Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets.
The last few days have brought significant developments for the legal standing of the cryptocurrency industry. First, the US House of Representatives passed the first crypto regulation bill, FIT21, with bipartisan support. Among other points, the bill clarifies how to launch a token that is not a security. If the token is not a security, it will fall under the regulatory auspices of the Commodities regulator CFTC. However, for now, FIT21 is unlikely to pass through the Senate.
Another approval is equally if not even more meaningful: the Ethereum ETF applications of multiple funds, including VanEck and BlackRock, received a so-called 19b-4 approval from the SEC late Thursday last week. Now, the SEC only needs to approve the S-1 forms before trading can start. This can take from a few weeks to a few months. But unless anything entirely unexpected happens, Ethereum will follow Bitcoin and have its own ETF. This will make Ethereum accessible for regulated funds and entities as well as regular investors from their Stocks & Shares accounts. An approval for the Ethereum ETF looked extremely unlikely even a week ago. In the wake of the ETF approval, the question if Ethereum is an unregistered security has also been settled once and for all. The SEC could not approve an Ethereum Spot ETF but continue to argue in court that Ethereum constitutes an investment contract.
Finally, Republican Presidential candidate Donald Trump publicly stated that he “will ensure that the future of crypto and Bitcoin will be made in the USA.” He further voiced support for the right to self-custody. This declaration of support comes in the wake of Trump’s recent positive comments about crypto. They have helped to rally industry support for his candidacy and helped raise awareness among Democrats that attacking crypto will hurt, not help, their election prospects. In just a few strikes, cryptocurrency went from being under immense regulatory attack from all sides to being courted by politicians from both major US parties. The ETH ETF approval and the passing of FIT21 must be seen in the context of the upcoming elections.
It would be easy to be enthusiastic about these developments. In many ways they show how far the industry has come. But these symbols of mainstream approval should not be celebrated as achievements in and of themselves. Crypto set out to disrupt the traditional financial system. Blockchains enable credible decentralisation that can be used to fight monopolies and break up existing power structures. The technology should also serve to give people back their ownership over their money as well as financial privacy. These are the true objectives. Everything else is just a milestone on the road.