blockchain tipsheet

FedNow this month

FedNow, the Federal Reserve’s real-time payment system is expected to launch later this month. Last week, 57 companies were “certified as ready” for the new service with “41 financial institutions participating as senders, receivers and/or correspondents supporting settlement, 15 service providers processing on behalf of participants, and the U.S. Department of the Treasury.” Read the release.

The Democrats’ Senate Banking Committee Twitter account touted the FedNow news on Monday tweeting, “Our banking system is one step closer to real-time payments, which will help consumers and small businesses send and receive money instantly and safely. And the more banks that sign on, the more Americans that will have access to instant payments.”

Meanwhile, back in April, the Federal Reserve was already trying to debunk the idea that FedNow will replace cash and/or provide an on-ramp to a Central Bank Digital Currency (CBDC). See “Is FedNow replacing cash? Is it a central bank digital currency?”

And in early June, Bitwise crypto research analyst Ryan Rasmussen explained to Blockworks 5 important ways that stablecoins remain relevant in spite of FedNow’s launch of an always-on payment service including stablecoins’ global reach. Read them all. Continue reading “Senate Banking Democrats Tout FedNow; Crypto Exchanges Attract Most Scrutiny”

Bitcoin ETF – refilings

On Friday, the Securities and Exchange Commission (SEC) informed NASDAQ and Cboe that their applications were “inadequate” due to a dearth of information on their surveillance sharing arrangements for a Bitcoin Spot ETF. The Wall Street Journal reported that the two firms “filed the applications on behalf of asset managers including BlackRock and Fidelity Investments.” Read it. ”

By late Friday, at least 5 companies total had refiled (see Cboe’s filing) with the SEC given the reported guidance by the agency earlier in the day, according to  Bloomberg. Also, amended to each of the filings was “that Coinbase Global Inc. will provide market surveillance in support of” each of the funds. Read more in Bloomberg.

SEC, your serve.

Bitcoin ETF – McHenry

When the news on the SEC rejection of the Bitcoin Spot ETF applications on Friday, House Financial Services (HFS) Committee Chair Patrick McHenry (R, NC) didn’t take it well. He tweeted, “If these reports are accurate, [Gary Gensler] has a lot of explaining to do. An ETF would provide everyday investors with an SEC-regulated product. The only reason for Chair Gensler to oppose is if he wants to kill crypto in the U.S. all together.” See the tweet. Continue reading “Bitcoin ETFs Boomerang Refilings; OTC Framework For Tokens?”

House Republicans and SEC

Top House Republicans state they’ve had enough obfuscation from Securities and Exchange Commission (SEC) Chair Gary Gensler and its time for full transparency.

In a press release yesterday about a November request known as the “SEC Off Platform Letter”, House Financial Services (HFS) Committee Chair Patrick McHenry (R, NC), House Judiciary Committee Chair Jim Jordan (R, OH) and House Oversight and Accountability Committee Chair James Comer (R, KY) “identify significant concerns with Chair Gensler’s potential failure to comply with federal record keeping laws, while slamming Gensler’s inadequate response to a previous inquiry regarding the matter.”

In a new letter addressed to Chair Gensler and dated this past Wednesday,  the three House Republican Chairs (three corresponding Democratic Ranking Members are “cc’d”) drill down much further and call into question, for example, whether Congress has been provided relevant communications from digital apps such as Signal, WhatsApp, Teams, and Zoom.

Also, proper recordkeeping around meetings with lobbyists such as Better Markets and Healthy Markets are questioned.

The letter concludes in part, “Your failure to adequately respond to the SEC Off Platform Letter, combined with the potential recordkeeping matters described above, continue to raise troubling questions about the SEC’s compliance with applicable federal laws. They also raise disturbing questions regarding your own commitment to holding the SEC accountable to the same standards you seek to impose on the individuals and entities you regulate.”  See the letter.

A response to the letter’s many requests is due by July 17. Continue reading “House Republicans Demand Transparency From SEC; New Law Moves UK Ahead On Digital Assets”

EU ‘likes’ CBDC

The European Union appears to see an opening for a central bank digital currency (CBDC). Yesterday, the European Commission published two new proposals including a framework for the digital euro that could be implemented “over time” and moved the continent ever closer to its own CBDC.

Valdis Dombrovskis, EVP of the European Commission said in a release, “Today’s proposals will also make sure that cash will continue to be fully available, while allowing the European Central bank to develop, over time, the practical aspects of the digital euro.”

In addition, along with Dombrovskis, Fabio Panetta, Member of the Executive Board of the European Central Bank (ECB) penned, “Why Europe needs a digital euro” yesterday. See the 2-pager (PDF).

Highlights include:

“Protecting privacy is a vital feature of the digital euro. The ECB would not see users’ personal details or their payment patterns. The offline functionality would also bring a higher degree of data privacy than any other digital payment methods currently available.”

