Time's Running Out for Clarity on Crypto Legislation

The crypto market structure bill has seen minimal public progress over the past month, making its prognosis challenging. However, it's evident that time is of the essence for its passage. This newsletter, State of Crypto, explores the intersection of cryptocurrency and government - sign up for future editions here. The narrative suggests that the crypto market structure bill won't be passed this month, but this doesn't mark the end of the process. Instead, it's approaching a critical timeline that may lead to increased uncertainty. Much of the recent activity around market structure issues, such as statements from the Securities and Exchange Commission staff, lacks permanence. The SEC has time to establish rules through a notice-and-comment period, but this will take time. The market structure legislation aimed to solidify crypto industry goals and regulations into law, making it more challenging for future administrations to undo these rules. Without the Clarity Act, it's possible that the same conversation will resurface in a few years. Memorial Day, May 25, has been considered a "drop-dead" date for legislation to advance since last December. As summer approaches, lawmakers will focus on their campaigns, leaving little time for crypto legislation. Before Congress leaves, they will address a bill to fund the Department of Homeland Security and consider Kevin Warsh's potential appointment as the next Fed chair. The crypto industry is eager for this bill, with over 100 companies signing an open letter urging a markup hearing in the Senate Banking Committee. However, it's unclear how close the committee is to moving forward. Even when outstanding issues are resolved, the House will need to vote again on the bill. Congressman French Hill believes that many issues around sales practices for stablecoins and decentralized finance have been resolved by the House, making it easier for the Senate to find common ground.