blockchain tipsheet

White House door opens

Bharat Ramamurti, who was considered among crypto’s most strident critics within the White House and a member of its National Economic Council, has left and may open the door for stablecoin law.

As you may recall, negotiations on the stablecoin bill were nearly complete in July as a vote at the House Financial Services markup approached, but it’s believed Ramamurti helped undermine any support from Democratic leadership and, therefore, the White House.

Fortune’s Leo Schwartz reported this week that Lael Brainerd, head of the President’s National Economic Council, is more open to negotiations. A former House staffer with knowledge of past White House negotiations tells Schwartz,  “I one hundred percent believe that there’s more of a path forward than there was before (…) It opens the door for this to be a more methodical, realistic conversation.” Read more.

threat to bipartisanship

Rep. Wiley Nickel (D, NC) is apparently taking some heat from Republicans as the North Carolina congressmen attempts to raise money for his campaign war chest. A tweet from National Republican Congressional Committee (NRCC) press secretary Delanie Bomar takes issue with Nickel’s recent vote – which aligned with the entire Democratic caucus – to oust Speaker Kevin McCarthy (R, CA) this week. Continue reading “White House Door Cracks Open To Stablecoins; The Threat To Bipartisanship Amidst House Speaker Drama”

Speaker McHenry – questions

Amidst the revolt of a far-right wing minority of House Republicans which caused former Speaker Kevin McCarthy (R, CA) to lose his job, House Financial Services Chair Patrick McHenry’s (R, NC) was elevated to Speaker of the House “pro tempore.”

How’d McHenry get that job? It was a confidential list that McCarthy was required to submit to the Clerk of the House prior to the “motion to vacate” says CNN.

Is he thinking of taking the job long term?  So far, “No” – and that’s his word, emphatically, according to Punchbowl News which adds, “However, there’s a large group of House Republicans who would want his services atop the party.”

How about that gavel slam?

Speaker McHenry – digital assets

What does this mean for digital assets?

Delay, probably. Given all the legislative energy getting sucked into the House speaker drama, which includes two digital assets legislation champions in McHenry and House Majority Whip Tom Emmer (R, MN), consideration of bills, votes and hearings would seem to be pushed back as next week’s speaker election takes priority. The only saving grace: technically, the Senate and House will be in recess next week. Continue reading “Patrick McHenry’s New Speaker Role; The Escape Narrative”

Congressional opinions

Politico took the temperature of Members of Congress on whether or not they’re burning for digital assets legislation. In an article published yesterday, few surprises were elicited, but Rep. Bill Huizenga (R, MI) reiterated a commonly-held belief that – if not for FTX’s implosion – Democrats would be more publicly supportive of legislative efforts.

Rep. Jim Himes (D, CT), who supported the House Financial Services Committee’s stablecoin and digital asset market structure bills, is still worried about problems in the industry telling Politico: “I hear all these promises, but I say, ‘How is this going to change the neighborhood in St. Louis, or the state of Connecticut, or the United States?’ (…) To the average member, [they see] $2 trillion lost over time.” Read more.

SEC appeal denied

The Securities and Exchange Commission’s (SEC) attempt to appeal the Ripple decision has been denied. Fox Business’ Eleanor Terrett reported late yesterday, “[SEC’s motion] for leave to file an interlocutory appeal in the [Ripple] case has been DENIED… the SEC’s motion for certification of interlocutory appeal is DENIED, and the SEC’s request for a stay is DENIED as moot.” See more including the full decision here on X.

Blockworks summarizes the news saying in part, “The court did not find a ‘substantial ground for difference of opinion,’ [Judge Analisa] Torres wrote.” Read more. Continue reading “Capitol Hill Opinions Flourish On Digital Assets; SEC’s Ripple Appeal Denied”

subpoena stick

House Financial Services Chair Patrick McHenry (R, NC) made clear in a tweet on X yesterday that he’s serious about potentially issuing a subpoena to Securities Exchange Commission Chair Gary Gensler, a Democrat, if he doesn’t answer Congressional requests – primarily from Republicans. “SEC Chair [Gary Gensler] refuses to schedule a Commission vote to provide Congress with requested documents. Should Gensler continue to stonewall, Republicans will have no choice but to issue the first subpoena to the SEC from my Committee to compel their production.” See more.

McHenry first broached the subpoena at last week’s HFS SEC oversight hearing.

How serious is McHenry about using an unprecedented subpoena with an SEC Chair? Hard to say. But, the threat of a subpoena could create another lever in negotiations with Democratic leadership as Chair McHenry attempts to get key digital assets legislation (stablecoin and market structure bills) through Congress.

Senate Banking machinations

Politico reported yesterday that Senate Banking Chair Sherrod Brown (D, OH) is under pressure by Senator Elizabeth Warren (D, MA) to advance her Digital Asset Anti-Money Laundering Act (see S.2669), but he’s not convinced. Brown tells Politico, “We’re all trying to figure out what regulators can do and where the holes are that we need legislation (…) That’s the real problem. And I don’t know that Warren’s bill does that.” Read more.

Cato Institute policy analyst Nicholas Anthony commented on X about the news: “Senator Brown is right here. It was a bit bizarre when Senator Warren introduced this bill during the FTX hearing as it would do nothing to address the issues behind FTX, but it would levy a hefty blow to financial privacy for American citizens.” Read Anthony’s blog post on the Warren bill from last December on Cato’s blog. Continue reading “McHenry Threatening Subpoena For SEC Chair Gensler Again; Senator Brown Questions AML Bill”

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 21^st 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. Continue reading “November Digital Assets Floor Vote Back On?; Wholesale CBDC Possibilities”

hear ye, hear ye

Today, Securities and Exchange Commission (SEC) Chair Gary Gensler will visit House Financial Services for an “SEC Oversight” hearing beginning at 10 a.m. ET.

See the hearing page with live video

The hearing’s memorandum includes a wide range of potential topics – including digital assets. The SEC’s Staff Accounting Bulletin 121 (SAB 121) is at the top of the list. Industry policy executive Cody Carbone of Chamber of Digital Commerce shared on X: “…After meeting with Committee, expect a lot of continued questions on [crypto] with reactions of recent Court cases (Ripple, Grayscale).”

At the beginning of the Q&A during the last House SEC Oversight hearing in April, HFS Chair Patrick McHenry (R, NC) famously tried to get Gensler to say whether he thought Ether was a commodity or a security – but, to no avail. Gensler demurred.

For this hearing, Republican “push back” is expected. But, where will Democrats land? – other than the HFS Democratic leaders, that is. Ranking Member Maxine Waters (D, CA) and Rep. Stephen Lynch (D, MA) have dutifully supported the White House in past hearings and will no doubt come to Chair Gensler’s defense.

hear ye, hear ye – letter

Late yesterday afternoon, and just in time for today’s oversight hearing, a bipartisan letter from Rep. Mike Flood (R, NE) as well as fellow House Financial Services (HFS) Committee Members Rep. Wiley Nickel (D, NC), House Majority Leader Rep. Tom Emmer (R, MN), and Rep. Ritchie Torres (D,NY) arrived in Chair Gensler’s inbox. The gyst of the letter is that the Congressmen are urging the Chair to approve a spot Bitcoin Exchange Traded Product (ETP) “immediately.” See the letter.

If the spot Bitcoin ETP isn’t topic #1 today in today’s hearing, it will be topic #1A. The Congressmen have purposefully telegraphed their move to the Chair. Continue reading “House SEC Oversight Hearing Today; China Submits USPTO Application On Blockchain”