The key developments in crypto and U.S. legislation in 2024 include:
Continued regulatory uncertainty and a complex, messy landscape for crypto market participants in the U.S. Federal regulators like the CFTC, SEC, and banking regulators remain cautious about allowing crypto to integrate too closely with the traditional financial system. Legislative efforts to provide clarity and resolve the regulatory landscape have largely stalled.
2024 will be a defining year for decentralized finance (DeFi), as regulators increase their focus on perceived risks and challenges posed by DeFi. Regulators like the CFTC and SEC have taken enforcement actions against DeFi projects, while international bodies like FATF and IOSCO are seeking to coordinate policy responses. DeFi innovators will need to demonstrate that the space can be made compatible with regulation.
There will be increasing regulatory discussion around the potential convergence of crypto and artificial intelligence (AI) technologies. As innovators explore integrations between these fields, regulators will scrutinize the associated risks and issues, especially as more jurisdictions implement AI-specific regulatory frameworks like the EU's proposed AI Act.
The U.S. government has taken a more active role in crypto regulation, with the Biden administration's 2022 executive order outlining priorities like consumer protection, financial stability, and responsible innovation. This has led to various reports and policy recommendations from agencies like the Treasury and FSOC. However, the 2023 Economic Report of the President has taken a more critical stance on cryptocurrencies.
Congress has introduced several bills aimed at providing regulatory clarity for crypto, such as the Responsible Financial Innovation Act and the Toomey Stablecoin Bill, though their prospects for passage remain uncertain. Meanwhile, some states have taken a more proactive approach to crypto regulation.
In summary, the U.S. crypto regulatory landscape remains complex and evolving, with increased focus on DeFi, AI-crypto convergence, and ongoing efforts to develop a comprehensive federal regulatory framework, despite some legislative stalemate.