Bankers Unite With Lawmakers; Digital Assets Sliced Off Signature Bank Sale

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bankers unite in DC

The American Bankers Association is producing its Washington Summit this week as its members glad-hand on Capitol Hill while pushing for various banking industry priorities. The agenda for today and tomorrow includes a powerful, bipartisan group of DC politicos involved in banking regulation and legislation. “Crypto” will inevitably come up even though the topic is not mentioned in the agenda.

Each day also includes its own live stream link (see below). You can register for the virtual show here, too.

Notable Speakers for Today, March 21 (All times are Eastern Time)
Livestream for Day 1 is here.

    • 10 a.m. – Secretary of the Treasury Janet Yellen – Keynote plus conversation with ABA President and CEO Rob Nichols
    • 10:30 a.m. – Sen. Steve Daines (R, MT) – Member of the Senate Banking Committee “and co-sponsor of the SAFE Banking Act”

Notable Speakers – Wednesday, March 22
Livestream for Day 2 is here.

    • 9:00 a.m.  – Sen. Sherrod Brown (D, OH), Senate Banking Ranking Member
    • 9:40 a.m. – Rep. Maxine Waters (D, CA) – House Financial Services Committee Ranking Member
    • 10:15 a.m. – Sen. Tim Scott (R, SC) – Senate Banking Ranking Member
    • 11:00 a.m – Rep. Patrick McHenry (R, NC) – House Financial Services Committee Chair

is crypto banking dead?

American Banker –  no relation to ABA – asks the reader rhetorically, “Is crypto banking dead?” in the title of an article which provides evidence of a “Choke Point“-like operation going on in the U.S. government and at the Federal Deposit Insurance Corporation (FDIC), in particular.

“Hundreds of banks that were working with NYDIG, a New York technology company, to let consumers track their bitcoin purchases and sales through their mobile banking apps, have been told by the FDIC to slow down, according to people familiar with the matter,” reports Penny Crosman of American Banker. ” Adam Shapiro of Klaros Group tells Crosman, “Banks are going to read the tea leaves, read what does appear to be some quite visceral dislike of the sector from senior regulators.” Read more.

Signature Bank – digital assets exclusion

On Sunday, New York Community Bancorp’s Flagstar Bank subsidiary made a deal for Signature Bank. But, “Flagstar Bank also confirmed that the transaction doesn’t include any digital assets, crypto-related assets or deposits. In particular, many crypto firms relied on Signet, a payments system that worked 24/7 and was used by crypto companies for on-ramps and off-ramps. Signet isn’t part of the deal,” reports TechCrunch.

“The FDIC will provide these [digital assets] deposits directly to customers whose accounts are associated with the digital-asset banking businesses,” says the FDIC press release.

Signature Bank – please pass the risk

The Wall Street Journal follows the travails of Signature Bank’s business strategy in the past decade and reveals an appetite for risk. The Bank’s growing real estate lending business to New York City apartment landlords set off alarms with regulators. So, “Signature over the years branched out into less-conventional businesses, such as heavy-equipment lending and loans to cabdrivers. It later provided short-term loans for private-equity investors and launched a transaction platform targeting crypto businesses.” Read more.

Coinbase meets Supreme Court

Coinbase is going to the Supreme Court beginning tomorrow to try and stem the tide on a couple of class action lawsuits. CoinDesk’s Cheyenne Ligon reports, “Though the case will not set a precedent in either direction for the most important issues facing crypto, it could have a significant impact on the emerging litigation landscape in the crypto sphere, and would have wide-ranging implications for other crypto companies that have increasingly been targeted by class action lawsuits.” Read it.

big bet

A “1 Bitcoin for $1 million” bet that emerged over the weekend between crypto gadfly Balaji Srinivasan and an anonymous, “left-leaning” Twitter account known as James Medlock. “At a time of distress in the financial system, Srinivasan’s wager invites the public to go down the crypto rabbithole with him and invert their perceptions of which monetary systems are “safe and reliable” and which are “dangerously unstable,'” reports Politico. More here.

CBDCs in Basel

The Bank for International Settlements (BIS) will be hosting its “BIS Innovation Summit 2023” today and tomorrow beginning at 8 a.m. ET (1 p.m. CET).

BIS, whose mission is to foster international “cooperation and serve as a bank for central banks” has put together several digital assets-related discussions to address next steps on the path to CBDCs as well as the how regulators are dealing with the current “crypto winter.” (See agenda):

Virtual registration for the livestream is available here.

digital asset machinations

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