Tag: digital assets

Coinbase – earnings review

Earnings for cryptocurrency platform Coinbase outpaced Wall Street’s expectations for the first quarter of 2024 as the company reported earnings of $4.40 per share last Thursday, more than tripling analysts projections, with total revenue of $1.64 billion which more than doubled the revenue from the same period a year ago.

Nevertheless, Wall Street analysis was a mixed bag. Cannacord said “the quarter underscored the company’s ability to gain market share in hot and cool crypto market environments” while Goldman Sachs said “the risk-reward for Coinbase stock will largely be a reflection of volatility in crypto prices going forward, without a long-term plan in the broader crypto market according to Investor Business Daily. Read more.

Coinbase currently has a market cap of $54 billion. 

more tips:

• • Coinbase First Quarter 2024 Shareholder Letter
  • Earnings Webcast
  • Earnings Call Transcript
  • Analyst Call Transcript
  • 10-Q

Coinbase – elections, dual banking

On the conference call with analysts, Coinbase CEO Brian Armstrong noted how growing revenue, crypto utility and regulatory clarity were his company’s three big priorities. Fairshake Super PAC, “which already had a great impact in the market primaries in California, Texas, and Alabama” also was mentioned by Armstrong.

Expect more of the same on election contributions leading up to November appeared to be the message.

Citi analyst Peter Christiansen asked the Coinbase team about stablecoin legislation during the earnings call. Christiansen claimed “press reports are indicating potentially that Lummis-Gillibrand [Payment Stablecoin Act – S.4155] could hit the floor at some point next week. And part of that Bill, as you likely probably know is the dual banking system debate and whether or not states can issue their own stablecoins independently of the government — the federal government. I’m just curious how you see state-issued stablecoins kind of playing in the market. Is that potentially an opportunity for Coinbase? I’m just curious for your thoughts around that dynamic.” Continue reading “Coinbase Earnings Reviewed With Elections, Regulation In Focus; Russia And Iran Working On CBDC”

rescinding SAB 121 – review

A new filing for the Congressional record by House Financial Services (HFS) Chair Patrick McHenry (R, NC) provides a complete history on H.J.109, the resolution intended to rescind the Securities and Exchange Commission’s infamous Staff Accounting Bulletin 121 (SAB 121).

The resolution was introduced by Rep. Mike Flood (R, NE) and co-sponsored by Reps. Wiley Nickel (D, NC), French Hill (R, AR), Darren Soto (D, FL) and Majority Whip Tom Emmer (R, MN).

So far, HFS approved the resolution out of Committee in a February markup and awaits a House Floor vote.

In the Senate, Senator Cynthia Lummis (R, WY) has been unable to breakthrough with the Senate version due to the Democratic-controlled Congress and key committee Democrats such as Senate Banking Chair Sherrod Brown (D, OH), who has been largely anti-crypto.

The HFS report includes both sides of the SAB 121 argument which, at its core, prevents the custody of crypto by the regulated, U.S. financial system.

Of interest to SAB 121 aficionados may be the listing of organizations who opposed the resolution…. the banking sector was not among them: “Americans for Financial Reform (AFR); Better Markets; Public Citizen; Consumer Federation of America (CFA), United States Public Interest Research Group (US PIRG); NJ Citizen Action; Demand Progress; Institute for Agriculture and Trade Policy; Texas Appleseed; 20/20 Vision; Hilary J. Allen, Professor of Law at American University; Lee Reiners, Lecturing Fellow at Duke University.”

See the report.

Continue reading “The SAB 121 House Joint Resolution Report; Letter From Sen. Warren Decries Digital Assets Again”

Sen. Warren’s race

Titled “Crypto comes for Elizabeth Warren,” Boston Globe editorial writer Shira Schoenberg provided local readers an overview of the race for Sen. Elizabeth Warren’s (D, MA) seat yesterday.

It’s an even-handed look which includes Sen. Warren and two Republican candidates – John Deaton and Ian Cain – who bring a pro-crypto platform.

