for crypto legislation are dim, especially in the House of Representatives, where lawmakers from both parties claim to support crypto bills but fail to deliver any results. One such bill is the one to regulate U.S. stablecoin issuers, which has been stalled for months.
The Senate Democrats are even worse, as they only criticize and demonize crypto without offering any solutions. They are unlikely to change their stance in 2024, a presidential election year when political bickering reaches its climax, and risk alienating their voters with controversial legislation.
Cryptocurrency Regulation Could Get Worse Without its Chief Supporter
The situation is further worsened by the imminent departure of the most influential crypto supporter in Congress, Rep. Patrick McHenry, who was the former chairman of the House Financial Services Committee. His exit raises doubts about the fate of the bills he has been championing.
While waiting for new laws, the industry leaders’ only hope is that they’ll get spot bitcoin exchange-traded funds (ETFs) in early 2024. This decision from the U.S. Securities and Exchange Commission (SEC) would create highly liquid, regulated funds on exchanges, a convenient way to invest in crypto and attract more capital. But this is a small consolation, given the legal battles that the SEC is waging against the industry.
The SEC is suing Coinbase, Binance, and recently, Kraken, accusing them of operating illegal, unregistered exchanges. The core of these disputes is whether the tokens traded on these platforms are securities. Ripple General Counsel Stu Alderoty predicted that the regulator will keep losing in court, setting the stage for a showdown in the Supreme Court.
In conclusion, the crypto industry is still facing a regulatory nightmare in 2024. The U.S. government’s relationship with the sector is likely to see some major developments, but the rules of the road are likely to remain largely undefined.