“A digital euro would also reduce payment-related fees for consumers by spurring competition in Europe. At present, two-thirds of Europe’s digital retail payments are processed by a handful of global companies. Thanks to greater competition, customers and merchants would benefit from cheaper services.” Continue reading “European Union Moves Closer To CBDC; National Security, Digital Assets Combo Reaches Congress”

Prometheum – podcast brawl

Reporter Laura Shin of Unchained has released her podcast’s latest episode which refereed a conversation between Prometheum co-founder Aaron Kaplan and Rodrigo Seira, Special Counsel for investment firm Paradigm. Every minute of the rough-and-tumble one-hour podcast brawl explored what’s behind Prometheum and what’s really going on with the company which still is looking for its first revenue. Even the company’s appearance at the recent House Financial Services Committee meeting came under the microscope as did Senator Tommy Tuberville’s (R, AL) recent Wall Street Journal op-ed (on 6/7; Prometheum response on 6/25) about the company and its previous Chinese investor.

The podcast began with one of many “elephants in the room” for the digital assets industry: whether it’s possible – or not possible – for crypto exchanges to register with Securities and Exchange Commission (SEC).

Prometheum’s Kaplan took the side of “it’s possible” explaining, “It’s possible because Prometheum has done it. Essentially by operating within the compliant frameworks of the Federal securities laws as laid out by the SEC. Prometheum ATS has been approved as an ATS to publicly-trade digital asset securities. And Prometheum Capital was recently approved as the first special purpose broker-dealer that could compliantly custody digital asset securities under Federal securities laws. So, essentially, I think that’s an example others can follow in how to come into compliance.” Continue reading “Prometheum Talks About Special Purpose Broker-Dealer License And Rule 144 For Digital Assets”

letters – market structure

In two new Congressional letters, House Financial Services Committee (HFS) Committee Ranking Member Rep. Maxine Waters (D, CA) requested last Friday that U.S. Treasury and the Securities and Exchange Commission (SEC) provide comments on the new digital assets market structure bill being driven by HFS Committee Republicans.

Ranking Members Waters would not be sending the letters if they weren’t welcome. Democratic leadership is making a strategic play here.

In her letter to U.S. Treasury and Secretary Janet Yellen, she echoes previous HFS Democratic positioning (like this) -on whether the legislation was even necessary: “Finally, please advise whether this draft legislation or its specific provisions are needed, and, whether there are alterations to existing law outside the bill’s scope that would promote financial stability or strengthen oversight and investor and consumer protection in the digital assets ecosystem.”

See the press release from HFS Ranking Member Waters.

Read the letter to Treasury Secretary Janet Yellen.

And, read the letter SEC Chair Gary Gensler. Continue reading “Democratic Leadership Asks Treasury And SEC For Comment On Crypto Legislation”

speaking of digital assets – Fed

The “Salzburg Global Seminar on Global Turbulence and Financial Resilience: Implications for Financial Services and Society” is taking place in Salzburg, Austria through tomorrow and its agenda apparently isn’t shying away from digital assets with topics that include the “Digital economy, AI, De-Fi and Fintech.”

Among the presenters, Federal Reserve Governor Michelle Bowman provided a keynote address released yesterday which included a brief comment on digital assets.

Bowman, a Republican, stressed the need for a regulatory framework: “One area in particular that requires attention is the current approach to the supervision of novel banking activities, which leaves financial institutions in a supervisory void. While there have been some efforts to provide guidance, there remains substantial uncertainty about the permissibility of and supervisory expectations for these activities, including banking as a service, digital assets, and other novel activities. This leaves banks in the perilous position of relying on general but non-binding statements by policymakers only to be criticized at some point in the future. The absence of a clear regulatory and supervisory approach creates the risk that regulators may determine novel activities are impermissible or impose new requirements and expectations on these activities after the fact and, for some first movers, after significant investment. If our role is effective supervision and regulation, we must be willing to engage on both the novel and traditional activities.” Read her keynote speech. Continue reading “Fed Governor Bowman On Digital Assets; Prometheum Drama Continues”

Coinbase – super app

At yesterday’s State of Crypto Summit (see agenda) in New York City organized by Coinbase and The Financial Times, Coinbase CEO Brian Armstrong laid out a global “super app” vision for his company.

CoinDesk reports, “Armstrong envisions that Coinbase, currently a centralized crypto exchange with various crypto products, will eventually become a ‘super-app,’ helping the Web3 economy. The term ‘super-app’ is used for Web2 applications like Tencent’s WeChat, which provide a vast array of services to users including financial services to booking doctors’ appointments.” Ultimately, Armstrong sees his company developing a super app of decentralized protocols. Read it.

more tips:

Are Super-Apps Coming to the U.S. Market? (from April) – Harvard Business Review

Coinbase – research

As part of its participation in their New York event yesterday, Coinbase released new research discussing adoption and interest in blockchain technologies across the Fortune 500 and a subset – the Fortune 100.

Continue reading “Coinbase Pursuing Super App Strategy; Bank Of International Settlements On Tokenization”