state of stablecoins
It’s starting to become clear that the front lines of the stablecoin legislation battle in House Financial Services (HFS) is being fought in the state of New York.
That’s no surprise given Ranking Member Maxine Water’s (D, CA) position (and the White House’s position) on the Federal agencies having the last word on stablecoin registrations. The robust state stablecoin regime currently available through the New York Department of Financial Services (NYDFS) and led by Superintendent Adrienne Harris says a state framework can work – potentially without the Federal “last word.”
Remember that awkward moment in April when Superintendent Harris told Ranking Member Waters about New York’s stablecoin framework at an HFS stablecoin hearing to Waters’ surprise?
Rep. Ritchie Torres (D, NY) and Rep. Gregory Meeks (D, NY) votes in support of the stablecoin bill coming out of the HFS Committee markup last week reinforce the bipartisan interest in preserving state’s rights when it comes to stablecoins.
Punchbowl News’ Brendan Pedersen reported yesterday on NYDFS’s involvement in the stablecoin bill and speaks to Rep. Torres, who said, “New York members, such as myself, take our guidance from Adrienne. If she were dissatisfied with the state option in the bill, then I would have trouble supporting it.”
And then there’s the separate intrastate battle which NYDFS and Superintendent Harris are waging with New York State Attorney General Letitia James. There was a lof of fanfare when James issued her own legislation (CRPTO) to address the crypto industry – seemingly circumventing NYDFS and Harris. But, with expectations of a June ratification of sorts in New York State’s assembly having quietly fallen by the wayside, nothing has come of James’ legislation thus far.
size of stablecoins
The world’s largest stablecoin, Tether, published it’s 2Q 2023 “Attestation report” saying that it had a “net profit of $850 million in the second quarter, less than the $1.5 billion it reported in the previous period” – read more in The Block. Total assets were reported at $86.5 billion versus total liabilities of $83 billion for the second quarter.
The stablecoin company says its report is verfiied by BDO, a “global independent public accounting firm.”
Tether Second Quarter Attestation Report – Tether.io
SEC tried halting crypto
In an interview with the Financial Times, Coinbase CEO Brian Armstrong revealed that Securities and Exchange Commission (SEC) staff asked Coinbase to stop selling all 200+ tokens besides Bitcoin just prior to suing the crypto company. The next step? Armstrong said, “It kind of made it an easy choice . . . let’s go to court and find out what the court says.” Read more.
In the self-hosted wallet debate, Rep. Warren Davidson’s (R, OH) [H.R. 4841] “Keep Your Coins Act” is inspiring deeper examination of the role of privacy, freedom and the need for anti-money laundering remedies in finance.
Davidson’s bill was approved last Thursday along party lines during the House Financial Services markup hearing and will now head to the House floor vote.
Ledger Insights summarizes the self-hosted wallet debate in the House: “The Democrats see self-hosted wallets as aiding tax evaders, money launderers, drug traffickers and other criminals. Republicans believe self-custody preserves basic freedoms in a digital world.” Where does cash fit in here?… read more.
The Securities and Exchange Commission (SEC) rolled out a lawsuit yesterday against Richard Schueler (a.k.a. Richard Heart) and three entities he controls for “conducting unregistered offerings of crypto asset securities that raised more than $1 billion in crypto assets from investors.” Schueler is well-known in the crypto community for his Hex token as well as his brash, abrasive style which apparently also included a penchant for expensive toys.
The SEC’s release explains that as a result of his unregistered securities offerings, Mr. Schueler owned “sports cars, watches, and a 555-carat black diamond known as ‘The Enigma’ – reportedly the largest black diamond in the world.” Read more.
IRS on staking
The Internal Revenue Service (IRS) is trying to keep up with the intricacies of cryptocurrency taxation. In a release of a ruling to be published in Internal Revenue Bulletin in mid-August, the IRS tackles rewards for Proof-of-Stake mining.. e.g. Ethereum staking rewards.
In an IRS GuideWire email yesterday, the IRS provided guidance beginning with the question:
“If a taxpayer that uses a cash method of accounting (cash-method taxpayer) stakes cryptocurrency native to a proof-of-stake blockchain and receives additional units of cryptocurrency as rewards when validation occurs (validation rewards or rewards), must the taxpayer include the value of the rewards in the taxpayer’s gross income and, if so, in which taxable year?”
Efforts such as Lewandowski’s would seem to merge with the current request-for-comment by Senate Finance Chair Ron Wyden (D, OR) and Ranking Member Mike Crapo (R, ID).
see more tips
What the crypto industry’s rebound illustrates – Politico
Opinion: Pass The Stablecoin Bill Now – Austin Campbell on CoinDesk
Commissioner Pham Announces Executive Staff Appointments – CFTC.gov
Robert F. Kennedy Jr: Bitcoin Energy Concerns Should Not Be Used as ‘Smokescreen’ to Limit Freedom – Decrypt