digital assets delayed
House Financial Services Chair Patrick McHenry (R, NC) appeared on CNBC’s Squawk Box yesterday morning and expressed frustration with his caucus as well as a defiant hope that it was still possible to move legislation this year in spite of Congressional gridlock. Digital legislation is delayed in 2024, most assuredly.
From the interview:
Chair McHenry: “Look when the House basically attempted to commit political suicide – Republicans in the House tried to commit political suicide in the fall – it gummed up three or four months of House Floor action. So, I’ve got major policies in capital formation, data privacy and crypto that we haven’t moved across the House floor. And I intend to get those moves across the House Floor this year. We can still do big deals -we can still do big deals, even amidst the longest presidential campaign, general election campaign, in American history. We can still get these things done and build consensus and I think there’s a need for market structure on crypto…”
Joe Kernen, CNBC: “The recent ETF and watching the SEC Chair sort of…. kicking and screaming, really …. after, you know, the court said one thing… ‘That’s no way to run a railroad, is it?'”
Chair McHenry: “It’s ineptitude and [the SEC] went kicking and screaming after the courts demanded they take this action. Now, you have more legitimate money coming in, flowing into crypto, some structure being provided to a new asset class that has its problems and needs some clarity – and under federal law – to remedy it.”
“What you see out of Gensler – he’s got 62 rulemakings he intends to do this year. And you have this backdrop of regulatory policy for this Administration that is problematic for them. And they’re having a hard time rebranding what their economic policy is, to the point where they’re sending Administration officials out to try to convince the American people that what they feel they should not actually feel.”
The Chair retires from Congress at the end of the year. You can feel him aching to put a fine point on his legacy but hamstrung by Congressional dysfunction.
what you should know: The prospects for bringing the digital asset market structure and stablecoin bills – let alone many other crypto-related bills – to a House Floor vote seem bleak at this moment. At the end of last year, Republican House leadership had suggested their goal was a vote by Q1 2024 – that seems like wishful thinking today. In the Senate, the machinations of the Democratic majority appears mostly focused on anti-money laundering (AML) legislation for digital assets. Meanwhile, actual law for stablecoins, another goal sought by many, including U.S. Treasury, seems unlikely this year, too.
one more time: ETFs
It appears that the Securities and Exchange Commission will take the same approach it had with Bitcoin spot market ETFs as its new sister, Ethereum spot market ETFs. Both Grayscale and BlackRock had their ETF applications delayed earlier this week.
CoinDesk’s Nikhilesh De notes each filings’ request for comments including a question on an Ethereum ETF’s similarity to Bitcoin ETF: “Do commenters agree that arguments to support the listing of Bitcoin ETPs apply equally to the Shares?…. Are there particular features related to ETH and its ecosystem, including its proof of stake consensus mechanism and concentration of control or influence by a few individuals or entities, that raise unique concerns about ETH’s susceptibility to fraud and manipulation?” Read more.
Crypto Fans Lured by 20% Stablecoin Yields Even After 2022 Bust – Bloomberg
Crypto fans got what they wanted. So why is bitcoin falling? – CNN
Crypto fans mount #BoycottVanguard campaign – Investment News
building for EU markets
U.S.-based enterprise blockchain firm R3 announced a new series of financial market products for the EU called R3 Digital Markets timed with the advance of digital asset regulation in the European Union. Ledger Insights explains, “The timing is opportune given two major capital market initiatives in Europe. The UK has launched its Digital Securities Sandbox this month. In mainland Europe, the European Central Bank is about to start trials using central bank money for DLT settlement.” Read the details.
The new offering addresses “digital currency, digital assets and interoperability” and even includes a CBDC offering according to Ledger Insights.
still more tips
CFTC Staff Releases Request for Comment on the Use of Artificial Intelligence in CFTC-Regulated Markets – CFTC.gov
US Will Sell $117 Million in Bitcoin Seized From Silk Road Drug Trafficker – Decrypt
Bruised by stock market, Chinese rush into banned bitcoin – Reuters
Opinion: Asia is leading the way with embrace of tokenized securities – Nikkei Asia
UK moves to digital pound design phase amid ‘unprecedented’ 50,000-strong privacy debate – DL News