There might be as many opinions about crypto as there are cryptocurrency tokens. And with tens of thousands of digital assets populating the crypto market, that’s certainly a lot of opinions.
That sheer scale of noise is in part why it can be so challenging to get a clear view of the Web3 landscape — something that holds true for regulators, retail investors, consumers and businesses alike.
This, as the regulatory environment surrounding cryptocurrencies is becoming increasingly complex within the U.S., with the House of Representatives voting Wednesday (May 8) to approve a resolution rejecting U.S. Securities and Exchange Commission (SEC) cryptocurrency accounting guidance alleged to have deterred banks from handling crypto customers.
Almost immediately, President Biden released a statement saying that he would veto the resolution if it made it so far as to reach his desk.
“The Administration strongly opposes passage of H.J. Res. 109, which would disrupt the SEC’s work to protect investors in crypto-asset markets and to safeguard the broader financial system … as explained in staff’s accompanying release, SAB 121 was issued in response to demonstrated technological, legal, and regulatory risks that have caused substantial losses to consumers,” said the Executive Office of the President in a Wednesday statement.
“If the President were presented with H.J. Res. 109, he would veto it,” the release concluded.
“If you want Americans to be able to engage with digital assets safely and securely, banks — which are some of the most regulated businesses in our country — are probably the best way,” Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Committee, said in response.
Read more: This Week in Web3: Wells Notices, Crypto Payments and Usability
Still, amid regulatory and political developments, crypto still has its prominent adherents. One of whom is Block Chairman and Co-founder Jack Dorsey, a leading figure in the payments industry, who has made the bold prediction that bitcoin’s price could reach $1 million by 2030. As PYMNTS reported, Block’s existing $200 million investment in bitcoin grew by around 160% during the company’s most recent financial quarter, $573 million.
All that’s to say that Dorsey may not be the most objective source when discussing the growth of a currency with no backing. His optimistic forecast is in part based on the belief that Bitcoin will play a crucial role in the future of finance, serving as the “internet’s native currency.”
And, of course, for bitcoin — or any crypto asset — to reach such a valuation, the regulatory stars will need to align. A situation that continues to look unlikely, at least in the U.S.
For example, Web3 company Ripple is running into fresh SEC trouble following the April announcement of its own dollar-pegged stablecoin, as the company moves forward with its plan to expand its payments business in the U.S.
In a Tuesday (May 7) filing, the SEC wrote, “Ripple’s primary business continues to be, as it has been since 2013, unregistered sales of XRP. It also plans to issue a new unregistered crypto asset,” arguing that Ripple has built its Web3 business by leveraging the sale of unregistered securities, and that the stablecoin project can be painted with the same brush, too.
Read more: What CFOs Should Know About the Growing Use of Stablecoins
Still, in today’s post-bitcoin-ETF landscape, crypto is working hard on making further inroads into the traditional financial sector.
“Big banks and financial institutions are much more interested today than they certainly were five or six years ago, when we rolled out some products for the first time,” Brooks Entwistle, senior VP of global customer success and managing director at Ripple, told PYMNTS this fall. “You certainly almost never saw the boardroom when you brought up the topic of blockchain and especially crypto in the early days.”
And this receptivity is having repercussions across the marketplace. Online brokerage Robinhood Markets on Wednesday (May 8) reported first-quarter profits that exceeded expectations, driven by strong crypto trading volumes boosted by positive sentiment toward the crypto industry.
However, Robinhood faces challenges in the form of a Wells notice from the SEC, indicating potential enforcement action against the company. This development raises concerns about the future of Robinhood’s crypto trading arm.
That, it seems, exemplifies the state of the crypto sector in 2024: two steps forward, and three steps back. Or maybe, it is the other way around — only time will tell.
