Sen. Gillibrand on stablecoins
On Friday, Senator Kirsten Gillibrand (D, NY) appeared at Messari Capital’s Mainnet crypto event in New York City on Friday and talked all things digital assets in a conversation with Crypto Council of Innovation’s Sheila Warren. Sen. Gillibrand was remarkably positive about legislation momentum in spite of what may look like Capitol Hill gridlock due to a divided government. Senator Gillibrand is co-sponsor of the Lummis-Gillibrand Responsible Financial Innovation Act and a member of the Senate Agriculture and Intelligence Committees.
Gilibrand cut to the chase: “…passing a stablecoin bill is the low hanging fruit and we should absolutely try to do that this Congress (by the end of ‘24). I also think that passing a market structure bill is possible this Congress and so those two pieces would be the highest priority. We’ve already done the anti-money laundering and know-your-customer and anti-terrorism financing provisions in the defense bill (see NDAA amendment). It’s there. It’s workable, it’s smart, and it can be implemented. So, I would really hope that we can create a national conversation around at least the two next pieces, because it would make a huge difference. And there’s such a willingness on behalf of the leaders. In the House and the Senate to do this. We just need to create consensus and create momentum with other members understanding what’s at stake and why it’s important.”
Suggesting that the lightweight NDAA amendment covers the AML-KYC piece for digital assets seems to challenge the scope of – and growing number of co-sponsors for – Senator Elizabeth Warren’s (D, MA) “Digital Asset Anti-Money Laundering Act.”
Nevertheless, Gillibrand didn’t hesitate on discussing what’s at stake: “If we can regulate, we can keep markets and we can keep participants. It allows our economy to grow, allows us to compete worldwide, and that’s better for New York, it’s better for America.”
Crypto is growing up: Goodbye yacht parties and NFTs, hello regulation and practical tech – Insider
Rep. Torres on progressives
Rep. Ritchie Torres (D, NY) also appeared at Mainnet on Friday and did not hold back on criticism of fellow Capitol Hill progressives who oppose the innovation he’s seeing in digital assets. In a fireside chat with venture capitalist Fred Wilson, Rep. Torres said, “It seems obvious to me that the project of decentralizing the Internet and decentralizing finance is profoundly progressive… there are progressives who complain about the centralization of power in finance and technology. But then those same people were opposing the very technology that would solve that problem.”
Rep. Torres is a member of the House Financial Services (HFS) Committee and was among four Democrats who voted for both the stablecoin and digital asset market structure bills during the HFS markup in July.
Later, Torres shared that he thinks the digital assets industry needs to show better leadership when it come to education:, “What I find fascinating about crypto, is that it’s something of a Rorschach test. You can project your own ideological biases onto crypto. So for libertarians crypto is a tool for radical independence from the government from the establishment. But for progressives like me, it’s a tool for lifting up the most vulnerable people in our society. [Take] something like stablecoins [which] can give the most impoverished countries in the world access to a stable currency or could enable immigrants to transfer their money without paying exorbitant fees. And so I feel like the crypto industry – and I’m going to give an honest criticism – has a powerful progressive story to tell. But there’s been a fundamental failure [in] telling it…”
Finally, speaking to the decentralization supplicants in front of him, Rep. Torres said, “I believe that a world governed by code is far more equitable than one governed by centralized entities.”
Novogratz on Warren
Also speaking at Mainnet was Mike Novogratz, a well-known Democratic supporter and CEO of crypto investment firm Galaxy Digital.
Novogratz, like Torres, was critical of progressives and went a step further by singling out popular crypto villain Senator Elizabeth Warren (D, MA) and her anti-crypto position. Read more here from Caitlin Long CEO of Custodia who captured Novogratz’s claims. This isn’t the first time the Galaxy Digital CEO has tried to lock horns with the Senator – e.g. this tweet back in early April.
Novogratz also said he expected that a Bitcoin ETF would be approved in October.
The Bucshon bill
Last week’s House Energy and Commerce’s (E&C) Innovation, Data, And Commerce Subcommittee hearing on supply chains deserves another look as the still untitled bill from Rep. Larry Bucshon (R, IN) involving blockchain technology speaks to wider business use cases beyond the cryptocurrrency realm. The Committee’s repository has the latest and greatest of the Bucshon bill here.
