Crypto Markets Hit Legislative Roadblock Amid Higher Interest Rates

Crypto markets faced a legislative setback and higher interest rates, alongside progress in tokenized-stock trading and renewed Bitcoin ETF inflows. The proposed framework for the crypto market structure stalled after failing to advance in a US Senate procedural vote on an act called CLARITY.

The Federal Reserve raised its policy rate by 25 basis points to 3.75-4.00%, tightening the monetary backdrop for risk assets, which are typically sensitive to interest rates. This move is likely to weigh on crypto markets that have already been struggling with declining prices and lower trading volumes.

On a more positive note, the Securities and Exchange Commission announced five-year conditional exemptions for eligible tokenized-stock trading venues and liquidity providers. This development could facilitate the growth of tokenized stock trading by reducing regulatory hurdles.