Federal Reserve Board member Christopher Waller said the process regarding cryptocurrency regulation has reached a deadlock in Congress.
“The Cryptocurrency Enthusiasm That Grew After Donald Trump Is Fading”
Waller stated that political and institutional disagreements have been particularly decisive in the progress of comprehensive regulations concerning market structure.
Waller stated that he hoped the Fed’s previously proposed “Skinny Accounts” model of limited digital accounts could preempt potential legal disputes, but that no concrete progress had been made in this direction. He also noted that the euphoria in the crypto markets following Donald Trump’s re-election had begun to wane recently.
Market structure regulation, a long-standing priority for the crypto industry, includes contentious issues such as the sharing of supervisory authority among different federal agencies, how tokens should be classified, and which assets should be regulated under what framework. This area also laid the groundwork for lawsuits filed under previous administrations that challenged the sector.
The sector achieved a significant milestone during the summer, overcoming a critical regulatory hurdle with the passage of the Genius Act, which establishes a regulatory framework for dollar-backed stablecoins. However, regulations concerning market structure have become more complex, particularly due to objections from the banking lobby to provisions allowing stablecoin holders to receive interest-like returns.
*This is not investment advice.