markup machinations – 1 of 3
Regarding the scuttled markup of Senate Agriculture Chair Debbie Stabenow’s (D, MI) unofficially titled, “Digital Commodities Consumer Protection Act 2.0” (DCCPA 2.0), Politico’s Morning Money noted yesterday that – aside from the fact some Dem Senators weren’t available for the crypto regulation framework’s markup – Senate Ag Ranking Member John Boozman (R, AR) was not on board with the bill, yet.
what you should know: Though not explicit, Boozman has previously expressed interest in making sure any bill receives the proper industry feedback. Was there a disconnect in DCCPA 2.0 from the Ranking Member’s point-of-view? Or, do Republicans clearly see an opportunity to “make hay” in November with the digital assets crowd, (see Trump in Nashville over the weekend), so why give Democrats any kind of win?
markup machinations – 2 of 3
Yesterday afternoon, Senate Ag Chair Debbie Stabenow issued a seeming response to the “Ranking Member news” in Politico on Senate Ag Ranking Member Boozman’s reticence to come aboard with support for DCCPA 2.0.
In a statement, Chair Stabenow said:
“I am very proud of the bill we’ve drafted to bring clear rules of the road to the crypto market. It is a balanced bill that prioritizes necessary customer protections, and the industry agrees would not stifle innovation. I have worked closely with Senator Brown and the Banking Committee on this effort. There is still time to pass a bill this year, but I need a Republican senator to step up in order to accomplish that goal. I sincerely hope that politics does not get in the way of good policy.”
what you should know: There’s a lot going on here -and not just digital assets policy although “a Republican Senator” is a bit tongue-in-cheek. The Farm Bill remains a radioactive topic between the parties across agriculture committees in both houses of Congress, for example. But, Chair Stabenow’s public statement appears to be trying to shift blame to Republicans on a digital assets policy framework. Meanwhile, the Financial Innovation and Technology for the 21st Century Act (FIT 21) – passed in the House in May and led by House Republicans – awaits action in the Senate.
markup machinations – 3 of 3
About an hour after Chair Stabenow’s statement, Ranking Member Boozman sent his polite reply to the press:
“As ranking member of the Senate Agriculture Committee, I have consistently said I believe the Commodity Futures Trading Commission performs an important role protecting consumers in the crypto marketplace and I have worked in good faith with Chairwoman Stabenow to give the agency the tools it needs to meet that responsibility.”
“The Chairwoman’s efforts to address our concerns to legislative text she drafted are appreciated. Outstanding concerns remain, but it has moved in the right direction.”
“However, committee members, industry stakeholders and consumers all deserve a more methodical process than this rushed approach. I do not believe an arbitrary deadline is the way to achieve the proper outcome.”
“Digital commodities and the regulatory issues they raise are complex. Standing up a market regulatory regime for the first time ever requires due diligence and outreach necessary to consider all unintended consequences and warrants a process that gives members adequate time to deliberate the legislation they are being asked to approve.”
“We have time to get this right. I remain committed to a bill that we can all proudly support. One that protects consumers in the digital commodities space, fosters innovation and provides the regulatory certainty businesses need to maintain their operations in the United States.”
what you should know: The respectful tone of the Stabenow and Boozman statements aside, it seems clear that nothing will happen until post-election. And whether you’re on Capitol Hill or in the digital assets industry come November 6 (the day after Election Day), you better be ready.
‘crypto is partisan’
Wall Street research analysts at Bernstein believe digital assets has moved from bipartisan or non-partisan to full-on partisan after former President Donald Trump’s appearance at Bitcoin 2024 over the weekend.
According to the Block, the Bernstein analysts Gautam Chhugani, Mahika Sapra and Sanskar Chindalia wrote in their most recent note yesterday: “The crypto community and industry seem clear that crypto is no longer a bipartisan issue. (…) We believe the crypto markets will trade completely top-down on political developments until the election results in early November.”
what you should know: There’s a lotta noise right now, but as everyone knows, you can’t get anything done in a divided Congress without bipartisanship. Only 100 days to go.
staff announcement
McHenry Announces New Staff Director for Financial Services Committee, Kim Betz – financialservices.house.gov
no noms news
Noms may go to the “lame duck” in November.
It appears Senate Banking Chair Sherrod Brown (D, OH) has been unable to get anything done regarding the nominations of Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero as FDIC Chair and the re-nomination Securities and Exchange Commission (SEC) Commissioner Caroline Crenshaw – arguably the two noms with the sharpest partisan divide. (Dems “for”, Republicans “against.”)
CFTC Commissioner Kristin Johnson for a U.S. Treasury post and Gordon Ito for membership in the Financial Stability Oversight Council (FSOC) are the two other nominations.
what you should know: Perhaps the three weeks of Congress in-session in September could see some action – but – it seems clear that politics and the upcoming elections are bringing Congressional action to a halt until the electorate speaks.
use case – Bitcoin lending
Spinning out of the Bitcoin 2024 conference, the lending of digital assets as a financial product is gaining momentum – in other words, using digital assets as collateral for U.S. Dollar loans.
At the conference, Chairman Howard Lutnick of Cantor Fitzgerald said, “The firm will start with a lending pool of $2 billion and ratchet it up in $2 billion increments,” according to Ledger Insights. The publication further explains, “a healthy lending market is viewed as foundational in the TradFi space. While Bitcoin may be a commodity with a $1.37 trillion market capitalisation, securities lending is a big earner in TradFi.”
what you should know: Cantor Fitzgerald also manages at least part of stablecoin Tether’s U.S. Treasury reserves.
more crypto and Trump
Brazenly flip-flopping, Trump adds crypto to his MAGA agenda – MSNBC
Elon Musk says he sees merit in Bitcoin following Trump’s speech at Bitcoin 2024 – The Block
Donald Trump’s bitcoin obsession – The Week
Trump Adds Crypto to His ‘America First’ Agenda (Saturday) – The Wall Street Journal
still more tips
There’s a Problem With Senator Lummis’ Bitcoin Reserve Plan, Cato Institute Expert Says – Decrypt
Winklevoss twins and crypto ties seek to shape Arizona Democratic primary race – NPR
Crypto is emerging as an electoral issue. Some say it’s typical ‘pay-to-play Washington politics.’ (subscription) – Pensions & Investments
How Social Media and Crypto Help Organ Traffickers – Newsweek