blockchain tipsheet

cannabis for crypto

In an interview with Fortune’s Leo Schwartz on Friday at Messari Crypto’s Mainnet event in New York City, Senator Kirsten Gillibrand (D, NY) divulges a possible way forward for digital assets legislation in the Democratic-controlled Senate and the Senate Banking Committee, specifically – a key roadblock to regulation in the United States in the minds of pro-crypto advocates.

Gillibrand sees the possibilities for some “horse trading” as Fortune’s Schwartz writes, “One possible solution would be reaching a compromise on one of the Senate Banking Committee’s priorities – cannabis banking reforms – where the House and Senate committees would take up each other’s bills. Gillibrand said that she has spoken with [Senate Banking Chair Sherrod Brown (D, OH)] about a compromise along those lines, although declined to comment on his openness to the proposal.” Read more.

Gillibrand still sees her Lummis-Gillibrand Responsible Financial Innovation Act as playing a role in Senate efforts to bring digital assets under the U.S. regulatory umbrella. Overall, the fact that the New York Senator is very public about these possible next steps for legislation is new for any sitting, Democratic U.S. Senator. And her influence shouldn’t be underestimated in that her fellow New York State Senator is the Senate Majority Leader Sen. Chuck Schumer (D, NY).

h/t @AlexanderGrieve Continue reading “Cannibis And Digital Assets Legislation May Meet In Congress; Shutdown Means Slowdown”

Sen. Gillibrand on stablecoins

On Friday, Senator Kirsten Gillibrand (D, NY) appeared at Messari Capital’s Mainnet crypto event in New York City on Friday and talked all things digital assets in a conversation with Crypto Council of Innovation’s Sheila Warren. Sen. Gillibrand was remarkably positive about legislation momentum in spite of what may look like Capitol Hill gridlock due to a divided government. Senator Gillibrand is co-sponsor of the Lummis-Gillibrand Responsible Financial Innovation Act and a member of the Senate Agriculture and Intelligence Committees.

Gilibrand cut to the chase: “…passing a stablecoin bill is the low hanging fruit and we should absolutely try to do that this Congress (by the end of ‘24). I also think that passing a market structure bill is possible this Congress and so those two pieces would be the highest priority. We’ve already done the anti-money laundering and know-your-customer and anti-terrorism financing provisions in the defense bill (see NDAA amendment). It’s there. It’s workable, it’s smart, and it can be implemented. So, I would really hope that we can create a national conversation around at least the two next pieces, because it would make a huge difference. And there’s such a willingness on behalf of the leaders. In the House and the Senate to do this. We just need to create consensus and create momentum with other members understanding what’s at stake and why it’s important.”

Suggesting that the lightweight NDAA amendment covers the AML-KYC piece for digital assets seems to challenge the scope of – and growing number of co-sponsors for – Senator Elizabeth Warren’s (D, MA) “Digital Asset Anti-Money Laundering Act.”

Nevertheless, Gillibrand didn’t hesitate on discussing what’s at stake: “If we can regulate, we can keep markets and we can keep participants. It allows our economy to grow, allows us to compete worldwide, and that’s better for New York, it’s better for America.” Continue reading “Crypto Democrats: Torres Challenges Progressives, Gillibrand Bullish On Legislation”

maybe next Congress

Former Senator Pat Toomey (R, PA), Ranking Member of the Senate Banking Committee in the last Congress, appeared before an audience at a Georgetown Law Seminar titled, “National Security and Digital Assets Seminar” yesterday. Toomey said he can’t see any crypto legislation making it into the law books until 2025 at the earliest. CoinDesk’s Jessie Hamilton reports, “‘I don’t see a path forward in the Senate, regardless of how the vote goes in the House,’ [Toomey] said, though he thinks a bill on stablecoins would have the best chance.” Read more.

In the interview, Toomey sees broader implications with digital assets starting with national security. He said, “Technology drives the economy” which pays for the nation’s defense infrastructure.

Later, he explained, “From a national security point of view, I want our currency to be the most technologically sophisticated and to me it seems, right now, stablecoins are a way that provides that technological sophistication, gives our money, abilities, capabilities that it doesn’t have today.”

See video of the entire interview with Senator Toomey.

now leaving the U.S.