Reviewing Section 3 of the bill which refers to blockchain technology: “The Secretary of Commerce shall establish in the Department of Commerce a program to be known as the ‘National Blockchain Promotion and Deployment Program.'”
This isn’t just another study. According to the bill’s text, the Secretary of Commerce would be “the principal advisor to the President for policy pertaining to the deployment, use, application, and competitiveness of blockchain and other distributed ledger technologies; and to take, acting through the National Blockchain Promotion and Deployment Program, actions necessary and appropriate to promote and assist the deployment, use, application, and competitiveness of blockchain and other distributed ledger technologies, including by— (A) assisting the private sector in the deployment of technologies needed to advance the capabilities of blockchain and other distributed ledger technologies; (B) developing policies and recommendations on issues pertaining to blockchain and other distributed ledger technologies, including the use of blockchain and other distributed ledger technologies with respect to online privacy, data security, cybersecurity, and supply chain resiliency; (C) supporting and promoting the stability, maintenance, improvement, competitiveness, expansion, and security of blockchain and other distributed ledger technologies…” And, the list continues. Ultimately, the Secretary of Commerce is held accountable for managing the program by reporting out its results in detail.
The Democratic minority’s bill “Supply CHAINS Act,” which was introduced in February, was described at the Subcommittee hearing as “more comprehensive” then Bucshon’s bill by E&C Ranking Member Frank Pallone (D, NJ). But, there is no discussion of incorporating blockchain tech in the Democrats’ bill, the text of which goes only as deep as “manufacturing technology.”
how many votes
Coinbase and its “Stand With Crypto” non-profit are bringing a “grassroots” crypto campaign to D.C. on Wednesday. Read more.
The campaign claims it’s hoping to convert a small percentage of 52 million cryptocurrency owners “Into An Army of One Million Advocates For Change.”
The real question is.. how many crypto owners are single issue voters?
With the general election in 2024 looking evenly split, it doesn’t need to be a large percentage of 52 million U.S. crypto owners to swing an election one way or the other. At last week’s Messari Capital Mainnet event, Coinbase representatives were hopeful that even 1% of voters (520,000 by Coinbase metrics) would be a powerful force.
“Count me as someone who believes AI should not be regulated. We need to make progress on AI as fast as possible for many reasons (including national security). And the track record on regulation is that it has unintended consequences and kills competition/innovation, despite best intentions.” – Coinbase CEO Brian Armstrong on X
‘SEC Oversight’ actions
This Wednesday at 10 a.m. ET, House Financial Services (HFS) will host Securities and Exchange Commission (SEC) Chair Gary Gensler in a hearing titled, “Oversight of the Securities and Exchange Commission.” Read more on the HFS hearing page.
Staff Accounting Bulletin 121 (SAB 121), the SEC’s rulemaking on the definition of an exchange and digital asset custodial requirements are among the topics that may be examined at the hearing according to the Committee’s memorandum. See it.
Many expect Chair Gensler’s appearance (and the “Stand with Crypto” day) to coincide with additional enforcement actions by the SEC against crypto companies. Coinbase points to the work of Fortune reporter Jeff John Roberts which maps congressional hearings to SEC actions. View the map on X.
The SEC enforcement action against Coinbase may be the most notable of all and synced to a House Agriculture hearing with Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam in June.
why not stablecoins?
American Banker’s Kyle Campbell takes a look at the pushback in the Federal Reserve to stablecoins. Joseph Silvia, of law firm Dickinson Wright and a former counsel at the Federal Reserve Bank of Chicago, offers his point-of-view, “It seems like [The Fed] would be looking for a bank that is devoid of other risks so that it could focus on the risks with respect to banking in the stablecoin industry. That just doesn’t exist. Banks are risk management entities.” Read more.
still more tips
Vivek Ramaswamy Is Drafting a ‘Crypto Policy Framework’ – CoinDesk
Tokenizing real-world assets on blockchains is for crypto lovers as well as crypto skeptics now – CNBC
Crypto funding: Startups raise $115M across gaming, custody, and institutional services – Blockworks
Crypto Exchange Binance, CEO Zhao Ask Court to Dismiss SEC Suit – Bloomberg