Fed Governor Bowman On Digital Assets; Prometheum Drama Continues

speaking of digital assets – Fed

The “Salzburg Global Seminar on Global Turbulence and Financial Resilience: Implications for Financial Services and Society” is taking place in Salzburg, Austria through tomorrow and its agenda apparently isn’t shying away from digital assets with topics that include the “Digital economy, AI, De-Fi and Fintech.”

Among the presenters, Federal Reserve Governor Michelle Bowman provided a keynote address released yesterday which included a brief comment on digital assets.

Bowman, a Republican, stressed the need for a regulatory framework: “One area in particular that requires attention is the current approach to the supervision of novel banking activities, which leaves financial institutions in a supervisory void. While there have been some efforts to provide guidance, there remains substantial uncertainty about the permissibility of and supervisory expectations for these activities, including banking as a service, digital assets, and other novel activities. This leaves banks in the perilous position of relying on general but non-binding statements by policymakers only to be criticized at some point in the future. The absence of a clear regulatory and supervisory approach creates the risk that regulators may determine novel activities are impermissible or impose new requirements and expectations on these activities after the fact and, for some first movers, after significant investment. If our role is effective supervision and regulation, we must be willing to engage on both the novel and traditional activities.” Read her keynote speech.

speaking of digital assets – CFTC

Commodity Futures Trading Commission (CFTC) Commissioner Caroline Pham will participate at today’s fintech event Point Zero Forum in Zurich, Switzerland. Her panel discussion titled, “State of Global Digital Asset Regulation: Navigating Opportunities in an Evolving Landscape” brings together regulators from European Parliament, Italy and Thailand. See the entire agenda here – much of it is on digital assets.

In another panel at the same event, executives from Citi, Socièté Générale and UBS will tackle “Private vs Public Blockchain for Institutional Use, What Will the Future Look Like?”

Companies are moving ahead with blockchain technology with or without a digital assets-specific regulatory framework in the U.S.

Prometheum drama

The co-founders of Prometheum, one of which was invited by Democrats as a witness to the House Financial Services Committee’s stablecoin and market structure hearing on June 13, responded to previous criticism by Senator Tommy Tuberville (R, AL) on Friday.

Writing to the editors at The Wall Street Journal, co-founders Aaron Kaplan and Benjamin Kaplan wrote: “In ‘Crypto Communism’ Has a New Meaning’ (op-ed, June 7), Sen. Tommy Tuberville expresses concerns about Prometheum’s foreign investor and alleged ties to the Chinese Communist Party. This comes shortly after our subsidiary, Prometheum Capital, was approved as the first special purpose broker-dealer for digital asset securities, an important milestone toward protecting digital asset investors under federal securities laws. Mr. Tuberville’s concerns are without merit.” Read it.

stablecoins – JPMorgan

Already having enabled a US Dollar-backed stablecoin known as JPM Coin within its payment network, JPMorgan started allowing euro-based transfers of JPM Coin last week which allows just-in-time payments for its customers across the Eurozone using blockchain technology. Bloomberg reports, “the bank has used [JPM Coin] to process about $300 billion of transactions since its launch. By comparison, JPMorgan processes nearly $10 trillion of payments overall on a daily basis.” Read more.

stablecoins – SAP

“German software giant SAP is testing Circle’s Ethereum-based USDC stablecoin for clients to tackle difficulties associated with existing cross-border payments,” according to the Block.

A so-called “test drive” of the new stablecoin was initially announced by the enterprise resource planning (ERP) behemoth 10 days ago: “These so called stablecoins are pegged 1:1 to the underlying FIAT currency and collateralized against cash holdings or short-term government securities thus avoiding any fluctuations. Technically, each business partner requires a wallet which in the blockchain world is the equivalent of a bank account.” Read more from SAP’s blog. The supply chain is getting a “taste” of stablecoins.

more tips:

Unrelated to stablecoins, but an interesting post by SAP on “Self-Sovereign Identity.” Read it.

Identity/privacy remain a huge opportunity for blockchain technology innovators.

IMF glass half-full

A new blog post associated with economists from the International Monetary Fund (IMF) opines on the benefits of blockchain-enabled central bank digital currencies (CBDCs) and crypto regulation.  After reviewing current momentum across continents and countries, the IMF economists conclude in part, “While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run. The region should instead focus on addressing the drivers of crypto demand, including citizens’ unmet digital payment needs, and on improving transparency, by recording crypto asset transactions in national statistics.” Read the whole thing. And, read Forbes which notes the IMF’s past skepticism.

DeFi – UK crypto taxes

Meeting Thursday’s deadline, industry organization DeFi Education Fund lent its comment to the  United Kingdom’s HMRC regarding a public consultation by the UK financial agency on DeFi taxation rules “involving the Lending and Staking of Cryptoassets.”

See the comment (PDF).

According to a tweet from DeFi Education Fund, the “letter argues that any tax rules that implicate DeFi must: Be flexible to account for future innovation; Exhibit clarity/simplicity to promote compliance by minimizing burdens on taxpayers; and, Align with the underlying economic substance of a typical DeFi transaction.” Read the Twitter thread.

DeFi – switching to offense

Capital Account, a publication which closely tracks the machinations of the Securities and Exchange Commission (SEC) among other financial regulators, provided an interview over the weekend with DeFi Education Fund’s new lawyer, Amanda Tuminelli. The publication asks why DeFi Education Fund needs a lawyer, “The intention in hiring a chief legal officer was to start thinking about our proactive litigation efforts. I do work on some policy…but we also are very actively considering bringing impact litigation in the near future. That’s what we’re really excited about.” Read the Q&A.

see more tips

The Super Connector Who Built Sam Bankman-Fried’s Celebrity World – The New York Times

Coinbase Wins Supreme Court Ruling in Arbitration Lawsuit – CoinDesk

He lost $340,000 to a crypto scam. Such cases are on the rise – NPR

A Crypto Side Door: Buying a ‘Digital Residency’ in Palau for $248 – The Wall Street Journal

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