KEY POINTS
- TD Cowen analysts believe the optimism over crypto bills passing soon is 'misplaced'
- They noted that regardless of the election, both parties will want more donations before 'delivering'
- Crypto corporations spent nearly $120 million so far in a bid to back 'pro-crypto' candidates
The cryptocurrency community has long been urging the U.S. government to draw up legislation dedicated to the industry for clarity and compliance, especially amid back-and-forth legal battles between the U.S. Securities and Exchange Commission (SEC) and crypto firms.
For investment bank TD Cowen, optimism around crypto-centric bills getting passed in Congress may be unfounded. The industry has, for years, been lobbying for clear regulations, and recent shifts among some Republican and Democratic policymakers has sparked hopes for legislation to come around soon.
The Increased Risk of a Deadlock on 2 Bills
However, TD Cowen analysts said in a Monday note that passing bills on crypto market structure and other related regulations will take time.
They went on to note that there is increased risk of a deadlock over the bipartisan bill that seeks to provide more regulatory clarity for digital assets. The said proposed legislation was backed by some Democrats – deemed a surprise move by some in the crypto space considering the Biden administration's "hostility" toward the sector.
Another crypto bill, put forward by Sen. Stabenow, D-Mich., and Sen. John Boozman, R-Ark., back in 2022, has yet to get a vote.
"We view optimism as misplaced as we believe prospects are dropping for votes this year on either bill. And there is a growing risk the bills could get stuck politically next year," wrote Jaret Seiberg, TD Cowen's managing director of the Washington Research Group.
"We also are skeptical about next year regardless of the election. It is because both parties will want to extract more contributions before they finally deliver for [the] industry," he added.
Crypto Cashes In for Its Voice to be Heard
A recent report by watchdog group the Public Citizen revealed that crypto corporations have spent over $119 million so far as part of the efforts to unseat so-called "anti-crypto" candidates and help pro-crypto politicians win seats in Congress.
Among the most notable donations so far in this year's campaigns came from the Winklevoss twins of crypto exchange Gemini. Tyler and Cameron each donated $1 million in Bitcoin to ex-President Donald Trump's presidential bid.
Seiberg noted that even with crypto firms "aggressively making political contributions," TD Cowen analysts don't see digital asset-related bills getting more priority in Congress anytime soon.
📺U.S. MAJORITY LEADER OF THE SENATE @SenSchumer COMMITS TO PASSING SENSIBLE CRYPTO LEGISLATION BY THE END OF THE YEAR 👀#crypto #bitcoin pic.twitter.com/SRlYx5fg9G
— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) August 15, 2024
Senate Majority Leader Chuck Schumer did say that it is possible for crypto legislation to be passed by the end of the year. On the other hand, it can be worth noting that the government may have other priorities at this time, especially with economic headwinds looming and the November elections less than three months away.
