Cannibis And Digital Assets Legislation May Meet In Congress; Shutdown Means Slowdown

cannabis for crypto

In an interview with Fortune’s Leo Schwartz on Friday at Messari Crypto’s Mainnet event in New York City, Senator Kirsten Gillibrand (D, NY) divulges a possible way forward for digital assets legislation in the Democratic-controlled Senate and the Senate Banking Committee, specifically – a key roadblock to regulation in the United States in the minds of pro-crypto advocates.

Gillibrand sees the possibilities for some “horse trading” as Fortune’s Schwartz writes, “One possible solution would be reaching a compromise on one of the Senate Banking Committee’s priorities – cannabis banking reforms – where the House and Senate committees would take up each other’s bills. Gillibrand said that she has spoken with [Senate Banking Chair Sherrod Brown (D, OH)] about a compromise along those lines, although declined to comment on his openness to the proposal.” Read more.

Gillibrand still sees her Lummis-Gillibrand Responsible Financial Innovation Act as playing a role in Senate efforts to bring digital assets under the U.S. regulatory umbrella. Overall, the fact that the New York Senator is very public about these possible next steps for legislation is new for any sitting, Democratic U.S. Senator. And her influence shouldn’t be underestimated in that her fellow New York State Senator is the Senate Majority Leader Sen. Chuck Schumer (D, NY).

h/t @AlexanderGrieve

stablecoin bill research

Congressional Research Service (CRS) published a new primer yesterday for “H.R. 4766, Clarity for Payment Stablecoins Act.”

Download the 3-pager here (PDF).

CRS authors Paul Tierno and Andrew Scott explain, “H.R. 4766 focuses on payment stablecoins—which it defines as digital assets issued for payment and redeemable at a predetermined fixed amount—that hold assets in reserve that can be used to redeem the stablecoins. The bill would require an issuer to hold at least one dollar of permitted reserves for every
dollar worth of stablecoins outstanding/issued…”

Also of note in the report: “endogenously collateralized stablecoins” = “algorithmic stablecoins.”

government shutdown

Yesterday, Blockchain Association Director of Government Relations, Ron Hammond, provided a digital assets regulation update to his followers on X and highlighted the effects of the impending government shutdown. “It is seeming more and more likely there will be a shutdown with the fractured House [Republican] divisions and Senate going in their own direction. For crypto the longer the shutdown goes on, the more various bills including FIT/market structure and stables get pushed,” tweeted Hammond.

On the House SEC Oversight hearing on Wednesday, he said on X, “With the looming shutdown though, many [Democrats] will use their time to hit the [Republicans] given the disarray the House is in with the shutdown. It will be interesting to see which [Democrats] pivot from the macro political shutdown messaging and be critical of the SEC (on crypto and other issues).”

Hong Kong or high water

Hong Kong crypto efforts – with a brand new regulatory framework – appear to be off to a rock start. Yesterday, Reuters reported a $200 million hack of one local firm. And then The Wall Street Journal reported yesterday that a crypto exchange called JPEX which was operating in the region without a license (JPEX had falsely claimed it was licensed in Dubai). Still, the city’s Securities and Futures Commission (SFC) is not pausing and has approved “two Hong Kong-based exchanges (…) under the city’s new licensing regime, and the SFC named four other applicants on Monday.” Read more from The WSJ.

use case – academic verification

TechCrunch features an interview with Ayodeji Agboola, founder of startup Akowe, a “blockchain-based platform for issuing verifiable academic record.” Aboola says there’s big demand digital certificate verification systems in sub-Saharan Africa partly due to antiquated systems and university’s unwillingness to share information.  Read more about how the system works.

more tips:

NASA using blockchain on the Moon – BBC Science Focus


A new report from digital asset investment company CoinShares takes a look at the latest fund flows in crypto notes a regional divergence “with inflows into Europe totalling US$16m, where investors see recent regulatory disappointment as an opportunity. While US investors pulled out US$14m.” Hard to make any observation given the numbers are so miniscule compared to the wider financial world. But, CoinShares reports this is the 6th consecutive week for crypto outflows in the U.S.

Would a Bitcoin Spot ETF approval change that? Seems like the quiet before the storm.

still more tips

Presidential hopefuls are getting louder on crypto issues, at least for now – Blockworks

Stablecoin exodus: Why are investors fleeing crypto’s safe haven? – Cointelegraph

Coinbase Obtains Bank of Spain Registration in Spain – Coinbase

Tension rises between Coinbase and SEC over Celsius bankruptcy plan – The Block