Distributed Ledger Gets Boost By White House; Coinbase Reports Q1 Ahead Of Estimates

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The Biden Administration released a new “national standards strategy” which could be construed positively for distributed ledger technology and digital assets yesterday. The broad framework aspires to bolster “U.S. engagement in standards for critical and emerging technology (CET) spaces will strengthen U.S. economic and national security.”

The Fact Sheet for the CET report explains the strategy’s four pillars: Investment, Participation, Workforce, Integrity/Inclusivity. And, the CET report lists all the areas where standards are needed (see pages 6 and 7) including: “Digital Identity Infrastructure and Distributed Ledger Technologies, which increasingly affect a range of key economic sectors.”

This is the most hopeful statement about blockchain tech since the President’s digital assets Executive Order in March 2022. But, it doesn’t signal the end of the anti-crypto army.

more tips:

FACT SHEET: Biden-⁠Harris Administration Announces National Standards Strategy for Critical and Emerging Technology – WhiteHouse.gov

United States Government National Standards Strategy For Critical And Emerging Technology (PDF) – WhiteHouse.gov

Coinbase still pulsing

Cryptocurrency platform company Coinbase reported its Q1 2023 earnings yesterday and beat estimates.

According to Marketwatch, “The company reported a first-quarter net loss of $78.9 million, or 34 cents a share, compared with $429.7 million, or $1.98 a share, in the same quarter last year. Revenue fell to $772.5 million, compared with $1.17 billion in the prior-year quarter. Trading volumes came in at $145 billion. Analysts polled by FactSet expected Coinbase (COIN) to report a per-share loss of $1.45, on revenue of $655 million. They expected trading volume of $147.7 billion.” Read more.

In its 23-page, Q1 Shareholder Letter, the Company does not shy away from the battle ahead to achieve regulatory clarity for crypto in the United States. Yet, Coinbase sees hope in the European Union and elsewhere: “The EU adopted MiCA, the most comprehensive regulatory framework for crypto globally. This is an exemplary, landmark moment in that it provides a single rule book for crypto (removing the current patchwork of national regimes), and delivers legal and regulatory clarity and certainty for the region. Other markets following suit include Hong Kong, The UK and Australia.” Read it.

more tips:

First Quarter 2023 Shareholder Letter (PDF) –Coinbase
First Quarter 2023 Earnings Call and Communications – Coinbase

digital assets definition

The Securities and Exchange Commission (SEC) continues to crank out new rules and changes to old rules under the leadership of Chair Gary Gensler. In finalizing a rule known as Form PF (a regulatory filing for private funds) on Wednesday, the Commission decided – led by its Chair – decided to not tackle how digital assets would be handled, yet.  On page 79 of the rule, it reads: “We proposed adding ‘digital assets’ as a new term to the Form PF Glossary of Terms. The
Commission and staff are continuing to consider this term and are not adopting ‘digital assets’ as part of this rule at this time.” See the rule (269 pages, PDF). And, read the SEC release.

Republic Crypto’s Andrew Durgee tells Blockworks’ Casey Wagner, “The proposed definition for digital assets was very vague noting that the agency will likely ‘take a deeper dive’ and create a more detailed approach to regulating how funds interact with crypto.” Read more.

States rejecting CBDCs

In another action by U.S. states to inhibit the growth of a Central Bank Digital Currency (CBDC), the state of North Carolina’s House of Representatives nearly unanimously (Republicans hold majority 72-48 according to Ballotopedia) passed a bill yesterday to “prohibit individuals from using CBDCs for any payments to the state, as well as bar the Federal Reserve from using North Carolina as a potential testing ground for its own CBDC pilot.” Read more in CoinTelegraph. Next step is the North Carolina Senate and then Governor Roy Cooper’s (D) desk.

States with Republican governors such as Florida and South Dakota have taken actions against CBDCs recently. Florida’s legislature passed anti-CBDC legislation on Wednesday according to Protos.

Similar to “anti-crypto army” positioning ascribed to by national Democratic party leaders, Republicans are taking an anti-CBDC stance amid fears of enabling a “surveillance state.”

more tips:

“No Centrl Bank Digital Currency Pmts to State” (PDF) – ncleg.gov

CS/HB 7049: Central Bank Digital Currency – flsenate.gov

finance – institutional signal

Institutions may have been sitting out the rise in the price of Bitcoin since the first of the year if feedback from a banking executive is to be taken at face value. At this week’s Digital Assets Week in California, Northern Trust’s head of digital assets and financial markets Justin Chapman tells CNBC, “We’re not focused that much on the asset class because the client isn’t at the moment. (…) So we’re not seeing that appetite to have that within their portfolios. If that changes, as a firm, we can account for those capabilities. But it’s certainly lost its shine from the institutional perspective.” Read more.

finance – tokenized assets

Hamilton Lane, a multi-billion dollar investment-management firm “is offering tokenized access to a second fund (…) – a feeder fund from Securitize on the Polygon blockchain.” According to CoinDesk, the feeder is the second of three funds announced by Hamilton Lane that uses tokenization. CoinDesk explains, “Tokenization is a growing field that claims to widen access to traditional finance products by making private market investment available to investors who don’t fall into the institutional or ultra-high-net worth net bracket. In this case, the minimum investment is lowered to $10,000 from $2 million.” Read more.

crime and punishment

OpenSea Ex-Head of Product Convicted in NFT Insider Trading Case – Decrypt

Exclusive: Israel seized Binance crypto accounts to ‘thwart’ Islamic State, document shows – Reuters

FTX Asks for Billions Back From Bankrupt Crypto Lender Genesis – The Wall Street Journal

Sam Bankman-Fried Is Just Being Rational – The Information

still more tips

Soulja Boy Dropped April’s Biggest Music NFT — And Then It Got Pulled – Billboard

Coinbase to Stop New Loans Against Bitcoin in Borrow Service (old loans are fine) – Bloomberg

Crypto May Keep Dragging on Robinhood. Why One Analyst Is Raising Earnings Estimates – Barron’s

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