Congress has returned to session after the summer recess and arrives back to issues with crypto regulation and the US federal budget.
There are two major legislative deadlines on the table – the Infrastructure Investment and Jobs Act (IIJA) on September 27, and the subsequent federal budget on September 30.
The IIJA provides crypto regulation for the American market, requiring brokerage licenses for anyone who provides “any service effectuating transfers of digital assets on behalf of another person”.
The Democrats’ self-imposed timeline on the IIJA is likely to be pushed back to facilitate urgent budget discussions, thus creating enduring regulatory uncertainty that will most likely continue to affect the broader crypto market’s volatility.
The speed with which a decision is made breeds uncertainty within the market regardless. On the one hand, the market will not like having regulation (which has the potential to become even more stringent further down the line). Conversely, the looming fear of regulation without confirmation stops the market from being able to manage its response.
This confusion has the potential to linger on for some time because the legislative timetable for the budget is more important.
It appears increasingly likely that an interim federal budget will be completed imminently, after which, Congress will attempt to pass the delayed IIJA and provide the clarity that the market has long desired.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.