Schoenberg notes Warren’s anti-money laundering crusade adding “…But in a state known for its high-tech industries, Warren’s opponents say she is stifling innovation. Cain is the founder of the Quincy-based QUBIC Labs, an incubator for blockchain technology. (…) Cain says the technology has broad uses beyond cryptocurrency. For example, he worked with MassTech Collaborative to explore ways governments can use blockchain, whether to streamline permitting or issue municipal bonds.”

Read the article .

what you should know: The Massachusetts Republican primary is September 3.

stablecoin bill updates

The “Lummis-Gillibrand Payment Stablecoin Act” is now available on Congress.gov.

S.4155, as it is now known, has been referred to Senate Banking. See it here. Continue reading “Senator Warren’s Race With Two Republican Candidates; DOJ Seeking More Crypto Powers”

stablecoin bill – FAA

The McHenry/Waters stablecoin bill will probably not be added to the FAA Reauthorization according to a CoinDesk report yesterday afternoon.

CoinDesk’s Jesse Hamilton wrote, “A Democratic aide familiar with the negotiation said House and Senate leaders are insisting on a clean FAA reauthorization that wouldn’t allow the attachment of a stablecoin bill.”

Read more.

Later yesterday, Senate Banking Chair Sherrod Brown (D, OH) was apparently not giving up hope on getting “stablecoin + cannabis” into the FAA Reauthorization according to Politico’s Eleanor Mueller.  Mueller also reports that New York Department of Financial Services Superintendent Adrienne Harris had been encouraging Majority Leader Chuck Schumer (D, NY) to move forward with the stablecoin bill. Read more (subscription). Dual banking rights, for the win?

what you should know: Whenever the stablecoin bill eventually passes, assuming it does, Harris’s support seems to indicate that she’s getting dual banking rights for her state agency which she has advocated for in the past. That’s big – that’s reportedly been the major sticking point between McHenry, Waters and the White House.

Continue reading “McHenry Accuses Gensler Of ‘Intentional Attempt’ To Mislead; Report: Stablecoin Bill Stopped”

ETH is/was a security

On April 18, 2023, while appearing at a House Financial Services (HFS) oversight hearing, Securities and Exchange Commission Chair Gary Gensler waffled as HFS Chair Patrick McHenry tried to get Gensler to say whether Ether was a commodity or security.

Apparently 5 days earlier, on April 13, 2023, SEC’s head of enforcement Gurbir Grewal, who reports to the Chair, said Ether was a security and put it in writing in a “Formal Order.” So says a new, unredacted filing of the Consensys lawsuit against the SEC according to Leo Schwartz at Fortune.

Contradicting itself (given the assertion in the Consensys unredacted brief) even further, the SEC let Ether futures “go live” in October 2023.

House Majority Whip Tom Emmer (R, MN) reacted to the news last night on X saying, “This regulatory dishonesty is reprehensible – it’s tainting our great capital markets, harming investors, and threatening U.S. global leadership.” Next step, a Congressional letter -and a hearing?

more tips:

• • Consensys Software Inc. v. Gensler et al – Justia.com

what you should know: Chair Gensler’s lie of omission took place just 6 months after the FTX implosion -an event which steered the Biden Administration toward crystallizing an anti-crypto position. Continue reading “SEC Said ETH Was A Security In 2023; Stablecoin Bill In FAA Reauthorization Mix”

stablecoin optimism – Waters

Speaking to stablecoin legislative momentum in a Bloomberg TV interview last Wednesday, House Financial Services (HFS) Ranking Member Maxine Waters (D, CA) was optimistic saying that “We’re on our way to getting a stablecoin bill in the short run.” Emphasis: short run,  as in soon.

In addition to the close co-ordination with HFS Chair Patrick McHenry, she also mentioned the involvement of Senate Majority Leader Chuck Schumer (D, NY) and Senate Banking Chair Sherrod Brown (D, OH).

what you should know: Her tone was a far cry from the July 2023 stablecoin markup where the Dem leader attempted to put the breaks on the “Clarity for Payment Stablecoins” [H.R.4766] bill on behalf of the White House -and then adding in August 2023 that the bill had “No chance.”

stablecoin optimism – FAA

10 days to go!

