FedNow Versus Stablecoin Debate; Emmer Raises More FDIC-Crypto Concerns

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give up all the crypto

Majority Whip Rep. Tom Emmer (R, MN) continued to keep the focus on bank regulators yesterday after sending a letter to FDIC Chairman Martin Gruenberg, a Democrat, on Wednesday. Emmer tweeted a Reuters article and pulled the following quote: “Any buyer of Signature must agree to give up all the crypto business at the bank, the two sources added.” Read Reuters (subscription). And, read Decrypt.

Hearings seem inevitable in the House on the oft-alleged “Choke Point“-like initiative within the U.S. government. Hearings may be tempered with a bipartisan desire to successfully drive legislation (such as stablecoins) through Congress and to the President’s desk for signature.

On the other hand, Rep. Emmer tweeted later, “It’s clear the Biden administration is weaponizing market chaos to kill crypto.” See Emmer’s interview on Fox.

FedNow – this summer

“Instant” payments product FedNow developed by the Federal Reserve is expecting to roll out in July. See the announcement from Wednesday.

Axios covers the Federal Reserve’s imminent rollout of FedNow and suggests that it may go head-to-head with crypto: “Advocates of a central bank digital currency (CBDC) say adoption could, for one, facilitate faster payments. FedNow, at least domestically, may fill that gap – possibly removing a key part of the pitch for the U.S. to adopt a CBDC.” Read more.

FedNow – stablecoins

So, what’s the difference between FedNow and a stablecoin such as USDC? Cointelegraph says the stablecoin uses blockchain technology and FedNow does not. Read more. So blockchains are immutable, offer an on-chain record of transactions, decentralized, trustless, permissionless?… it will be interesting to see this argument – FedNow vs. stablecoins – unfold with the arrival of FedNow in the summer. Can you buy Bitcoin with FedNow?

FedNow – why now

Under Secretary for Domestic Finance Nellie Liang promoted FedNow’s safety last year in addition to its speed, “Because FedNow relies on the banking system, there already are safeguards for consumers and businesses. Bank-based money usually has deposit insurance and banks are generally eligible to obtain access to the lender of last resort. These two backstops help to ensure that bank money is not runnable.” Read more.


Industry organization Blockchain Association (BA) announced that it is confronting “debanking” efforts within the United States government. BA’s Chief Policy Officer Jake Chervinsky said on Twitter that his organization has “sent FOIA requests to the Fed, FDIC, and OCC, demanding information about the unlawful debanking of crypto companies. We are also collecting evidence of debanking…” Read the thread. And, read BA’s press release.

next week – Congress

Beginning next Wednesday, the House is back in session along with the Senate for 7 days before adjourning for a 2-week recess. See the calendar from Roll Call (PDF).

Given House Financial Services Ranking Member Maxine Waters (D, CA) comments on Tuesday, more action around stablecoin legislatioin seems possible.

next week – DC Blockchain Summit

Next Tuesday, Chamber of Digital Commerce will re-convene the DC Blockchain Summit. Majority Whip Rep. Tom Emmer, Digital Assets Subcommittee Chair Rep. French Hill (R, AR) and Rep. Pete Sessions (R, TX) are scheduled to appear. And panel discussions include “The U.S. Government’s View of the Cryptocurrency Landscape.” Participants are:

    • Sanjeev Bhasker, U.S. Digital Currency Counsel, Digital Currency Initiative, U.S. DOJ, Money Laundering & Asset Recovery Section/NCET
    • Matt Cronin, Director of National Cybersecurity, Office of the National Cyber Director
    • Sandra Lee, Deputy Assistant Secretary for the Financial Stability Oversight Council, Department of Treasury

See the full-day agenda.

Senator Warren

Receiving a million impressions and counting, Senator Elizabeth Warren (D, MA) published another tweet reiterating her anti-crypto stance last night: “It’s no wonder the American people are skeptical of a system that holds millions of struggling student loan borrowers in limbo but steps in overnight to ensure that billion-dollar crypto firms won’t lose a dime in deposits.” It is unclear which crypto firms she is identifying.

zero-knowledge proof

The Block reports that the European Parliament has passed new legislation to give European citizens control of their digital identity: “The legislation includes zero-knowledge-proof technology to protect users’ privacy. ZK-proof protects privacy by verifying a position without revealing unnecessary data.” But, all is not perfect with the legislation as the Brussels-based International Association for Trusted Blockchain Applications has pushed back on the removal of “electronic ledgers” from the proposed regulation. Read more.

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