TD Cowen: Crypto legislation faces obstacles, not just due to controversy over stablecoin yields.

Investment bank TD Cowen stated that the disagreements surrounding the CLARITY Act extend far beyond stablecoin yields, with multiple practical obstacles potentially slowing the legislative process. First, the Commodity Futures Trading Commission is understaffed, currently holding only one commissioner. Under these circumstances, Congress is hesitant to entrust the agency with more crypto regulatory responsibilities, and filling vacancies alone will take months. Second, the issue of prediction markets is escalating. Whether to include them in the bill's regulation, and potential insider trading and political conflicts of interest (including controversies related to Trump-related projects), could cause some Democratic lawmakers to oppose the bill. Meanwhile, the ongoing controversy surrounding the Trump family's crypto project, World Liberty Financial, is increasing the bill's political sensitivity, making bipartisan consensus more difficult to achieve. Geopolitics is also a variable. Discussions about Iran potentially using crypto payments are intensifying focus on anti-money laundering provisions and could even introduce amendments detrimental to the industry. Furthermore, some lawmakers are attempting to include the Credit Card Competition Act, which, if pursued, could trigger new conflicts of interest, further hindering the overall legislation.