Tag: cryptocurrency

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Keeping Tabs on Bitcoin in El Salvador

ACES Act

The “Accountability for Cryptocurrency in El Salvador Act” or “ACES Act” (S.3666) took another step forward this month as the Congressional Budget Office reported its estimation of costs to fulfill the Act.

The bi-partisan legislation is sponsored by Senator Jim Risch (R, ID) and co-sponsored by Senator Bill Cassidy (R, LA) and Robert Menendez (D, NJ) as part of their efforts on the Senate Foreign Relations committee.

As Protocol notes, the Senators position this as a study to make sure the US financial system is not impacted negatively by El Salvador’s cryptocurrency experiment. A glass-half-full opportunity of this legislation could be to understand benefits accrued to the tiny Central American nation by its adoption of bitcoin as a legal currency. But, there’s no mention of that angle.

Published on the CBO site today, the details and costs are summarized:

“In 2021, El Salvador officially adopted a cryptocurrency as legal tender. S. 3666 would require the Department of State to report to the Congress on the details and ramifications of that action. The bill also would require the department to devise, implement, and report to the Congress on a plan to mitigate any potential risk to the U.S. financial system from El Salvador’s action and similar actions by other countries.

On the basis of information about the costs to prepare similar reports, CBO estimates that satisfying that requirement would cost less than $500,000 over the 2022-2026 period. Such spending would be subject to the availability of appropriated funds.”
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What’s in Your Crypto Wallet? McHenry and More in DC This Week

Congressman Patrick McHenry

Congress is returning to action on Capitol Hill this week and blockchain-related happenings include…

On Thursday, April 28 at 10:00 AM ET, The House Committee on Financial Services Committee will convene for a two-part hearing beginning with FinCEN: “Oversight of the Financial Crimes Enforcement Network.” And then, following in the afternoon at 2 PM ET, the committee will hear, “What’s in Your Digital Wallet? A Review of Recent Trends to Mobile Banking and Payments.” Perhaps, the nod toward a Capital One marketing slogan (“What’s in your wallet?”) was unintended, but blockchain payment rails and cryptocurrency will likely be a hot topic. Webcast available here.

Also in the U.S. House of Representatives, the Committee on Financial Services will hear “Consumers First: Semi-Annual Report of the Consumer Financial Protection Bureau” on Wednesday, April 27 at 10 am ET. Get the webcast here. The Consumer Financial Protection Bureau Director Rohit Chopra will participate in the semi-annual review of results. It’s possible that cryptocurrency could come up here as banking transparency and regulation is discussed. The day before – on Tuesday, April 26 at 10am – the Senate Committee on Banking, Housing and Urban Affairs who will also meet with Director Chopra as well as consider “the nominations of Ventris C. Gibson, of Virginia, to be Director of the Mint, and Paul M. Rosen, of California, to be Assistant Secretary for Investment Security, both of the Department of the Treasury.” It’s unlikely the Mint discussion will include NFTs – but maybe someday? See the Senate hearing webcast.

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Bitcoin Spot ETF ‘Hot Take’: It’s Time

Axios on Crypto

In today’s Axios live webcast, Axios crypto reporter Brady Dale asked law professor J.W. Verret of George Mason University, if the long-awaited spot ETF is ready for prime time.

Brady Dale: The argument against a Bitcoin ETF for allowing people in their brokerage accounts to own Bitcoin, through publicly traded instruments has mainly been the market is too small and it’s too easy to manipulate. But, the market is now three times bigger than it was when the Winklevoss brothers first proposed an ETF in 2017.  How big do you think it needs to get before it’s big enough for a spot Bitcoin ETF?

J.W. Verret: I think it’s already big enough. And if the SEC were judging the Bitcoin spot ETF applications by the same metric they’ve used in the past for other ETF applications, they would have approved it already in the same way that Canada and Germany have and the same way I expect Australia will eventually. So I think we’re just behind other comparable nations. And it would be nice if the SEC said, ‘Look, here’s what’s required in order to obtain full approval.’ It’s also interesting to that the SEC recently approved a futures ETF application is based on the 33 Act and not the 40 act. In that way, SEC Commissioner Gary Gensler has already crossed the red line that he previously said he wouldn’t cross with respect to Bitcoin ETFs that gives a lot more wind behind the sails of folks like Grayscale and other applicants for Bitcoin ETFs. I think it’s just a matter of time.

