Grayscale: "Cryptocurrency Bill Loses Momentum if No Progress Before July"

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Grayscale evaluated the U.S. cryptocurrency market structure bill as a key regulatory framework that will open the next growth phase for the digital asset market. This analysis suggests that the U.S. cryptocurrency regulatory environment, which has been enforcement-centric, could transition to clear legal standards and oversight systems.

Bitcoin.com reported on May 10 (local time) that Zach Pandl, Grayscale's Head of Research, explained the significance of the U.S. cryptocurrency market structure bill, stating that it could create clearer rules for the oversight of the digital asset market. Pandl characterized the bill not merely as a policy amendment but as a comprehensive market structure bill.

According to Grayscale, the U.S. cryptocurrency market structure bill focuses on clarifying which federal regulatory agency supervises which activities. The bill proposes a system that distinguishes between investment contracts and digital commodities, with investment contracts supervised by the U.S. Securities and Exchange Commission (SEC) and digital commodities by the U.S. Commodity Futures Trading Commission (CFTC).

Pandl emphasized the bill's importance given that digital asset regulation over the past decade has been shaped more by enforcement actions than by formal rulemaking. He pointed out that under enforcement-centric regulation, tens of billions of dollars in fines have been imposed, and many potential participants have been reluctant to enter the cryptocurrency market due to concerns about regulatory retaliation, even as the market grew to trillions of dollars.

Grayscale expects the bill to have a broad impact on developers, investors, exchanges, brokers, custodians, and asset issuers. Developers could gain clearer guidance on project structure and launch methods, while investors could reduce legal uncertainties surrounding their holdings and project outlooks. Exchanges, brokers, and custodians could also secure clearer registration pathways.

For asset issuers, token distribution and ongoing compliance requirements could also become clearer. Grayscale assessed that regulatory agencies could also operate within a clearer legal framework instead of relying on fragmented enforcement decisions. This was presented as a key factor in reducing overall uncertainty in the digital asset market.

Pressure from the industry and the public is also growing amid Senate discussions. Stand With Crypto delivered a petition with over 28,000 signatures to Washington on April 30, urging consideration of the U.S. cryptocurrency market structure bill. In a survey released on May 7, 52% of respondents supported the bill after reviewing a neutral summary, and 70% said the U.S. should have already passed clear cryptocurrency legislation.

The Senate Banking Committee is scheduled to hold a meeting on May 14 to review the U.S. cryptocurrency market structure bill. Pandl assessed that this bill could foster the next phase of innovation and capital formation in digital assets by replacing uncertainty with structure and providing developers, businesses, and investors with a long-awaited asset and regulatory legal framework.

However, the passage of the bill is not yet confirmed. Pandl mentioned that Polymarket probabilities suggest a 67% chance of the U.S. cryptocurrency market structure bill passing by 2026. The bill must pass the Senate Banking Committee, then a full Senate vote and bicameral approval, and Grayscale believes significant progress before the July recess is crucial to maintaining momentum.

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