Coinbase’s (COIN) decision to end support for U.S. market structure legislation will not derail the process, investment bank HSBC said, suggesting that while CEO Brian Armstrong prefers no bill to bad legislation, he may be open to sensible compromises.
The report believes that legislative floors are critical to providing the stability needed for institutional access.
“Coinbase’s withdrawal of support is not the death knell for U.S. market structure legislation,” analysts Daragh Maher and Nishu Singla said in a note on Tuesday.
At its core, the proposed law is a high-stakes attempt to end the era of law enforcement regulation that has defined the U.S. cryptocurrency landscape for years. By drawing a clear line between the securities authority of the Securities and Exchange Commission (SEC) and the authority of the Commodity Futures Trading Commission (CFTC) The bill, which regulates commodities, aims to provide the legal rules needed before institutional investors, from hedge funds to corporate finance, can enter the market on a large scale.
Earlier this month, Armstrong said Coinbase withdrew its support for the bill to protect consumers and prevent stifling competition. The Senate Agriculture Committee delayed its cryptocurrency market structure hike until Thursday, citing travel disruptions caused by a weekend winter storm.
Analysts noted the divergence of sentiment in favor of action: Ripple’s leadership still believes that “clarity is always better than chaos.” Fairshake PAC’s massive financial clout underpins this.
Additionally, analysts noted that consultants believe the current draft, while imperfect, may be more favorable than future versions under a different political administration.
Even without a resolution, analysts expect incremental victory for the Agriculture Committee bill, which would bolster market integrity through oversight by the Commodity Futures Trading Commission.
The bank warned against seeing industry resistance as a dead end, noting that the Genius Act survived through similar legislative hurdles.
Matt Hougan, CIO of Bitwise, believes that market structure legislation is critical to enshrining the current crypto-friendly environment into law. He warned that without it, the industry would still be at risk of changing executive priorities, a stance consistent with HSBC’s outlook.
Read more: Cryptocurrencies face fork in the road as support for Clarity Act wavers, Bitwise says
