Time's Running Out for Crypto Clarity

The cryptocurrency market structure bill has seen little public progress over the past month. While predicting the bill's fate is challenging, it's clear that time is running out for its passage. This newsletter, State of Crypto, explores the intersection of cryptocurrency and government - sign up for future editions here. The crypto market structure bill is unlikely to be passed this month, but this doesn't mark the end of the process. However, the timeline is becoming increasingly tight, and the pressure is mounting. Much of the recent activity surrounding market structure issues, such as statements from the Securities and Exchange Commission staff, is not permanent guidance. The SEC has time to develop rules that will go through a notice-and-comment period, but this will take time. The market structure legislation aimed to cement crypto industry goals and regulations into law, making it more difficult for future administrations to undo these rules. Without the Clarity Act, it's possible that we'll be having this same conversation in a few years. Memorial Day, May 25, has been seen as a "drop-dead" date for legislation to advance since last December. As summer approaches, lawmakers will leave town to focus on their campaigns, leaving little time for a crypto bill. Before Congress leaves, they will need to pass a bill to fund the Department of Homeland Security and decide on the next Fed chair. The crypto industry is eagerly awaiting 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, with stablecoin yield dominating the conversation and other issues still unresolved. Even when these issues are resolved, the House will need to vote again on the bill. According to Congressman French Hill, many of the outstanding issues around sales practices for stablecoins and decentralized finance have already been addressed by the House in its version of the bill, making it easier for the Senate to find common ground.