blockchain tipsheet

letter – no veto, please

WIth the deadline approaching early next week, Senator Cynthia Lummis (R, WY) and a bipartisan group of Congressmen appealed directly to President Joe Biden with a Congressional letter urging him to NOT veto H.J.R.109. The resolution rescinds the SEC’s Staff Accounting Bulletin 121 and was passed by a bipartisan majority in both houses (1, 2) of Congress this month.

Sen. Lummis and the House reps say in a statement, “Given the overwhelming bipartisan votes, we urge you to sign H.J. Res. 109 into law or work with the SEC to rescind the staff guidance…. Rescinding SAB 121 is well within the SEC’s authority and there is ample precedent for revisiting a staff accounting bulletin. In fact, most staff accounting bulletins over the last three decades have been revisions and recessions of prior guidance.” Read the release.

Lummis is joined by House Majority Whip Tom Emmer (R, MN), House Financial Services (HFS) Chair Patrick McHenry (R, NC) and Reps. French Hill (R, AR), Wiley Nickel (D, NC), Ritchie Torres (D, NY), Andy Barr (R, KY), Mike Flood (R, NE) and Dan Meuser (R, PA).

And, read the letter (PDF).

what you should know: If President Biden signs H.J.R.109 into law, would SEC Chair Gary Gensler decide to leave? The President’s signature would be a damning statement on Gensler’s leadership at the agency – even if was just following orders from Dem leaders. It would also follow the ouster of Chair Gensler’s policy director Heather Slavkin Corzo on May 17. The announcement came one day after the SAB 121 resolution vote in the Senate and was one of the first signs that Dem leaders were potentially changing their collective mind on digital assets.

storm for Dem leadership

Ohhhhh, the storm continues to brew for Democratic leadership…

According to Bloomberg yesterday, former President Donald Trump and Elon Musk “are discussing cryptocurrency policy as the former president increasingly highlights Bitcoin and other digital assets on the campaign trail as a way to reach new voters,” says an unnamed source. Read it. Continue reading “Congress Urges President To Support SAB 121 Resolution; Storm Swirls For Dem Leadership”

Whip Emmer on lame duck

House Majority Leader Tom Emmer (R, MN) said that the “lame duck” session after the election and before the 119th Congress starts may be the best opportunity for Congress to advance the big digital asset market structure bill.

Speaking in front of an audience at CoinDesk’s Consensus conference yesterday, Whip Emmer said that the Financial Innovation and Technology for the 21st Century Act (FIT 21) will likely see changes from Senate colleagues, which will mean yet another vote in the House – and all before year end.

CoinDesk’s Jesse Hamilton reports Emmer had sharp words for Securities and Exchange Commission Chair Gary Gensler saying he was “‘on his way out’ and losing favor in the administration” and adding in regards to the Chair, “I’d be very careful about trusting a cornered animal.” Read more in CoinDesk.

more tips:

• • NYSE Would Consider Crypto Trading If Regulatory Picture Were Clearer, President Says at Consensus 2024 – CoinDesk

what you should know: FIT 21 making it into law by the end of the year seems improbable. Nevertheless,  the groundwork is being laid for the 119th Congress. Continue reading “House Majority Whip Emmer Sees End Of Year Opportunity; NFTs Probed By Treasury”

PayPal gets state charter

Payments company PayPal, and its PayPal Digital subsidiary, have received a limited purpose trust charter from the New York State Department of Financial Services (NYDFS) according to Ledger Insights.

It was just last August that PayPal launched its PYUSD stablecoin.

Shortly thereafter, House Financial Services (HFS) Ranking Member Maxine Waters (D, CA) expressed strong reservations in an August 9 statement: “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” – keyword “Federal” because there is one in New York State, for example.

Ledger Insights explains the weeds if yesterday’s announcement, “The stablecoin issuer is Paxos Trust Company which also has an NYDFS limited trust charter. Paxos has also been PayPal’s partner for its cryptocurrency offering since its launch. Hence, there’s a possibility that the aim of the Trust charter is to take on the custody of PayPal client crypto-assets and move the issuance of the stablecoin in-house.” Read more.

what you should know: Is this yet another piece of news which pushes stablecoin legislation over the line in Congress?

stablecoins and trade

Bloomberg reports that Chinese and Russian commodity traders are increasingly turning stablecoins – Tether’s USDT stablecoin, in particular – to facilitate international payments.

The alternative to stablecoins, according to Bloomberg “is often slower transactions, or worse, risking an overseas bank account that could be frozen, the executives said. Some unsanctioned companies opened dozens of accounts in different countries only to see them frozen one after the other.'” Read more. Continue reading “PayPal May Be Updating Stablecoin Strategy; Crypto ‘Bursting On To The Political Scene’”

Donald Trump on crypto

With Democratic leadership appearing to turn toward supporting digital assets legislation, former President Donald Trump poured on the gasoline on his Truth Social platform on Saturday saying, “I am very positive and open minded to cryptocurrency companies, and all things related to this new and burgeoning industry.”

Arguably, Trump’s professed interest in crypto – beginning in early May – has helped improve the prospects for bringing digital assets under the umbrella of the U.S. financial system. Read more from Forbes.

more tips:

• • Trump Vows to Aid Convicted ‘Silk Road’ Founder in Crypto Appeal – Bloomberg

risky stablecoins

Treasury Secretary Janet Yellen speaks to Punchbowl News’ Brenden Pedersen on the latest effort to regulate stablecoin markets. All Yellen sees are risks and advocates for regulation – coming from Congress – sooner than later. She tells Pedersen, “PayPal now has a coin… This could become a widely used payments network. If something is a widely used payments network that involves stablecoins, I think there is serious financial stability risk.” Read more in The Vault (subscription).

what you should know: Given the significant change in tone towards digital assets coming from the White House in the past two weeks, Yellen’s comments do not echo a similar change as of yet. The Biden Administration has seemingly held fast to Federal Reserve pre-emption when it comes to stablecoin issuance versus the dual banking (states/Federal) solution preferred by Republicans.

