U.S. Crypto Regulations Are Moving Against a CBDC and Non-Compliant Stablecoins Like Tether: JPMorgan

As a researcher with a background in finance and experience following the crypto market closely, I find JPMorgan’s recent report on U.S. crypto regulations to be insightful and relevant to current events. The bank’s analysis suggests that regulatory initiatives in the United States are moving against the launch of a central bank digital currency (CBDC), and may also hinder local banks from engaging with cryptocurrencies and stablecoins.

As an analyst, I’ve observed that U.S. regulatory trends appear to present challenges for the rollout of a central bank digital currency, discourage local banks from engaging with cryptocurrencies, and exhibit caution towards non-compliant stablecoins, according to JPMorgan’s latest research report.

In the past few months, the American banking sector has seen an increase in regulatory efforts concerning cryptocurrencies. This development raises intrigue about the potential regulatory stance towards crypto assets during the upcoming presidential election.

According to the report, the Clarity for Payment Stablecoins Act has a greater likelihood of getting adopted before the November election compared to three other proposals. If enacted, this legislation will strengthen U.S.-compliant stablecoins, but may jeopardize the influence of non-compliant ones like Tether.

A stablecoin refers to a specific category of digital currencies, which maintain a consistent value by being linked to the U.S. dollar or other assets like gold.

The Financial Innovation and Technology for the 21st Century Act (FIT21), recently passed in the House of Representatives, remains pending in the Senate and presidential approval. It’s doubtful this will occur before the upcoming election.

As a crypto investor, I’ve been keeping an eye on the recent development regarding the SAB 121 accounting rule. Exciting news came when Congress passed a resolution aimed at easing the restrictions for banks in custodying crypto assets. However, unfortunately, President Joe Biden vetoed this resolution. So, we’ll have to wait for further updates on this matter.

The Central Bank Digital Currency (CBDC) Privacy Protection Act aims to inhibit the launch of a U.S. CBDC by preventing Federal Reserve banks from providing specific services to consumers and utilizing a central bank digital currency for monetary policy purposes, according to the report. The House approved this bill restricting the Federal Reserve from introducing a CBDC last month; nevertheless, its likelihood of success in the Senate remains uncertain.