TD Cowen: Progress on Crypto Legislation Stalled by Multiple Controversies Beyond Stablecoin Yields

On April 23, investment bank TD Cowen stated that the disagreements surrounding the CLARITY Act extend far beyond the issue of stablecoin yields, with multiple real-world obstacles potentially slowing down the legislative process. Firstly, the Commodity Futures Trading Commission is understaffed, currently having only one commissioner in office. In this situation, Congress may be hesitant to assign more crypto regulatory responsibilities to the agency, and filling the vacancies will take several months. Secondly, the issue of prediction markets is heating up. Whether to include it in the bill’s regulations, along with potential insider trading and conflicts of interest (including controversies related to Trump-associated projects), may lead some Democratic lawmakers to oppose the bill. Additionally, the ongoing controversy surrounding the Trump family’s crypto project, World Liberty Financial, is increasing the political sensitivity of the bill, making bipartisan consensus harder to achieve. Geopolitics has also become a variable. Discussions about Iran potentially using crypto payments are intensifying the focus on anti-money laundering provisions and could even introduce amendments that would be detrimental to the industry. Furthermore, some lawmakers are attempting to incorporate the Credit Card Competition Act into the legislation, which, if advanced, could trigger new conflicts of interest and further delay the overall legislative process.