White House report adds 1 more hurdle to stablecoin bill

A new White House report on stablecoins is unlikely to clear the path for a US crypto bill and may add at least 1 more hurdle, according to a TD Cowen analysis.

"We now see an even tougher path for crypto legislation," the investment bank's policy analysts said in a note, dampening hopes that the report would provide regulatory clarity.

The White House report focused on the administration's existing authorities and principles for financial stability. This signals a preference for leveraging current regulatory frameworks over creating new ones, a stance that could create friction with legislative efforts to build a bespoke crypto framework.

The analysis implies that the road to a clear legal framework for stablecoins in the US remains long. This continued regulatory uncertainty could delay institutional investment and hinder the growth of US-based stablecoin issuers, potentially ceding ground to issuers in jurisdictions with clearer rules like Europe's MiCA framework.

The core issue identified by TD Cowen is a fundamental disagreement on the regulatory approach. While lawmakers have been working on a specific bill to govern stablecoins, the White House's report suggests the administration may favor a more enforcement-led strategy using existing bodies like the SEC and Treasury.

This divergence complicates the outlook for any comprehensive stablecoin legislation passing in the near term. For digital asset markets, the lack of a clear US regulatory perimeter for stablecoins—which represent over $150 billion in market value—remains a significant headwind.

The delay contrasts with progress in other major financial centers. The European Union's Markets in Crypto-Assets (MiCA) regulation is set to provide a clear licensing regime for stablecoin issuers, potentially attracting projects and investment away from the US.

This article is for informational purposes only and does not constitute investment advice.