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today’s HFS showdown
Today is the day for the long-awaited Securities and Exchange Commission (SEC) oversight hearing by House Financial Services Committee led by its Republican majority. SEC Chair Gary Gensler will undoubtedly be grilled by the Republican side about digital assets and climate initiatives the SEC has undertaken recently as well as a general lack of responsiveness according to Republican members. See last week’s letter (PDF) from HFS Chair Patrick McHenry (R, NC) and Oversight Subcommittee Chair Bill Huizenga (R, MI).
The hearing will begin at 10 a.m. ET today at the Rayburn House Office Building and the agenda as well as live webcast can be found here.
How Democrats act or react during the hearing may be of more interest. Will it be a full-blown defense of Chair Gensler and therefore the Biden Administration? HFS Ranking Member Maxine Waters (D, CA) will likely be leading the defense. Or will they join the Republican critique in any way?
stablecoin hearing – another witness
Another witness has been added to tomorrow’s HFS Subcommittee on Digital Assets, Financial Technology and Inclusion hearing “Understanding Stablecoins’ Role in Payments and the Need for Legislation.” Delicia Reynolds Hand, Director, Financial Fairness, Consumer Reports will join four industry members. Agenda here.
According to a 2022 press release announcing her new role at Consumer Reports, Ms. Reynolds experience includes 10 years at the Consumer Financial Protection Bureau. And prior to that time, she served as Senior Counsel to Rep. John Sabanes (D, MD). Read the release.
more tips:
The addition of Reynolds, another Democrat, to the witness list (NYDFS’ Adrienne Harris is a Dem) emphasizes the importance of cultivating bipartisanship support for the new stablecoin bill (PDF) by HFS Chair McHenry in partnership with Ranking Member Waters. A divided Congress demands cooperation across the aisle for successful passage of any legislation.
UK – stablecoin exploration
Coming on the heels of new U.S. stablecoin legislation in House Financial Services, The Bank Of England’s Jon Cunliffe outlined in a speech on Monday four areas the UK’s version of the U.S. Federal Reserve is exploring as it relates to the tokenization of money: stablecoins for payments; tokenisation of commercial bank deposits, the Digital Pound; and, the last is “the Bank’s work to ensure these new forms of money are robust and uniform” – so, stable.
Read: “The shape of things to come: innovation in payments and money” − speech by Sir Jon Cunliffe, Deputy Governor of the Bank of England for Financial Stability.
And, see Cunliffe’s bio.
CNBC reviews the speech and notes, “The Financial Services and Markets Bill, which is currently working its way through the U.K. parliament, already includes some provisions on cryptocurrency. That specific law, which is not yet in force, aims to bring asset-backed stablecoins into the regulatory fold.” Read that one.
more tips:
Financial Services and Markets Bill – Parliament.UK
UK – global goals
Coinbase CEO Brian Armstrong published pictures on Twitter yesterday of his meeting with UK Economic Secretary and City Minister Andrew Griffith. Armstrong tweeted, “The UK is moving fast on sensible crypto regulation to both drive economic growth AND consumer protection. Excited to keep investing in the UK.” See it.
Armstrong also pointed to a company blog post titled, “The UK as a Web3 innovation hub” which emphasizes Coinbase’s global goals -not just the United States. Today, Armstrong will appear at UK’s Fintech Week and be interviewed by former Chancellor of the Exchequer George Osborne. The blog post said it is “an example of just how seriously we are working in the region. ”
But, Armstrong did not hold back criticism of the UK government’s strategy to-date tweeting:
“1) Some UK banks are blocking fiat payments to crypto companies which is not ok. Good fraud controls make sense, a blanket ban does not (and is likely not lawful). Needs further education and collaboration.”
“2) The Financial Promotion regime goes too far if there is a 24 hr ‘cooling off’ period for crypto trades (harms real world use cases, formation of capital markets, and consumers.”
crypto exchange complaint
After a story on Saturday by The Wall Street Journal exposed a coming lawsuit, the Securities and Exchange Commission (SEC) announced Monday an enforcement action against crypto exchange Bittrex.
The agency accuses Bittrex of failing to “register as a national securities exchange.” It also says that CEO William Shihara knowingly listed tokens which might fall under the definition of security. To do so, Shihara is alleged to have had token applicants for his exchange “delete statements” (presumably on the token’s promotional websites) such as “‘price prediction[s],’ ‘expectation of profit,’ and other ‘investment related terms,'” says the SEC.
The complaint also idenitifies certain tokens as securities such as Algorand, which calls into question the method used by the SEC for classifying a digital asset as a security. Also of note, Bittrex has already said they’re leaving the U.S. market. Read more on CoinDesk.
more tips:
SEC Charges Crypto Asset Trading Platform Bittrex and Its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency (Litigation Release) – SEC.gov
states – regulation isn’t free
New York State is continuing to push ahead with virtual currency regulation as the New York Department of Financial Services (NYDFS) announced on Monday. Superintendent of Financial Services Adrienne Harris touted that NYDFS will now “collect supervisory costs from licensed virtual currency businesses, similar to other licensees regulated by DFS. This regulation will allow the Department to continue adding top talent to its virtual currency team to continue efficient and effective regulatory oversight.” If you have a New York State BitLicense, this will now be an additional cost. Read more. And, see all the fees.
more tips:
Virtual Currency Assessments – Text of 23 NYCRR Part 102 – dfs.ny.gov
Virtual Currency Assessments – Notice of Adoption – dfs.ny.gov
Virtual Currency Assessments – Assessment of Public Comments – dfs.ny.gov
opinion
Who Really Benefits From CBDCs? It’s Not the Public – Nicholas Anthony and Norbert J. Michel, Cato Institute on CoinDesk
This is crypto’s moment of truth. We must choose utility over speculation. – Dante Disparte, Circle on American Banker
more tips
Digital dollar meets a populist “pre-lash” – Politico
Apple unveils savings account – The Hill
Citi India processes letter of credit on blockchain, cuts time by 90% – Times of India
Crypto transparency: Fractal raises $6 million to reshape market structure – The Block
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