Delays in advancing US cryptocurrency bills create short-term regulatory uncertainty, which may lead to increased market volatility.
Political Factors Behind Delays
House Speaker Mike Johnson and President Donald Trump are leading the charge for U.S. crypto legislation. However, Republican hard-liners have blocked a procedural rule, stalling progress. Approximately a dozen Republicans, along with Democrats, blocked the procedural vote to merge the bills into a comprehensive package. Chairman French Hill remains a prominent figure steering market structure discussions in the House.
Impact on Stablecoins
The failure to pass the GENIUS Act, which mandates U.S. stablecoins be fully backed, contributes to regulatory uncertainty. This could impact major stablecoins like USDC and USDT, and potentially influence BTC and ETH prices.
Historical Perspective on Market Volatility
While immediate market reactions are evident, no concrete numbers on institutional allocations are available. Past procedural failures led to similar market shifts, affecting price stability in the U.S. crypto scene. Stablecoin regulations, if passed, underscore the potential for changes in industry practices. The current legislative pause continues earlier trends, with regulatory opacity likely persisting. Historical data suggest market volatility increases amid legislative delays.
Delays in the legislative process for cryptocurrency in the U.S. could have significant consequences for stablecoins and overall market stability. The continued regulatory uncertainty is likely to contribute to future volatility.
