JPMorgan noted in a recent research report that U.S. crypto regulations are moving in a direction that favors the launch of a central bank digital currency (CBDC), looks negatively on crypto adoption by local banks, and non-compliant stablecoins.

The bank notes that regulatory initiatives have increased in the US in recent months, raising questions about the direction of crypto regulation ahead of the presidential elections later this year.

Analysts led by Nikolaos Panigirtzoglou wrote in a report on Wednesday: “They are against a coin tied to the Fed, against U.S. banks dealing with cryptocurrency, against non-compliant stablecoins like Tether (USDT), and against all tokens other than Bitcoin (BTC) and Ethereum (ETH) being securities.” “They are against being classified as such,” he wrote.

The Financial Innovation and Technology for the 21st Century Act (FIT21), passed by the House of Representatives last month, still needs to be approved by the Senate and ultimately the President. The bank said this was unlikely to happen before the election.

JPMorgan noted that Congress passed a resolution overturning the SAB 121 accounting rule that made it harder for banks to store crypto assets, but the resolution was vetoed by President Joe Biden.

The report said the Central Bank Digital Currency (CBDC) Anti-Surveillance Act is an attempt to block a U.S. CBDC, preventing Fed banks from offering certain products to consumers and using a central bank digital currency for monetary policy. The bill banning the FED from issuing CBDC was passed by the House of Representatives last month, but it is unclear whether it will be accepted in the Senate.