November Digital Assets Floor Vote Back On?; Wholesale CBDC Possibilities

November floor vote?

With the government shutdown drama arguably delayed until at least November 15, the House vote on the stablecoin (“Clarity for Payment Stablecoins Act of 2023“) and digital asset market structure (“Financial Innovation and Technology for the 21st Century Act“) bills seems back on track.

Prior to Saturday, crypto bills had been thought to be getting “pushed.”

Then again, how much the shutdown has distracted pro-crypto House members and their staffs, led by House Financial Services (HFS) Chair Patrick McHenry (R, NC) and HFS Digital Assets Subcommittee Chair French Hill (R, AR), from educating their House colleagues on digital assets in advance of a vote, would appear to be another potential roadblock to House passage this year.

And then there’s that cannibis legislation in the Senate. Is that the way through the Senate as Democratic leadership (White House, Senate Banking and Chair Sherrod Brown (D, OH), HFS Ranking Member Maxine Waters (D, CA))  “horse trades” new cannibis banking law for stablecoin law? Senator Kirsten Gillibrand (D, NY) said last week she thinks something is possible.

Meanwhile, Rep. Mike Flood’s (R, NE)Uniform Treatment of Custodial Assets Act” with its bipartisan HFS Committee support looks like a potential candidate for another markup by House Financial Services. Flood’s bill would nullify the controversial Staff Accounting Bulletin 121 (SAB 121) by the Securities and Exchange Commission (SEC) which has inhibited custody services by heavily-regulated TradFi banks. Democrats, who are frustrated with SEC overreach led by its Chair Gary Gensler, could be most easily convinced on this straightforward bill.

ETH futures’ implications

There is a potential for nine (9) Ethereum Futures ETF (exchange-traded fund) launching today according to Bloomberg’s James Seyfartt. See his list on X.

These are “futures” ETFs versus spot market ETFs. But still, the tide may be turning at the Securities and Exchange Commission (SEC) as Willkie Farr digital assets counsel Mike Selig puts the news in perspective, “The ripple effect of the Grayscale decision is massive. SEC would have faced similar legal challenges for denying ETH futures ETFs. By approving an ETH futures ETF, the SEC effectively concedes ETH is not a security.” Read a bit more on X.

more tips:

Valkyrie Gets Approval to Start Buying ETH Futures for Its Existing Bitcoin ETF – CoinDesk

Fed conference takeaways

Crypto executive Zach Wong attended last Friday’s “The Fourth New York Fed Conference on Fintech: Artificial Intelligence and Digital Assets” and came away with four key takeaways. Overall, Wong says the day-long event’s focus on the use of artificial intelligence and digital assets in financial services provided unique insights.  But, Wong’s four key takeaways from the event begin with “#1 – Cryptoasset scholarship is mature, serious, and fascinating.”

Wong explains, “When I first got into crypto, I was surprised at the depth of multi-disciplinary intellectual investigation I encountered. While not always at the forefront of the industry’s attention, I’m consistently impressed by not just the quantity of interesting economic, social, political, regulatory, and philosophical questions prompted by this strange technology but also the quality of people thinking about them. I felt that again last Friday.”

Read more, and his other takeaways, here.

use case: identity

Brazil is introducing a new program which will utilize blockchain technology to enable an identification system for the country. Cointelegraph explains, “… the national ID project is crucial in targeting organized crime, allowing government sectors to work together, offering a simpler way to access services and streamlining administrative records.” Read more about the details. The country is all on the verge of a Central Bank Digital Currency (CBDC) says Cointelegraph.

wholesale CBDC

With a provocative title, “Is the recent Fed paper on wholesale CBDC about Congressional approval?,” Ledger Insights looks at the weeds of a potential roll-out of a CBDC in the United States and writes, “One perspective is that the Fed doesn’t believe it needs Congressional approval for a wholesale CBDC. Another view proposed to Ledger Insights recently is that the Fed has conceded it needs approval for retail, but has simply not yet conceded on wholesale. That sentence in the paper may or may not support that view.”

The sentence in question is from a Federal Reserve paper on CBDCs published on September 8 which reads, “In order to be distinct from existing central bank money, a new central bank liability would need to have a different legal structure and be recorded on the central bank balance sheet separately from the DI (depository institution) balances held in master accounts.” Read more from Ledger Insights.

lawyer event

Fordham Law is producing its “Blockchain Regulatory Symposium” today on the Upper West Side of New York City.   The agenda gathers the crypto legal community for discussions on a variety of today’s hottest legislation topics (For example: how is crypto’s decentralized infrastructure gonna play out in a centralized traditional finance system?).

See the agenda.

The featured morning discussion with Senator Kirsten Gillibrand has the potential for news in that it could build on her bullish comments about digital assets law possibilities at the Messari Capital Mainnet event two weeks ago.  Lewis Cohen, Co-Founder of DLx Law, will interview the Senator.

crime blotter

CFTC Charges Four Individuals and a Seychelles Company with Operating a Fraudulent Digital Assets Trading Scheme and Misappropriation –

A Founder of the Crypto Hedge Fund Three Arrows Capital Is Arrested – The New York Times

The Star Witness at Sam Bankman-Fried’s Trial: His Top Deputy and Ex-Girlfriend – The Wall Street Journal

still more tips

Kevin O’Leary Predicts This New Regulatory-compliant Crypto Exchange Will Surpass Binance And FTX – Benzinga