According to S&P analysts, the outcome of the 2024 US elections, which saw Republicans take control of the White House, Senate and Congress, could significantly reshape the regulatory landscape for cryptocurrencies in the country.
According to a recent S&P Global report shared with crypto.news, this policy shift could shift the U.S. approach to crypto regulation from enforcement-focused measures to a more predictable rule-making framework.
The United States lags behind other major markets in regulatory clarity for digital assets. Regions like Europe have introduced structured frameworks for stablecoins and other crypto activities.
Stablecoins, a type of cryptocurrency linked to fiat currencies like the US dollar, are key to enabling blockchain-based payments beyond crypto markets.
In the United States, however, companies risk lawsuits over unclear title definitions, leading to fines and legal disputes. The lack of clarity also affects staking – a process by which investors lock up their crypto assets to earn rewards. While some companies have stopped offering staking services due to regulatory pressure, others are challenging these restrictions in court.
“Crypto companies in the United States risk fines and enforcement actions related to listing unregistered securities. This is due to the lack of regulatory clarity regarding which crypto assets are securities,” the analysts wrote.
Upcoming legislation
S&P analysts indicated in their note that regulatory changes regarding stablecoins and crypto asset custody could be expected in early 2025.
Additionally, crypto custody services face significant challenges due to existing regulations such as the SEC’s Special Accounting Bulletin – SAB 121. This regulation requires entities holding crypto assets on behalf of clients to reporting these assets as liabilities, making crypto custody costly for U.S. banks. .
Although a proposed repeal of SAB 121 was vetoed earlier this year, the new administration may reconsider this issue, paving the way for greater market participation.
Bitcoin reserve?
One of the most ambitious proposals comes from Senator Cynthia Lummis, who suggests that the Federal Reserve should acquire 1 million Bitcoin (BTC) over the next five years, or about 5% of the total Bitcoin supply. Supporters argue that this could protect against currency depreciation and manage the national debt, while critics question the feasibility and implications of such a move.
Even if the bill does not pass, analysts say the discourse around Bitcoin is changing, with increased attention paid to its role in traditional financial markets. These discussions could encourage other countries to consider similar measures, further influencing the global adoption of Bitcoin, according to the note.
Global coordination: It’s time for the United States to catch up
Beyond domestic concerns, S&P notes that the lack of U.S. involvement in global regulatory coordination has hampered blockchain innovation in financial markets. Greater U.S. participation could help expand existing blockchain use cases, both domestically and internationally.
“We believe that stronger U.S. involvement could allow already well-tested use cases to scale commercially, both domestically and internationally,” the analysts write.
As the United States enters a period of potential regulatory transformation, market participants await the next steps from lawmakers. According to S&P, developments in the regulatory framework could provide much-needed clarity and open new doors for innovation and growth in the digital assets space.
