This week, the U.S. House Financial Services Committee will vote on several bills related to oversight and regulation in the cryptocurrency sector.
Among the legislation to be considered by the Financial Services Committee are highly important bills that will determine the conditions under which cryptocurrencies will be classified as securities or commodities, as well as regulations for stablecoins backed by fiat currencies like the U.S. dollar.
The proposed bills include the "Financial Innovation and Technology Act for the 21st Century," the "Blockchain Regulatory Certainty Act," and the "Financial Technology Protection Act of 2023." The bill focusing on the definition of crypto assets was updated recently following a federal court ruling that declared XRP was not a security for individual use. This bill is expected to provide clarity between the long-standing dispute between the SEC and CFTC over cryptocurrency regulation in the U.S.
Market participants view this legislative process as the most significant one so far, despite important decisions being made for the sector in the past. If the bills are passed unanimously in the Financial Services Committee, they will then move to the U.S. Senate for approval.
Additionally, another important development to watch for is the outcome of the FOMC meeting today. Market experts believe that the Fed's 25 basis points rate hike will be the last one for this year, and the central bank will pause its rate increases thereafter. Some analysts predict that after the first quarter of 2024, the Fed might start reducing interest rates if inflation returns to the targeted zone.
Some commentators in the crypto sector, however, maintain their belief that the tightening monetary policy by the Fed, which triggered a downtrend in the market, will reverse and lead to an upward momentum once the interest rate increases are put on hold.#CryptoDeNostradame