stablecoin rules – Waters
With the news of PayPal’s stablecoin breaking on Monday, and then the Federal Reserve conveniently introducing new crypto rules for banks a day later, yesterday, House Financial Services (HFS) Ranking Member Maxine Waters (D, CA) kept up the drumbeat of pushback by Democratic leadership on the new stablecoin bill.
“I am deeply concerned that PayPal has chosen to launch its own stablecoin while there is still no Federal framework for regulation, oversight, and enforcement of these assets,” began Waters in her statement released on the Democrats’ House Financial Services website. Later, she doubled down on rejection of the stablecoin bill and what could be construed as a message from the White House: “As I said during last month’s markup, the Republican bill has no chance of actually being signed into law, and I urge Chair McHenry and Committee Republicans to come back to the negotiation table…” Read more.
On Monday, HFS Chair Patrick McHenry had come out in support of PayPal’s new stablecoin efforts.
stablecoin rules – Waters history
It was only last March that Waters was fully supportive of moving a stablecoin bill forward “as quickly as possible” and then suddenly, at the first HFS stablecoin hearing in April, came her about-face with Rep. Stephen Lynch (D, MA), Ranking Member of the Committee’s Subcommittee on Digital Assets, Financial Technology and Inclusion, stridently backing her up.
Apparently, the White House had changed Waters’ mind on the stablecoin bill’s efficacy. Waters claims the division of powers between federal and state authorities when it comes to a stablecoin regime needs to tilt decidedly Federal. A roadblock in all this is the largest state authority, the New York Department of Financial Services, which is trying to cling to its power. This struggle resulted in New York State Representatives Ritchie Torres (D) and Rep. Gregory Meeks (D), among 3 other Democrats, to defect from Democratic leadership’s vote against the stablecoin bill at July’s markup hearing.
stablecoin rules – progress
DC digital assets counsel Jess Cheng of Wilson Sonsini offers her take on the Feds new crypto rules for banks. She sees positive “progress” from the Fed in terms of addressing the innovation element of the new rules. In a LinkedIn post, she writes, “The Fed is, in essence, saying here are the potential crypto-related activities we see for banks, and banks engaging in these activities are expected to manage risks. And, implicitly, none of these crypto activities would have made it into the SR-Letter if they were flat-out not legally permissible. This new information may be subtle, but as we’ve seen with crypto, small shifts often lead to even bigger change.” Read a bit more.
stablecoin rules – states
Chamber of Digital Commerce policy executive Cody Carbone talks to Blockworks’s Casey Wagner about how the new stablecoin bill differs with the new Fed rules announced Tuesday by the Federal Reserve.
Carbone says, “The House bill ‘doesn’t just give the Fed power to sit and stall or not issue responses. (…) The big kicker in the House bill that the Fed doesn’t like is that they aren’t given unilateral supervisory authority over state regulated non-bank issuers.'” Read more.
more tips:
Stablecoin Market to Soar to Almost $3T in Next 5 Years: Bernstein – CoinDesk
stablecoins = world’s reserve currency
In a Wall Street Journal op-ed provocatively titled, “Stablecoins Can Keep the Dollar the World’s Reserve Currency,” Valor Capital Group’s Brian Brooks and Charles Calomiris argue that the new “McHenry” stablecoin bill approved by the HFS Committee is a “good place to start.”
“Stablecoins could be to finance what Voice of America has been to diplomacy. They can communicate U.S. monetary policy directly to the people living in other countries, when American efforts to engage other governments aren’t succeeding…” write the duo. Read it.
Brooks was the acting U.S. Comptroller of the Currency, 2020-21, and chief legal officer of Coinbase from 2018-20. Calomiris is dean of economics, politics and history at the University of Texas-Austin and served as chief economist of the Office of the Comptroller of the Currency, 2020-21, according to the WSJ.
SEC’s Ripple appeal
The SEC appeal of July’s Ripple case ruling is here. Fox Business reporter Eleanor Terrett breaks the news on X, “The [SEC] has filed a letter of intent to request an interlocutory appeal to Judge Torres’s July 13th summary judgment in the [SEC] vs. Ripple case.” See her tweet.
And, view the appeal filing (PDF).
According to the letter of intent, the SEC “proposes a briefing schedule whereby the SEC files its opening brief on August 18, 2023, which is two days after Defendants’ response to this letter is due, Defendants’ opposition is due 14 days thereafter pursuant to Local Rule 6.1 on September 1, 2023, and the SEC’s reply is due 7 days thereafter on September 8, 2023.”
Russian CBDC
The Bank of Russia is inching closer to a Central Bank Digital Currency (CBDC) as Cointelegraph reports that 13 banks and a short list of their clients have been authorized for a CBDC test which begins August 15. “Those taking part in the pilot initiative will have the opportunity to employ digital rubles for payments at 30 retail establishments situated across 11 cities in Russia. The intention is to broaden the roster of pilot participants by the conclusion of 2023, encompassing the inclusion of both individuals and businesses,” says Cointelegraph. Read more.
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Regarding new Ripple trial in Q2 2024: “The jury will only be debating whether or not [Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen] aided and abetted [Ripple] in selling unregistered securities. Torres’s summary judgment decision still stands…” – Eleanor Terrett of Fox Business on X
Ex-FTX Executive Salame Talking to Prosecutors About Plea Deal – Bloomberg
Tokenized Coinbase Stocks Are Coming to Polygon Thanks to Backed Finance – Decrypt
Using Blockchain in Data Tokenization (PDF) – Capgemini
Galaxy Chief: Spot Bitcoin ETF ‘A Question of When, Not If’ – The Wall Street Journal