Ripple Case Sparks Intense Congressional Debate on Crypto Legislation: What’s at Stake?

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As the crypto industry and legislators across the United States grapple with the recent Ripple case and the “Torres Doctrine,” the political undercurrents shaping the future of cryptocurrency legislation are coming to the fore. Ron Hammond, Director of Government Relations at the Blockchain Association, provides a comprehensive look into the ongoing saga and potential shifts in congressional attitude toward cryptocurrency regulations.

According to Hammond, the landmark Ripple case has significantly influenced the politics surrounding the impending stablecoin and market structure bills, which are currently scheduled for a vote in House committees next week.

He argues that the Ripple case, though not a full victory for the company, has destabilized the SEC’s argument that legislation isn’t required and undermined its previous unbeaten record in court. “Off the bat, the SEC has put senior Democrats in Congress in a weaker negotiating position,” Hammond said.

Also Read: Ripple News: Why XRP Price Is Surging Today? Here’s What Traders Can Expect Next

A Flip in Legislation Position

In 2018, senior Democrats, Rep. Maxine Waters, and Sen. Sherrod Brown were in agreement that legislation regulating crypto was essential. However, by 2022, the stance flipped, primarily driven by SEC influence.

“When Gensler pivoted from his 2021 position on legislation, so did Democrats,” explains Hammond. The SEC’s position, Hammond notes, was adopted by most Democrats because “it is common for Congress to rely on regulators, especially when they are of the same party, as they are subject matter experts.”

The Ripple Case: A Catalyst for Change?

The Ripple case, however, has stirred the pot and reignited debates about the need for legislation. Confusion following the Ripple case outcome has made it apparent that legislation could be the only clarifying force. While this makes the proposed legislation appear primarily Republican-led, there are clear regulatory gaps that require bipartisan efforts to address.

“The Ripple case changes this,” Hammond says. “Now there are clear regulatory gaps, but Republicans need Democrats if they want this done.”

The Politics and Challenges of Future Legislation

Getting the bill to the President’s desk will involve navigating a complex political landscape. Though some Democrats, especially younger ones, have shown interest in the legislation, it will require bipartisan efforts and overcoming the differing stances within Biden administration regulators, such as Treasury and CFTC.

“Politics will determine if it is both bills or just stablecoins,” predicts Hammond. He notes the potential roadblocks in bucking party leadership but remains hopeful, drawing parallels with the SAFE Banking, the marijuana banking bill. Despite initial resistance from the party leadership, younger Republicans joined Democrats in supporting it, enabling it to gain traction in both the House and Senate.

Also Read: Leading Crypto Investment Firms Polychain Capital and Coinfund Secure $350M for Innovative New Funds

Crypto Market Structure Legislation: An Imperative

Despite these political complexities, Hammond echoes the sentiment of Democrat Wiley Nickel, who asserted,

“Whether you love crypto or hate crypto— you should support market structure legislation. Inaction is not an option.”