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A united government may make it easier for new crypto laws to be agreed upon, and to “follow the spirit of Biden’s executive order” in keeping the U.S. at the vanguard of innovation, Morgan Stanley (MS) said in a report Wednesday looking at the implications of midterm elections for the cryptocurrency sector.
According to the bank’s public policy analysts, legislation concerning tech regulation, cryptocurrency, pricing of prescription drugs, tax increases and China competition will have varying chances of passage by the end of 2023, depending on the outcome of the November elections.
Defining regulation for digital assets is important for the industry to grow, especially in relation to stablecoins, crypto products, institutional ownership of crypto, and the possibility of a central bank digital currency (CBDC), said the report authors.
An “extended period of uncertainty” on new legislation – as government agencies such as the U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and others fight for regulatory turf – would be a negative for the crypto industry, they added.
Policy makers in both the Democratic and Republican camps have shown frustration with current crypto regulation, arguing that stricter government oversight is needed to address a number of concerns, especially around consumer protection, the note says.
The cryptocurrency industry is having more influence on political views on both sides, with the Morgan Stanley report noting a large ramp up in lobbying spending last year.