Regulation
Stablecoin bill could be passed before election, JPMorgan says
Photo: Mike Segar (Reuters)
The stablecoin bill will likely be passed before the presidential election and poses a threat to Tether’s dominance. according to JPMorgan, as reported by CoinDesk. Additionally, the Federal Reserve is now less likely to issue a central bank digital currency after a House bill last month banned the central bank from doing so. according to the report.
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In light of the current state of crypto regulations in the United States, JPMorgan has shared its report on what may happen in the near future. Analyst Nikolaos Panigirtzoglou and his team reported that the new regulatory measures appear to oppose the Federal Reserve’s development of a central bank digital currency (CBDC), for CoinDesk.
According to the investment bank, regulators may favor US-compliant stablecoins, potentially reducing the dominance of non-compliant stablecoins, such as Tether, the largest stablecoin, as reported by CoinDesk. In particular, stablecoins – the type of cryptocurrencies pegged to assets or fiat currencies – have faced scrutiny from regulators over their functionality.
Analysts said the stablecoin bill, dubbed the “Clarity for Payment Stablecoins Act,” has the potential to be passed before the 2024 presidential election. Additionally, the bank said U.S. banks would be discouraged from involvement in the cryptocurrencies, according to the report. JP Morgan did not immediately respond to Quartz’s request for comment on the reported analysis.
Last month, the House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21), which now must be approved by the Senate and the president. This is unlikely to happen before the elections according to the bank.