Continue reading “Trump Is Open-Minded On Cryptocurrency; Biden SAB 121 Veto Decision This Week, Early Next”

anti-CBDC bill – passage

Yesterday afternoon, The “CBDC Anti-Surveillance State Act” [H.R.5403] from Majority Whip Tom Emmer (R, MN) passed along nearly partisan lines on the House Floor. The bill effectively bans a Central Bank Digital Currency (CBDC) without Congressional authorization.

The bill passed 216-192. 22 members did not vote.

As expected, the bill with 165 Republican co-sponsors, was unanimously approved by House Republicans.

Three Democrats broke from Dem leadership and voted for the bill: Reps. Jared Golden (ME), Mary Sattler Peltola (AK) and Marie Gluesenkamp Perez (WA).

Visit the Clerk’s website for H.R. 5403’s complete tally.

Whip Emmer celebrated the passage in a tweet thread after the vote, “My legislation ensures that the United States’ digital currency policy remains in the hands of the American people so that any development of digital money reflects our values of privacy, individual sovereignty, and free market competitiveness.”

more tips:

• • View: “Full answer from [Treasury Secretary Janet Yellen] on a digital dollar ahead of this afternoon’s vote on Majority Whip Tom Emmer’s bill to ban the Fed from offering one.” – Brendan Pedersen, Punchbowl News on X

what you should know: This is an important message bill for House Republicans that likely won’t see the Democrat-controlled Senate Floor this Congress (let alone the White House). But, if votes fall the Republicans way in the November election, this bill could make it into law in the next Congress. Continue reading “Congressional Letter Sent And ETFs Begin Approvals; FIT 21 Reverberates; Anti-CBDC Bill Passes”

FIT 21 – passage

The long awaited vote on the digital asset market structure bill known as “Financial Innovation and Technology for the 21st Century” or FIT 21 [H.R.4763] finally took place yesterday just before 6 p.m. ET.

Final tally 279-136 in favor of passage. 15 Members did not vote.

Signaling still more momentum for digital assets in Congress, Democratic support totaled 71 votes – well beyond the 21 House Dem votes recorded in favor of H.J.R.109 rescinding the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 two weeks ago.

Reps. Nancy Pelosi (D, CA), Adam Schiff (D, CA), Democratic Caucus Chair Pete Aguilar (D, CA) and House Minority Whip Katherine Clark (D, MA) were among the Democratic surprises to support the bill.

Republicans were nearly unanimous in support of FIT 21.

Reps. Andy Biggs (AZ), Nick Lalota (NY) and Matt Rosendale (MT) were the Republicans voting “no.”

Visit the Clerk’s website for FIT 21’s complete tally.

This was another victory for HFS Chair Patrick McHenry (R, NC) as well as House Ag Chair Glenn “GT” Thompson (R, PA).

more tips:

• • House Passes Financial Innovation and Technology for the 21st Century Act with Overwhelming Bipartisan Support – financialservices.house.gov
  • Emmer Celebrates the Passage of the Securities Clarity Act in the FIT 21 Act – emmer.house.gov

FIT 21 – staff

• • “And [thanks] to those who did the heavy lifting, especially: Allison Behuniak, Tim Hite, and Paul Balzano.” – Rep. Warren Davidson (R, OH) on X
  • “Incredible bipartisan support for [FIT 21]!” (photo)- Tim Hite on X
  • “FIT21 was so bipartisan it could have gone on suspension, where 2/3rds of Members vote in favor.” – Michael Cameron on X

Continue reading “FIT 21 Passes House In Watershed Moment For Digital Assets; White House Gets Conciliatory”

today’s vote – FIT 21

With an expected vote this afternoon on the Financial Innovation and Technology Act for the 21st Century [H.R.4763] or “FIT 21,” pro- and anti-crypto interests alike are wondering how many Democrats will be voting for the digital asset market structure bill. (We took a partial “crack at it” on Monday.)

Senior Republican committee staff told press yesterday that they are “hopeful” about Democratic support and pointed to the SAB 121 resolution vote where more Democrats voted for the resolution than many expected.

For a livestream of the vote this afternoon:

• • Visit: live.house.gov.
  • Majority Leader’s Daily Schedule is here.
  • H.R.4763 – rules.house.gov

Industry observers are also hopeful that with enough Democratic support in the House, Senate Majority Leader Chuck Schumer (D, NY) may bring FIT 21 up for a vote on Senate floor – an unthinkable outcome prior to the Senate’s vote on the House’s SAB 121 resolution.

more tips:

Several U.S. House Democrats Petition Colleagues to Join Yes Side on Crypto Bill – CoinDesk

FIT 21 – presser

House Republican leaders held a press conference on FIT 21 yesterday.

House Financial Services (HFS) Chair Patrick McHenry (R, NC) and House Agriculture Chair Glenn “GT” Thompson (R, PA) were joined by their colleagues Rep. French Hill (R, AR), who is the Chair of the  HFS Subcommittee on Digital Assets, Financial Technology and Inclusion Subcommittee and Rep. Dusty Johnson (R, SD), who is chair of House Ag’s Commodity Markets, Digital Assets and Rural Development Subcommittee. Continue reading “FIT 21 Prepares For The House Floor Spotlight Today; Wells Notice Response By Uniswap”