Crypto legislation is unlikely to make any progress before the end of 2024, though a stablecoin bill would have the best chance, investment bank TD Cowen said in a note on Monday.
U.S. lawmakers are on recess now until after the election, leaving just the lame-duck session — the period after the election in November and before a new Congress steps in January — to pass bills.
"We are pessimistic of major action during the session between the election and the swearing in of the new Congress in early January," TD Cowen Washington Research Group's Jaret Seiberg wrote on Monday.
Time to pass crypto bills is even more constricted since lawmakers have to pass legislation to fund the government as well as the National Defense Authorization Act, Seiberg said. The defense act, or NDAA, authorizes appropriations for defense-related activities.
Stablecoin legislation could pass under a "best case scenario," Seiberg said.
House Financial Services Committee Chair Patrick McHenry, R-N.C. and top Democrat of that committee, Maxine Waters, D-Calif., have been working on a bill to create a regulatory framework for stablecoins since 2022. That legislation advanced out of the Republican-led committee last year but has not gained traction. At the time, Waters called the bill "deeply problematic" due to a provision that allows state regulators to approve stablecoin issuances without Federal Reserve input.
However, Waters signaled last week that a deal could be close and told McHenry during a congressional hearing she wants them to "strike a grand bargain on stablecoins."
"If leadership on both sides wants a deal, this is the package that is ready for action," Seiberg said.
Millions of dollars have gone into the Ohio Senate race. Super political action committee Fairshake had pledged to use $12 million to oust Sen. Sherrod Brown, D-Ohio. Brown, who has been critical of crypto, leads the Senate Banking Committee, which has a major role in whether crypto bills are passed.
Brown is up against crypto-friendly candidate, Republican Bernie Moreno. As of Monday, polls are close with Brown leading 47% and Moreno at 44.3%, according to FiveThirtyEight.
"Whether they succeed or not, it is hard for us to see why Brown would want to reward crypto by letting any of their priorities become law," Seiberg said.
In a "worst case" scenario, Democrats could decide it does not want "reward" the crypto industry for its spending to oust Brown, Seiberg said, and could push stablecoin and market structure bills into 2026.
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