Democratic Disbelief About Administration’s Stance; CFTC’s Goldsmith Romero Linked To FDIC

Democratic anon speaks

In a New York Magazine feature article titled, “Are Democrats Pivoting on Crypto?,” the seeming transformation of Democrats – and Dem leadership, particular – is covered in depth.

An anonymous Democratic source shares frustration with NY Mag’s Jen Wieczner: “The approach that both [SEC Chair] Gary Gensler and [Senator] Elizabeth Warren (D, MA) have advocated, refusing to regulate the technology on the grounds that that will be the best way to kill the technology, no longer makes any sense – it’s a failed policy. (…) Based on our polling, there are millions of voters who are going to vote against Joe Biden on the basis of Gary Gensler’s approach on this issue. With democracy on the line, that’s just a phenomenally irresponsible approach to take.” Read more.

what you should know: Would a quick pull-back of the SEC’s SAB 121 by Chair Gensler save the day for Dems? The policy chasm that Dems must cross to get that “pro-crypto” voter may be too large. The question remains… are their enough single issue voters on crypto to tip the election?

stablecoin issuer invests

CEO Paulo Ardoino of Tether Holdings – which is the issuer of the world’s largest stablecoin (USDT) backed by the U.S. dollar – said in an interview with Bloomberg yesterday that his company expects to invest more than $1 billion over the next 12 months.

Ardoino projects funds being put to work in a range of startups focusing on “alternative financial infrastructure for emerging markets, artificial intelligence and biotech — areas where it has already spent about $2 billion over the past two years.” Read more.

what you should know: Tether is pouring off profits. It makes sense that they put the money to work. Meanwhile, the non-U.S. company’s success making a business with the U.S. dollar should be a cautionary tale. As the United States continues to move slowly on bringing digital assets under the U.S. financial system umbrella, non-U.S. companies are disrupting the country’s leadership position around the globe.

Trump meets miners

    • Photo: “Today, Riot [CEO Jason Les] and Riot’s Head of Public Policy, [Brian Morgenstern], met with [former President Donald Trump] to discuss Bitcoin mining and energy.” – @RiotPlatforms last night on X
    • Trump Meets Bitcoin Miners in His Latest Pro-Crypto Overture – Bloomberg
    • Opinion: Why Donald Trump is the best Presidential candidate to foster a safe and innovative environment for Bitcoin – Riot’s Brian Morgenstern in Bitcoin Magazine

you’re tokenized

Fidelity International tokenizes fund on JPM Tokenized Collateral Network – Ledger Insights

CFTC Commish – FDIC Chair

The latest scuttlebutt on replacing Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg, who resigned last month following a sexual harassment scandal at his agency, has Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero taking over the Chair role.

The Wall Street Journal reported late Monday, “She gained traction in the White House because of her management experience and her ‘record as a reformer’ when she served as the TARP special inspector general, one of the people said. She was twice confirmed by the Senate for previous jobs.” Read more.

But is a confirmation process  – with its need for bipartisanship amid a compressed, election year schedule – possible in this Congress?

Capitol Account points out, “Republicans, despite wanting Gruenberg out, also have reasons not to speed his replacement into office. Historically, FDIC chairs have served their five-year terms across administrations.” Read more (subscription).

CFTC Commish – digital assets

As it relates to digital assets, Goldsmith Romero has been tilted toward a Dem leadership point-of-view in her tenure with a focus on consumer protections. She’s also shown a willingness to participate in dialogues with the digital assets industry.

The CFTC Technology Advisory Committee (TAC), which Commissioner Goldsmith Romero sponsors, has tackled subjects such as decentralized finance (DeFi).  For example, in advance of a TAC meeting in March 2023, she teased a panel discussion: “A discussion about DeFi, including cyber vulnerabilities, indicators of ‘decentralization,’ digital identity and unhosted wallets, will contribute to ongoing policy discussions in Washington, D.C. and beyond the beltway… The committee has an opportunity to look past labels and examine the issues presented by DeFi thoughtfully and holistically.”

At a June 2022 Axios event (and pre-FTX implosion), Commissioner Goldsmith Romero cited a need for regulation in digital assets and that “With no regulation in place, fraud gets managed through whistleblowers.”

what you should know: Only two weeks ago, it had  been reported by the WSJ that CFTC Commissioner Kristin Johnson (D) was being considered for the top FDIC role. It was potentially an intriguing choice for digital assets: Johnson has shown a willingness and interest in working with the digital assets industry and would be an about-face from Chair Gruenberg’s rumored “Choke Point 2.0” strategy.  But, Johnson has also already been recommended by Ranking Member Maxine Waters (D, CA) for the Assistant Secretary for Financial Institutions position at U.S. Treasury – another job that Goldsmith Romero was reportedly being considered for (see Politico in February).

CFTC Commish – timing

The timing of the WSJ “leak” on Monday about Commissioner Goldsmith Romero becoming FDIC Chair could also be tied to today’s House Financial Services (HFS) Committee hearing titled, “Oversight of the FDIC’s Failed Leadership and Toxic Workplace Culture.” See the hearing page.

Republicans and Democrats, alike, have shown interest in digging much deeper into the details of the FDIC scandal. This hearing will presumably not make the White House look good to its Democratic base if the White House isn’t showing a willingness to replace Chair Gruenberg.

Sen. Warner’s bill

A Surprise, Game-Changing Crypto Bill Could Be About To Quietly Blow Up The Price Of Bitcoin, Ethereum And XRP – Forbes

still more tips

Opinion: The Gensler SEC Loses Again – The Editorial Board, The Wall Street Journal

Just Don’t Call It Blockchain: Apple’s New AI Privacy Tech Explained – Decrypt

Uncertainty looms for crypto industry and stablecoins ahead of key EU MiCA deadline – The Block