Incoming Crypto Regulations in the U.S.

Incoming Crypto Regulations in the U.S. Could Be a Green Light for Institutional Investors

In Brief

• A regulatory crypto framework could spark a green light for institutions.
• Nasdaq waiting on regulations before launching a crypto exchange.
• U.S. government has urged Congress to speed up its progress on crypto regulations.
  

The crypto world appears to be waiting with bated breath for policymakers in the United States to finally roll out a comprehensive regulatory framework.

The long-awaited deployment of crypto regulations in the U.S. could be the catalyst to drive the next wave of institutional adoption. Financial institutions have so far been wary of the asset class due to regulatory uncertainty, especially in America.

However, when Congress can finally agree on how to approach digital assets without completely crushing innovation, it could provide the green light for the bigger players in the world of finance and investment.

Nasdaq waiting on the sideline
One of those big players is the American multinational financial services corporation and owner and operator of three stock exchanges, Nasdaq Inc.

On Oct. 5, Bloomberg reported that Nasdaq is waiting for greater regulatory clarity regarding crypto exchanges before it launches its own one. Executive vice president and head of North American markets, Tal Cohen, told the outlet that “those are discussions we are happy to have” with regards to expanding its digital asset services.

He added that the market is “fairly saturated” on the retail side, so the firm will remain focused on its crypto custody services which still have “massive demand and opportinuty.” Hinting at further expansion, he added:“We think if you can safe-keep peoples’ assets, they’ll trust you to do everything else afterwards.”

In addition to custody services, Nasdaq will also work on building capabilities to facilitate the movement and transfer of crypto assets. Last month, Nasdaq hired the former head of prime broker services at Gemini, Ira Auerbach, to lead its new digital assets unit. This unit will begin by offering institutional custody services for Bitcoin and Ethereum.

CryptoQuant CEO Ki Young Ju also thinks institutions will drive the next market rally showing a chart that indicates potential strong entry points for institutional investors.

Biden urges crypto acceleration
Back to Uncle Sam’s regulations; earlier this week, the Biden administration urged Congress to accelerate the deployment of a regulatory framework.

A U.S. Financial Stability Oversight Council (FSOC) report urged lawmakers to come to an agreement and work on inter-agency cooperation. The group, led by Treasury Secretary Janet Yellen, recommends pushing two leading crypto regulation efforts. The first is a bill that establishes rules for stablecoin issuers, and the second is legislation putting the Commodity Futures Trading Commission (CFTC) in charge of overseeing crypto spot markets.

If passed, both sets of laws would be beneficial for institutional and retail adoption, and it is only a matter of time until something solid is on the table.

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