In an article titled, “Crypto Companies Are Looking Outside the U.S. for Growth,” The Wall Street Journal reviews whether crypto startups are really leaving the United States for friendlier jurisdictions. The WSJ cites: “Crypto venture-capital firm Ryze Labs, payments company Ripple Labs and Zodia Markets, a digital-asset trading platform backed by Standard Chartered, are all focusing outside the U.S. for growth, executives at these companies said.” Read more.

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Mike Novogratz’s Galaxy Digital targets Europe for crypto expansion – The Financial Times Continue reading “Former Senator Toomey Sees No Path Forward For Legislation In 118th Congress; On Crypto Leaving U.S.”

Energy & Commerce

Yesterday, House Energy and Commerce’s (E&C) Innovation, Data, And Commerce Subcommittee held a hearing titled, “Mapping America’s Supply Chains: Solutions to Unleash Innovation, Boost Economic Resilience, and Beat China.” See the hearing page.

Committee Chair Cathy McMorris Rodgers (R, WA) and Innovation, Data, and Commerce Subcommittee Chair Gus Bilirakis (R, FL) said in announcing the hearing that the goal was to secure “our long-term global competitiveness in retaining manufacturing, spurring startups, and applying emerging technologies like artificial intelligence, blockchain, and ‘Internet of Things.'”

Subcommittee Chair Bilrakis and Ranking Member Jan Schakowsky (D, IL) presided over the hearing.

See the video of the two-hour hearing.

Energy & Commerce – use cases

Among the witnesses was Justin Slaughter of crypto venture firm Paradigm. In his prepared testimony, Slaughter provided blockchain technology use cases already in process.  He wrote, “…the US Air Force has a blockchain-based supply chain project called BASECAMP, which helps the Air Force ensure timely and secure manufacturing of its essential equipment, and provide a reliable supply of needed parts for maintenance, supporting the ongoing operations of our military globally.”

Download Slaughter’s testimony (PDF) –  a crisp example of the discussion around blockchain technology beyond financial applications, i.e. not crypto.

Slaughter was the only one of the witnesses who spoke to blockchain in their prepared testimony. During the hearing, Slaughter even discusses how unions (i.e. organized labor) see benefits of blockchain.

Energy & Commerce – legislation

According to the hearing’s memorandum, the E&C Subcommittee hearing also supported new, still unnamed, draft legislation related to the supply chain including one bill introduced by Rep. Larry Bucshon (R, IN) involving blockchain technology. “The bill would also establish the ‘National Blockchain Promotion and Deployment Program’ at the DOC (Department of Commerce). The bill would designate the Secretary of Commerce as the principal advisor to the President of the U.S. for policy pertaining to the deployment, use, application, and competitiveness of blockchain and other distributed ledger technologies; and authorize the Secretary to act through the program as necessary and appropriate to promote and assist the deployment, use, application, and competitiveness of blockchain and other distributed ledger technologies,” reads the memo. Continue reading “New Supply Chain Legislation Seeks To Incorporate Blockchain Tech; SEC Chair Hearing In HFS”

pro-crypto lobby

Coinbase’s “Stand With Crypto” lobbying effort, which is now a standalone nonprofit, has been gaining momentum with a retail crypto member base of “10s of thousands of supporters” this year according to The Hill yesterday.

The Hill reports on the next steps, “The group’s new campaign targets federal lawmakers and seeks to get pro-crypto constituents across the U.S. to raise their voices with Congress. The push focuses on nine ‘swing states’: Arizona, California, Georgia, Illinois, New Hampshire, Nevada, Ohio, Pennsylvania and Wisconsin.” Next week, on the same day (September 27) Securities and Exchange Commission Chair Gary Gensler is rumored to appear in front of the House Financial Services Committee, Coinbase is also planning a “Stand with Crypto” day in D.C. Read more in The Hill.

Coinbase U.S. policy executive Kara Calvert suggests the potential implications for both parties with voters: “America’s 52 million-strong crypto constituency is engaged and want both clarity and protections as consumers and job creators.”

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Regarding “Stand With Crypto,” Politico reported yesterday morning: “Coinbase has granted a new 501c4 organization an eight-figure budget to support organizing efforts, paid media and events.” There was already an event in Ohio last week (see it) with  former Democratic Congressman Tim Ryan. Read more.

today’s markup

The House Financial Service Committee, led by Chair Patrick McHenry (R, NC) and Ranking Member Maxine Waters (D, CA), will commence a markup at 10 a.m. today.  There are 13 bills up for a vote.

