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- Experts at Bernstein forecast that cryptocurrency regulation is imminent.
- They suggest that a Trump re-election would benefit cryptocurrency policies.
According to Bernstein experts, the probability of new cryptocurrency legislation by 2025 has increased to 70%.
The experts remarked in a report: “A major transformation is in progress that will significantly bolster cryptocurrency and may provide unprecedented momentum for the sector.”
Bernstein pointed out that President Donald Trump, the Republican dominance in the Senate, lawmakers advocating for essential committee backing for cryptocurrency, and some supportive appointments have facilitated the path for new cryptocurrency legislation.
In the report, Bernstein emphasized several proposals aimed at delivering the regulatory clarity that the crypto sector has long desired.
Here are 10 proposals that Bernstein believes could influence as they slowly progress through the political landscape in Washington, D.C.
Payment Stablecoin Proposal
Bernstein evaluates the likelihood of the payment stablecoin proposal passing at 70%.
This proposal is based on the “Payment Stablecoin Transparency Act,” initially presented in 2023 by former Republican Congressman Patrick McHenry.
Republican Senator Cynthia Lummis put forward a payment stablecoin proposal in 2024, which encompasses many of the same elements as its predecessor.
The legislation bans algorithmic stablecoins and mandates that these tokens be issued in the U.S., supported one-to-one by government bonds, cash, and central reserves.
GENIUS Act
The GENIUS Act, which directs and establishes national innovation for U.S. stablecoins, is the most recent piece of cryptocurrency-related legislation.
Bernstein stated: “We estimate there is a 70% chance this proposal will succeed in the forthcoming congressional session.”
The bipartisan legislation was presented in February by Senators Lummis, Bill Hagerty, Kirsten Gillibrand, and Tim Scott.
This legislation requires that stablecoins be entirely supported by reserves, akin to the payment stablecoin regulations, yet it takes a more adaptable stance concerning these reserves, which includes a stipulation for research on algorithmic stablecoins.
Senator Elizabeth Warren remarked this week that the legislation is deficient in adequate provisions for anti-money laundering and consumer protection, which hinders her from endorsing it.
**FIT21**
The Financial Innovation and Technology Act for the 21st Century (FIT21) was approved by the House in May and is currently pending Senate evaluation. This legislation was proposed by Republican Representative Glenn Thompson in 2023 and has received bipartisan backing. Its purpose is to set guidelines on how the Securities and Exchange Commission and the Commodity Futures Trading Commission oversee cryptocurrencies.
While Bernstein labeled it as a “significant bill,” analysts have yet to evaluate its chances of approval.
**RFIA** Bitcoin’s Million-Dollar Possibility: Samson Mow Underscores Important Variances from Gold
Bernstein also brought up another “significant bill,” the Responsible Financial Innovation Act (RFIA). Lummis and Gillibrand initially presented RFIA in 2022 and reintroduced it in 2023. Bernstein characterized it as “the most thorough regulation aimed at tackling the broader integration of digital assets with U.S. financial systems,” assigning it a 50% probability of passing. Nevertheless, the bill introduced in the 118th Congress is deemed “inactive” and needs to be reintroduced. RFIA has not been resubmitted in the 119th Congress.
**Stablecoin Transparency Act**
Hagerty put forward the Stablecoin Transparency Act in 2022 and reintroduced it at the start of the 119th Congress.
Should the legislation be approved, it Bitcoin Requisition Decreases: Which Way Will the Marketplace Head Next? necessitate that stablecoins be supported by fiat currency, government securities, or fully secured repurchase agreements, and it requires issuers to release reserve updates on a monthly basis. Bernstein assesses the likelihood of its approval at 30%.
National Distributed Ledger Technology Research and Development Strategy Act
Senators Roger Wicker and Cynthia Lummis initially presented the National Distributed Ledger Technology Research and Development Strategy Act in 2022. The objective of this bill is to ‘create a national blockchain research and development strategy’ and to assist in pinpointing areas where the U.S. government can encourage its utilization. Although the legislation has not been reintroduced in the ongoing Congress, Bernstein estimates its probability of approval at 10%.
Cooperative Efforts to Prevent Illicit Financing Act
Representatives Haggerty and Lummis introduced the Cooperative Efforts to Prevent Illicit Financing Act in 2024. This legislation seeks to initiate a pilot program for information exchange between the private sector and the Department of Justice, the Financial Crimes Enforcement Network, and the Department of Homeland Security. ‘By fostering cooperation and information exchange, this bill will guarantee that all involved parties collaborate to identify and address wrongdoers,’ Haggerty remarked in a statement. Bernstein predicts its chances of approval at 10%.
Keeping American Innovation Act
The Keeping American Innovation Act is another initiative from Mike McHenry. He put forth this bill in 2023 to revise the definitions of brokers and digital assets, along with their reporting obligations, in the Infrastructure Investment and Jobs Act. Bernstein estimates the probability of its approval at 10%.
Bitcoin Bill
Ramis has also advocated for the “Innovation, Technology, and Competitiveness Act through Optimizing National Investment,” commonly known as the Bitcoin Legislation.
She presented this proposal in July with the intention of creating a strategic Bitcoin reserve as an extra asset to enhance the U.S. financial standing.
Following Trump’s triumph on November 5, Ramis conveyed her enthusiasm, tweeting: “We will create a strategic Bitcoin reserve.”
Bernstein estimates the probability of the legislation passing at 5%, but did not provide further details on why he still views the odds as so low, despite the fact that the bill has not been reintroduced.
Nevertheless, Trump called for an evaluation of digital asset reserves in a cryptocurrency-oriented executive directive released at the end of January. Ethereum to detonate? XYZVerse resists economic stress with robust buying capability
Digital Asset Anti-Money Laundering Legislation
Warren presented the Digital Asset Anti-Money Laundering Legislation in 2023.
The legislation aims to broaden current anti-money laundering obligations to digital asset providers and facilitators.
It also intends to categorize most cryptocurrency platforms and initiatives as financial entities.
Reportedly, Warren encountered difficulties in securing co-sponsors for the legislation. It has not been reintroduced, and Bernstein evaluates its likelihood of passage at 5%.
Andrew Flanagan is a market journalist for DL News. If you have insights, please reach out to [email protected].
