Maxine Waters Wants Stablecoin Legislation ‘As Quickly As We Possibly Can’

Maxine Waters

Here’s today’s blockchain tipsheet… prefer it by email? Sign up here.

stablecoins – Waters urges push

Even though the House is not in Session this week, Ranking Member Rep. Maxine Waters (D, CA) of the House Financial Services Committee was talking stablecoin legislation with Yahoo Finance.

Rep. Waters: “I believe the legislation could be passed when we get back to Congress… in [the space of] a few days. We had just about solved all of our problems. The only thing that interfered I think, with this passage (late last year) was the anticipation that the House was going to change, and it was going to be in the hands of the Republicans, and they should take charge rather than those of us on the Democratic side (…). And so I think it’s ready to go and we have resolved most of our issues, and I think we can get it done.”

On a timetable – this month, end of Spring, end of 2023?

Rep. Waters: “Well, I’m not gonna give you a timetable because there’s always uncertainty in negotiations and the way that things get done in Congress. But I want to tell you that I’m focused on it, [Chair Rep. Patrick McHenry (R, NC)] is focused on it. We have a bipartisan effort that we put on it, and we’re gonna do it as quickly as we possibly can.”

See the interview.

Tip: This is arguably the most urgency we’ve heard publicly on stablecoin legislation from anyone in the U.S. Congress – ever.
Continue reading “Maxine Waters Wants Stablecoin Legislation ‘As Quickly As We Possibly Can’”

Senators Lummis and Gillibrand Announce Responsible Financial Innovation Act Re-Introduction

Responsible Financial Innovation Act of 2023

At the Milken Institute’s The Future of Digital Assets Symposium yesterday, Senator Cynthia Lummis (R, WY) and Senator Kirsten Gillibrand (D, NY) made their first appearance together in the new Congress touting the re-introduction of their digital assets regulation bill, the Responsible Financial Innovation Act (RFIA), in mid-April.

Below is an edited transcript of the interview conducted on-stage by Michael Piwowar, Executive Vice President at the Milken Institute.

On the re-introduction of the Responsible Financial Innovation Act in the 118th Congress:

SENATOR LUMMIS: We’re looking at mid-April to reintroduce the bill. And the changes that we’re making would be a slimmed down, better looking [version] adjusting some of the definitions. We’ve been working with the SEC staff to address some of their concerns that there might be some unintended consequences to some of the definitions, but we’ve been meeting with them and taking care of that.

SENATOR GILLIBRAND: We’re also trying to address some of the concerns that we heard through regulators and the industry to clarify different areas. So we’re going to have an ambition to try to build out some of the regulatory framework that we left for studies in the first version.

It might also be a more thorough bill than the first version because the first version was just an introduction of what a baseline framework could look like in the industry, and how you would assess what are digital securities, what are digital commodities, and how you would regulate stablecoins. We had a lot of studies [,too].

Now, we’re going to actually try to do a deep dive on stablecoin regulations. We’re going to refine a lot about digital securities based on conversations we had with Chairman Gensler and the SEC staff. And we’re also going to even broaden out DeFi because [with] DeFi we punted it to the regulators in our first draft. Because of the climate we’re in right now, we think it would be better for us to give our best assessment of what that regulatory framework might look like, as opposed to waiting on regulators since regulators seem to have their own unique opinions. And there doesn’t seem to be any certainty with given regulators. So we thought it’d be better to maybe do our own parameters.

And so those are some of the things we’re working on now. The bill is going to be stronger. It’s also going to address some of the things that happened with FTX. So that it’s very clear if [FTX] was registered as a US company, what it would have had to do and why consumers would not have been so harmed. Continue reading “Senators Lummis and Gillibrand Announce Responsible Financial Innovation Act Re-Introduction”

Staffers See Stablecoin Legislation And DCCPA in 2023

Staffers speak

A swirl of several hundred government relations executives and general counsels from crypto companies around the globe gathered at the Conrad Hotel this week for Blockchain Association’s first annual Policy Summit.

