US Crypto Rules Keep Bitcoin Holders Guessing

The US government has struggled to create a stable framework for cryptocurrency regulation, leading to confusion and uncertainty for Bitcoin holders. Despite the lack of a clear law, banks have been willing to provide custody and settlement services for Bitcoin, but their policies have changed with each new administration. The Congressional Research Service notes that the US approach to cryptocurrency regulation has been 'ad hoc, piecemeal, and inconsistent' across agencies, which can be problematic for banks and crypto companies.

When President Trump was in office, his appointees approved specific crypto activities on a case-by-case basis, while President Biden's appointees required supervisory approval before a bank could undertake any crypto activity. This policy difference is significant, as it shows how leadership can impact the way banks interact with cryptocurrency.

The CLARITY Act, which was proposed to regulate cryptocurrency, was voted down in the Senate, with Democratic concerns about President Trump's family profiting from crypto ventures being a major obstacle. While the market reacted negatively to the bill's failure, it's not clear that passage would have solved the issues surrounding custody and settlement.