US election result will likely lead to better crypto regulation: S&P analysts
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The outcome of the 2024 U.S. elections, which saw Republicans taking control of the White House, Senate, and Congress, could significantly reshape the regulatory landscape for cryptocurrency in the country, according to S&P analysts. According to a recent S&P Global report shared with crypto.news, this political shift may transition the U.S. approach to crypto regulation from enforcement-led measures to a more predictable rule-making framework. The U.S. has trailed other major markets in advancing regulatory clarity for digital assets. Regions like Europe have introduced structured frameworks for stablecoins and other crypto activities. Stablecoins, a type of cryptocurrency tied to fiat currencies like the U.S. dollar, are essential for enabling blockchain-based payments beyond crypto markets. In the U.S., however, companies risk enforcement actions over unclear definitions of securities, leading to fines and legal disputes. The lack of clarity also affects staking — a process where investors lock their crypto assets to earn rewards. While some firms have stopped offering staking services due to regulatory pressure, others are challenging these restrictions in court. “Crypto companies in the U.S. risk fines and enforcement actions relating to the listing of unregistered securities. This is due to the absence of regulatory clarity on which crypto assets are securities,” wrote the analysts. Upcoming legislation The analysts from S&P indicated in their note that regulatory changes regarding stablecoins and crypto asset custody may be expected in early 2025. Additionally, custody services for crypto assets face significant challenges due to existing regulations like the SEC’s Special Accounting Bulletin – SAB 121. This regulation mandates that entities holding crypto assets on behalf of clients must report these assets as liabilities, making crypto custody expensive for U.S. banks. Although a proposed repeal of SAB 121 was vetoed earlier this year, the new administration might reconsider this issue, potentially paving the way…
Filed under: News - @ November 20, 2024 10:24 pm