With Congress set to reconvene following the upcoming US elections, cryptocurrency legislation is expected to regain momentum after a long campaign hiatus.
Ron Hammond, Director of Government Relations at the Blockchain Association, outlined key developments and the challenges lawmakers face as they reconvene.
Post-Election Rush for Crypto Regulation
Congress has been on a campaign hiatus for the past month, stalling crypto-related legislative work. Hammond noted that this period of inactivity will end after the election. However, with only five weeks left in the session, finalization of the election results could play a critical role in shaping the agenda for the sluggish session.
“If the election results are not final by the time Congress returns, that could derail a lot of plans,” Hammond warned, noting that the packed legislative agenda includes financing bills, defense and agriculture bills, disaster relief, and possibly stablecoin regulation.
Stablecoin Regulation: A Tight Timeline
Hammond noted that there is bipartisan momentum to pass stablecoin legislation, but there is still no final deal on the table. He added that if the legislation does not pass this year, there will still be optimism for 2025.
“The election results will set the stage for what’s possible during a sluggish session. If stablecoins don’t cross the finish line this year, it will likely be because of political factors or time running out,” he said, referencing a similar situation two years ago when stablecoin legislation was on the table. A key development in October included Senator Bill Hagerty’s release of a stablecoin discussion draft that Hammond cited as a key talking point among House leaders.
Hagerty is rumored to be Donald Trump’s nominee for Treasury Secretary if he wins the election, highlighting the potential for future stablecoin policy changes.
Tether and Broader Market Concerns
Hammond also addressed recent concerns surrounding Tether following a Wall Street Journal report of a possible investigation by New York authorities. Tether’s CEO has denied the allegations, but Hammond suggested it was an important issue to watch, especially given Howard Lutnick’s role in the Trump campaign and Cantor Fitzgerald’s influence over Tether.
Confidence in Pro-Crypto Congress
Looking beyond 2024, Hammond expressed confidence in an emerging “pro-crypto Congress.” He pointed to the high success rate of pro-crypto candidates from both parties during the primaries, with some races featuring pro-crypto candidates from both the Democratic and Republican parties.
“As Politico noted last week, next year’s Congress will be the most ‘pro-crypto Congress’ yet,” he said. This shift suggests a stronger likelihood of stablecoin legislation passing, even if it doesn’t happen in 2024.
Broader Cryptocurrency Regulation on the Horizon
Hammond noted that crypto legislation will not be limited to stablecoins in 2025. A major tax bill is likely to include provisions related to cryptocurrencies, and there is also a push to finalize market structure and NFT regulation. Decentralized finance (DeFi) is also expected to become more of a focus.
*This is not investment advice.