Investing.com -- Crypto policy under President Donald Trump is showing signs of momentum, according to analysts at TD Cowen, even as stablecoin legislation faces new political resistance.
Stablecoin legislation, once considered likely to pass this year, has encountered unexpected trouble.
TD Cowen analysts say this shift is tied to two developments: involvement by the Trump family and the growing interest from social media companies in issuing their own stablecoins.
The entry of Big Tech into the stablecoin conversation has raised new concerns in Congress about data privacy and commercial influence.
Lawmakers had not initially focused on the overlap between stablecoin issuance and commerce, an issue that is tightly regulated for banks but was not expected to be central to the stablecoin bill.
That oversight is now more pressing as tech platforms explore stablecoin products, with members of Congress increasingly wary of allowing social media firms access to consumer spending data.
TD Cowen says this concern is likely to push lawmakers to expand the scope of the legislation.
Future drafts may need to address how stablecoins and commercial activity intersect and define rules for how consumer financial data can be used.
While the setback is significant for stablecoin legislation, TD Cowen does not view it as a broader indication of how crypto will be treated in Washington. Instead, analysts say crypto is performing better than any other sector in their policy universe under Trump’s influence.
At the banking agencies, including the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Federal Reserve, TD Cowen reports that barriers preventing banks from entering the crypto space, such as offering custodial services, are being removed.
Analysts see this as a signal that regulators are allowing for greater integration between crypto and traditional finance.
The Securities and Exchange Commission has also shifted its approach. TD Cowen says the agency has dropped high-profile enforcement actions against crypto platforms and is now focused on clarifying how crypto firms can comply with current law. Analysts point to SEC Chair Paul Atkins as a supportive figure for crypto innovation.
Early-stage progress is also being made on broader crypto market structure legislation, though TD Cowen does not provide a timeline for further developments.
According to TD Cowen, the troubles facing stablecoin legislation are more closely tied to concerns about Big Tech than to crypto itself.
While that delay may slow momentum in one area, analysts say it does not undermine what they describe as broad policy wins for the digital asset sector under Trump.