With the adoption of the Genius Act and growing momentum behind the clarity bills in Congress, legislative clarity for digital assets is finally within reach – the legal framework provides the crypto industry for a long time. But when this clarity arrives, is crypto established the real winners?
For years, the dominant narrative of the crypto industry was that unclear regulation and enforcement would tighten the jacket industry in the world’s largest economy. It did. Litigation Curly Startups. Capital left the American talent flowing abroad.
A group suffered most of all: the country’s more than 3,300 US brokers. Bound by federal laws, brokers dealers were forced to sit on the sidelines as billions of dollars floated to crypto that would otherwise be theirs. Retail investors funded the rapid expansion of Coinbase, Robinhood and other fintech companies happy to exploit as needed.
Crypto grew for four of the last five years – the only stain was 2022, damaged by the FTX implosion. At the same time, the American brokerage industry was idling, waiting for guidance on how to issue, acted and deteriorated by these assets.
The lack of legislative clarity did not block the crypto-it, the crypto industry a perennial lead in capturing market share and building brand loyalty. But as a legislative clarity is sharpened, Wall Street has another-MOVOVER advantage in digital assets?
The path becomes clearer. In July, SEC Commissioner Hester Peirce said tokenized shares are securities and must comply with the federal securities laws. Her statement followed Robinhood’s tokenized warehouse launch in the EU and sent a direct message: any tokenized securities products in the United States are subject to federal securities laws.
This statement in accordance with SEC’s previous guidance on modernizing US capital markets leveling the rules of the game of both established and disruptive substances by signaling that there will be no circumvention of federal securities laws. Traditional economy and crypto are now on par.
Wall Street has moved quickly to offer digital asset products of their own. More than $ 170 billion in assets floated to 105 Crypto ETFs traded in US markets, with Blackrock and Fidelity, collects more than $ 100 billion. Large banks – recently hanging by Citigroup and JPMorgan – launch stablecoins to make sure payments run over their rails. And it’s not just the biggest banks: Financial Technology Giant Fiserv will supply regional banks with its new stableecoin, FIUSD.
New roads offer both retail and institutional investors opportunities to enter the market. Broker dealers can offer clients direct exposure to digital assets through a correspondent in clearing special purposes broker-dealer without reviewing their infrastructure or applying for new licenses. This opens the door for e-commerce, Merrill Edge, Fidelity and others to meet the client’s demand for digital assets while remaining square within the bounds of US law.
Internationally, the trend is also clear. Recently, Standard Chartered became the first global systemically important bank to launch a spot of Crypto Trading Desk offering Bitcoin and Ether to institutional clients.
Ironically, it is now the older crypto companies who are struggling to embrace the regulated model they once sought to bypass. Companies acquire SEC-registered brokers, seeking Finra membership and applying for Bank Charter to extend their offer to brokerage and bank accounts.
SEC chairman Paul Atkins said in May that “securities are increasingly migrating from traditional (or” off-chain “) databases to blockchain-based (or” on-chain “) headbox systems.” His priorities are to “develop a rational legislative framework for crypto -active markets that establish clear rules for the path of issuing, custody and trade in crypto assets.”
Atkins’ vision for integrating blockchain into existing market infrastructure emphasizes a basic truth: The path forward is not about creating parallel systems, but about upgrading the existing one. This favors companies that have already been penetrated by compliance, operation and investor protection. US brokers can immediately benefit from this, considering the introduction of correspondent cleaning, compliance with existing compliance structures, large customer base and operational scale.
In addition to brokerage dealers, the opportunity is now for Wall Street to lead the development of digital markets in the US and cement the country’s position as the global leader in capital formation, market integrity and financial innovation. Wall Street has the infrastructure, legislative clarity takes shape, and demand for the investor is there. The question now is who leads the next chapter.
