There has been significant hope that the Biden administration will make the most progressive step forward in crypto regulations. On the back of heightened Bitcoin demand and adoption, a Commissioner at the country’s top securities regulator is calling for serious regulatory consideration.
The Stars Are Aligning
Last week, Hester M. Pierce, a longtime Commissioner at the Securities and Exchange Commission (SEC), spoke with Reuters about the need for cryptocurrency regulations. In her interview, Pierce, a long-running crypto fan, explained that institutional demand for digital assets had made regulations more of a necessity, and the SEC will need to act quickly.
Pierce’s affinity for cryptocurrencies has long been noted – even earning her the moniker “Crypto Mom.” As she explained to Reuters, the stars seem to have aligned for the SEC to finally take crypto regulations seriously, with a new administration and the increasing institutional demand.
“It’s not only that there have been calls for clarity for some time and that a new administration brings the chance to take a fresh look, but it also is a moment where it seems others in the marketplace are also taking a fresh look,” Pierce told Reuters.
The policymaker isn’t exactly wrong. 2020 saw significant institutional crypto adoption, with several large companies committing millions into Bitcoin to hedge against inflation and protect themselves from the coronavirus’s devastating economic impact. The increased investment led to a price surge for Bitcoin, which, as expected, spilled over to most other cryptocurrencies.
2021 hasn’t proven to be so different. In the past week alone, car manufacturer Tesla has announced a $1.5 billion commitment to Bitcoin and its integration of the leading cryptocurrency as a payment method for future products – most likely starting with the upcoming Cybertruck.
Mastercard, the top payment processor, and credit card manufacturer, has also announced that it would integrate Bitcoin into its services. The move will see the firm provide Bitcoin access to its almost billion-strong user base and 30 million merchants. Days later, Bank of New York Mellon, the country’s oldest banking institution, confirmed that it would now provide Bitcoin custody services.
There’s Hope After All
These announcements – particularly that of Tesla – have driven Bitcoin’s recent rally, bringing the asset agonizingly close to the $50,000 price peg. Analysts believe that $50,000 will be in play this week – a phenomenon that will take Bitcoin over the 100 percent gain mark in less than three months.
Now that more companies are expected to make similar announcements, Pierce is correct in calling for crypto regulations. Fortunately, the Biden administration appears poised to fly where the Trump administration failed.
Last month, Cynthia Lummis, a pro-crypto Senator from Wyoming, told crypto hedge fund founder Anthony Pompliano that incoming Treasury Secretary Janet Yellen is keeping an open mind towards crypto regulations. The Senator, who is now a member of the Senate Committee, explained that she had also launched a Financial Innovation Caucus to educate her Congressional colleagues and other policymakers on digital assets going forward.