FAA Reauthorization is the odds-on-favorite to be the the must-pass that the stablecoin bill rides on – last mentioned publicly by Sens. Cynthia Lummis (R, WY) and Kirsten Gillibrand (D, NY) on CNBC on April 18, who have their own stablecoin bill out there that earns the Senators a “seat” at the stablecoin “table” at the very least.

FAA’s funding runs out on May 10 so there are only 10 days to go until the reauthorization must revisit Congress for a vote. Of course… there will be other must-pass opportunities if the timing doesn’t work. Right?

Nevertheless, Ranking Member Waters seemed resolute in her efforts to get the bill over the finish line in concert with Chair McHenry. She told Bloomberg, “We’ve been working on this for 22 months. We have put together a legislation – with a few more tweaks that we may have to put to it – that I think is going to bring everyone together.” Continue reading “Ranking Member Waters Promotes Stablecoin Legislation As May 10 Deadline Looms”

stablecoin bill – criticism

Former House Financial Services (HFS) and Senate Banking Committee witnesses – with both pro- and anti-crypto POVs – issued sharp criticism of the “Lummis-Gillibrand Payment Stablecoins Act” introduced yesterday by Senators Cynthia Lummis (R, WY) and Kirsten Gillibrand (D, NY).

Columbia University professor and Zero Knowledge Consulting founder Austin Campbell, who appeared as an industry witness at the April 2023 HFS Digital Assets Subcommittee hearing “Understanding Stablecoins’ Role in Payments and the Need for Legislation”, sees problems with the Lummis-Gillibrand stablecoin bill.

On X, Campbell begins with the “nerdy” issue of the bill’s stablecoin reserve requirements which including physical cash, bank deposits, “90 day or less T-Bills, and repurchase agreements of up to 7 days,” according to Campbell.

He then breaks out at least four areas of concern beginning with: “First, we have a serious technical problem, which is applying the limitation to specific T-bills instead of the portfolio: always do the portfolio people! You don’t want someone going all the way out to 90 days with everything. 60 day or less weighted average maturity for the entire portfolio, please.”

Read Campbell’s tweet thread. Continue reading “New Stablecoin Bill Attracts Criticism; Fed Releases CBDC Research -With A Footnote”

Senate stablecoin bill

Yesterday, the long-rumored stablecoin bill from Senators Cynthia Lummis (R, WY) and Kirsten Gillibrand (D, NY) was revealed with a robust public roll-out. PunchBowl News’ Brendan Petersen importantly noted about the purpose of the bill, “It’s a move designed in part to nudge along separate negotiations in the House.” Read Punchbowl’s coverage.

Called “the Lummis-Gillibrand Payment Stablecoin Act,” the bill is different than the stablecoin section of the Senators’ much broader “Responsible Financial Innovation Act.” [S.2281].

Politico reported yesterday that the Lummis-Gillibrand stablecoin bill uses an updated version of the House’s stablecoin bill before it hit a political tripwire. Read that one.

Sen. Lummis issued a detailed, press release in support of the bill explaining key points of the bill such as:

• • “Protects consumers by requiring stablecoin issuers to maintain one-to-one reserves and prohibiting unbacked, algorithmic stablecoins.”
  • “Prevents illicit or unauthorized use of stablecoins by issuers and users.”
  • “Creates federal and state regulatory regimes for stablecoin issuers that preserves the dual banking system.”

more tips:

• • Sen. Lummis’ release: “Lummis, Gillibrand Introduce Bipartisan Landmark Legislation To Create Regulatory Framework For Stablecoins.”
  • The bill’s text via Punchbowl.

what you should know: In a Congressional version of “Bad Boys 2” starring Sens. Lummis and Gillibrand, “Stablecoins just got real… (video).”

It’s time to land the plane.

Continue reading “New Stablecoin Bill From Lummis-Gillibrand; FAA Reauthorization Is Stablecoin Goal”