See the landing page with a link to livestream.

As blockchain tipsheet discussed on Monday, three bills with anti-Central Bank Digital Currency (CBDC) positioning could present a challenge to the Democratic minority’s leadership: [H.R. 3402] Power of the Mint Act, [H.R. 5403] CBDC Anti-Surveillance State Act, [H.R. 3712] Digital Dollar Pilot Prevention Act. To vote against these bills could be perceived by voters that Dem leadership supports a CBDC which may raise voter concerns around privacy, surveillance and security. Continue reading “House Financial Services Markup On CBDC Today; Giancarlo Advocates For Digital Dollar Future”

state leads regulation

New New York State coin listing guidance was proposed yesterday. According to the Wall Street Journal, New York Department of Financial Services (NYDFS) Superintendent Adrienne Harris said, “When we know that a coin that someone once thought was OK, when we see that new risks have emerged or the coin is being misused, we want our entities to have a way to delist the coin in a way that’s still protective of consumers and protects safety and soundness as well.” Harris noted that this is the first time “delisting” has been included in guidance. Read the article.  The comment period for the proposal ends on October 20.

In the NYDFS press release about coin listings, the Department reveals digital assets hiring momentum at the agency: “60 experts to oversee licensing and strengthen supervision, enhanced existing and established new policies and procedures, and enacted new assessment authority to support the continued growth of the virtual currency unit.” See the release.

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Back in May, Attorney General Letitia James echoed some of the themes of national Democratic leadership by challenging NYDFS authority with the introduction of state legislation that gave the State A.G. more jurisdiction in digital assets. To date, nothing has come of it and the NYDFS has appeared to maintain its grip on digital assets regulation with the backing of the state’s governor, Kathy Hochul. The turf battle is an extension of “state versus federal oversight in digital assets” being discussed today in Congress (see the July House Financial Services markup on the stablecoin bill).

about that AML bill

CoinDesk’s Jesse Hamilton reviews the new “team” of co-sponsors added to [S.2669] Digital Asset Anti-Money Laundering Act introduced by Senator Elizabeth Warren (D, MA) and sees difficulty ahead when it comes to passage. Continue reading “NYDFS Proposes New Listing Regs, Reinforces Authority; Citi Embraces Tokenization”

CBDC markup Wednesday

Late on Friday, House Financial Services (HFS) Committee Chair Patrick McHenry (R, NC) announced that his committee will hold a markup “of Legislation to Strengthen American National Security, [and] Prevent the Issuance of a Central Bank Digital Currency (CBDC)” on Wednesday, September 20 at 10 a.m. ET in the Rayburn House Office Building.

Read Friday’s brief announcement.

The suddenness of this markup – there had been no inkling of it – says something about the Majority’s view. In fact, an HFS FinCEN hearing had originally been rumored to occur on Wednesday. There are bills with implications for FinCEN at the markup, though.

CBDC markup – the bills

Bills under consideration at the markup will include the bipartisan “Power of the Mint Act” [H.R. 3402] which was introduced in the Spring (see May press release) by Rep. Jake Auchincloss (D, MA) and HFS Digital Assets, Financial Technology and Inclusion Subcommittee Chair Rep. French Hill (R, AR).

“Power of the Mint” prevents the Federal Reserve from issuing a CBDC.

The HFS Majority Republicans will likely request a roll call vote in order to highlight the Democrats who also want to support the bill and send it to the House floor. Rep. Ritchie Torres (D, NY) and Rep. Wiley Nickel (D, NC) are co-sponsors as the generational divide on issues surrounding digital assets among HFS Committee Democrats sharpens. Rep. Barry Moore (R, AL) is a co-sponsor, too.

“Power of the Mint,”  Majority Whip Tom Emmer’s (R, MN) “CBDC Anti-Surveillance State Act” [H.R. 5403] and the “Digital Dollar Prevention Act” [H.R. 3712], which seeks to prevent a CBDC pilot unless authorized by Congress and was introduced by Rep. Alex Mooney (R, WV), could put HFS Democratic leadership in a tight spot. Continue reading “House Financial Services Markup Gambit? Republicans Serve Democrats CBDC Poison Pill”