Brady Dale: Can you explain the red line he crossed? Continue reading “Bitcoin Spot ETF ‘Hot Take’: It’s Time”

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Treasury Secretary Yellen’s Annual Testimony on International Financial System (VIDEO)

The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System

Time: Wednesday, April 6, 10am ET

House Financial Services Committee Memorandum here:

“The International Financial Institutions Act (22 U.S.C. §262r-4) requires the Secretary of Treasury to present testimony annually before the House Financial Services Committee on the state of the international financial system and U.S. priorities with respect to U.S. participation in the international financial institutions. The Secretary of the Treasury will also discuss other issues related to U.S. global economic cooperation and major international developments affecting the U.S., including Treasury’s role in implementing and enforcing sanctions against Russia.”

Live blog on excerpted blockchain-related topics discussed: Continue reading “Treasury Secretary Yellen’s Annual Testimony on International Financial System (VIDEO)”

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New Stablecoin Transparency Act Supports Innovation and Protections Say Lawmakers

D.C. blockchain policy discussion around stablecoins is heating up. Last week, two Republican legislators sought transparency, and investor and innovation protections in one fell swoop.

Senator Bill Hagerty (R., Tennessee) introduced a new bill called the Stablecoin Transparency Act (S.3970) in the U.S. Senate. According to the legislation, the intention is to “establish reporting requirements for issuers of fiat currency-backed stablecoins, and for other purposes.” Next stop will be the Senate Committee on Banking, Housing, and Urban Affairs.

Simultaneously in the U.S. House of Representatives, Congressman Trey Hollingsworth (R., IN) introduced “H.R.7328 – To establish reporting requirements for issuers of fiat currency-backed stablecoins, and for other purposes.” The bill has been referred to the House Financial Services for review.

In a release from Sen. Hagerty’s office and in concert with Rep. Hollingsworth, though transparency through regulation is clearly one purpose of the bill, a pro-crypto tone poked through, “This legislation aims to provide much-needed clarity without giving the keys away to unaccountable bureaucrats who threaten to choke off innovation.”

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Crypto Lending and Complaints of The SEC Curtailing Innovation

The recent $100 million settlement by BlockFi with the Securities and Exchange Commission (SEC) in mid-February – see press release and SEC order (PDF) – was hailed by some as welcome guidance by the SEC on cryptocurrency and a step forward for the blockchain industry.

In particular, the SEC required the registration of BlockFi’s crypto lending products as a security going forward – an expensive process that could overwhelm less well-capitalized decentralized finance (DeFi) companies.

BlockFi itself declared at the time, “We have worked tirelessly with regulators on your behalf to chart this exciting path forward, and we look forward to our next chapter of pioneering innovative, crypto-powered products for our clients worldwide.” And then, the company announced an SEC-compliant product, BlockFi Yield which replaced the previous BlockFi Interest Accounts which were offered in the U.S.

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Financial Surveillance and a Crypto Society Meet at SXSW

Filecoin at SXSW

Blockchain technology and cryptocurrency were on full display at the recent SXSW festival in Austin, Texas. For the Filecoin Foundation-sponsored track last Tuesday, privacy was a key topic and included a panel discussion titled, “Financial Surveillance in a Cashless Society.”

AML (Anti-Money Laundering) and KYC (Know Your Customer) requirements are ever-growing in the cryptocurrency space especially as the new distributed ledger technology and traditional finance worlds continue to merge. So, where does privacy fit in? A standing-room only audience wanted to know.

Marta Belcher, general counsel of Protocol Labs and chair of Filecoin Foundation, offered some initial thoughts in a crypto context: “There is this myth that privacy is bad and that tools that enable privacy and anonymity are illegal or enable illegal activity. And I think that is fundamentally a very important misunderstanding. Privacy is absolutely critical to civil liberties, as is the ability to transact anonymously.” She pointed to the importance of anonymity as it related to participants in the the Hong Kong protests of 2019-2020 and their anonymous purchase of subway tickets to get to the gatherings.

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