Coinbase’s (COIN) decision to end support for US market structure legislation will not derail the process, investment bank HSBC said, suggesting that while CEO Brian Armstrong prefers no bill over a bad one, he would probably accept a sensible compromise.
The report argued that a legislative floor is essential to provide the stability necessary for institutional entry.
“Coinbase’s withdrawal of support is not a death knell for US market structure legislation,” analysts Daragh Maher and Nishu Singla said in Tuesday’s report.
At its core, the proposed law is a high-stakes attempt to end the era of regulation through enforcement that has defined the US crypto landscape for years. Drawing a clear line between the authority of the Securities and Exchange Commission (SEC) over securities and the authority of the Commodity Futures Trading Commission (CFTC) For commodity oversight, the bill aims to provide the legal standards that institutional investors, from hedge funds to corporate treasuries, require before entering the market on a large scale.
Earlier this month, Armstrong said Coinbase reversed its support for the bill to protect consumers and prevent stifling competition in the market. The Senate Agriculture Committee delayed marking the cryptocurrency market structure until Thursday, citing travel disruptions following a major winter storm over the weekend.
Analysts noted a split in sentiment favoring the stock, with Ripple leadership continuing to argue that “clarity is always better than chaos.” This is reinforced by the enormous financial influence of the Fairshake PAC.
Additionally, analysts noted that advisers believe the current draft, while imperfect, could be more favorable than future versions under different political administrations.
Even if no resolution is reached, analysts expect a gradual victory through the Agriculture Committee’s bill, which would improve market integrity through CFTC oversight.
The bank cautioned against viewing the industry’s retreat as a dead end, citing the survival of the GENIUS Act through similar legislative hurdles.
Bitwise CIO Matt Hougan argued that market structure legislation is vital to codifying the current pro-crypto environment into law. Without it, he warned, the industry remains exposed to changes in management priorities, a stance that aligns with HSBC’s outlook.
Read more: Cryptocurrencies Face Fork in the Road as Clarity Act Support Wavers, Bitwise Says