Even amidst the recent implosion of crypto exchange FTX, an agenda sprinkled with an impressive list of elected officials offered hope to a beleaguered audience that could be justified for wanting to update their LinkedIn profile in the past week.

In a panel titled, “Post Midterms Political Outlook: What’s On Deck for the Next Congress?,” Congressional staffers who drive policy discussion on Capitol Hill, provided a behind-the-scenes look at a range of blockchain-related issues facing Congress.

Participants reflected the bipartisan strategy of crypto policy in the House and Senate today with two Democratic and two Republican staffers – who stressed they spoke for themselves and not Members of Congress:

    • Francesco Castella, Senior Policy Advisor for Congressman Ted Budd (R, NC). Rep. Budd, a member of the House Financial Services Committee and the Blockchain Caucus, will be moving to the Senate in the next Congress. Mr. Castella appeared at DeFiCon ( in August in New York City.
    • Rashan A. Colbert, Legislative Assistant for Senator Cory Booker (D, NJ). Sen. Booker, who sits on the Senate Agriculture committee, is co-sponsoring the Digital Commodity Consumer Protection Act (DCCPA). Mr. Colbert appeared in a CFTC financial inclusion webcast about blockchain technology in August.
    • Emily German, Subcommittee Staff Director at U.S. House of Representatives Committee on Agriculture, which has jurisdiction over the Commodity Futures Trading Commission (CFTC). Ms. German serves the interests of Democrats on the House Ag Committee and its Chairman, Rep. David Scott (D, GA).
    • Tim Hite, Financial Services Counsel for Congressman Warren Davidson (R, OH). Rep. Davidson has been an active Member when it comes to cryptocurrency legislation (such as the Digital Taxonomy Act and Token Taxonomy Act) which includes his participation in the House Financial Services Committee and the Blockchain Caucus.

Ron Hammond, Director of Government Relations at Blockchain Association and a former staffer for Rep. Davidson, moderated the discussion.

FTX fallout for this Congress

With FTX’s imploding looming over the conference, Hammond didn’t waste any time by asking staff members about the FTX elephant-in-the-room particularly as it related to DCCPA and where FTX and its founder/CEO Sam Bankman-Fried had taken an active, aggressive role in lobbying efforts.

Just prior to the panel, the House Financial Services Committee announced it would convene a hearing about FTX in December.

Continue reading “Staffers See Stablecoin Legislation And DCCPA in 2023”

FTX Implosion May Be The Catalyst for Fast-Tracking Legislation

Yesterday, Binance, the largest global cryptocurrency exchange, acquired FTX’s global exchange after its founder and CEO Sam Bankman-Fried appeared to have knowingly parked unbacked, illiquid assets on a sister company’s balance sheet – the stuff regulators warn about – which brought FTX to near-insolvency.

As a result, Bankman-Fried did the only thing he could which was to sell FTX to his competitor.

It’s not a good look for crypto and its legislative champions. On the other hand, if you’re rooting for new regulation, this may be what forces Congress’ hand. Guardrails are needed ASAP if consumers are going to be protected and the industry is going to flourish.

The damage

Is the impact from this bigger than the Terra Luna stablecoin debacle in the Spring? Probably.

First, let’s review the “soft” impact…

Sam Bankman-Fried was arguably the most popular industry figure in Washington D.C., appearing multiple times in front of Congressional committees in spite of his global company’s Bahamian address. Now, his name and reputation have taken a devastating hit affecting relationships with the CFTC and Congress especially as it relates to the feedback he was providing on crypto derivatives changes and the Stabenow-Boozman Digital Consumer Commodity Protection Act (DCCPA) coming out of the Senate Ag committee.

Undoubtedly, SBF’s (as Sam Bankman-Fried is colloquially known) actions were damaging to the crypto industry itself which was already dealing with multiple scandals,  hacks and “rugs” making DC power players wonder if crypto is a positive, world-changing innovation or just a fleeting ponzi scheme that allows SEC Chair Gary Gensler to say, “I told you so.”

Moreover, the financial damage wrought by the enormous blunder is still unknown. Are all customer funds safe? Maybe. Seems so. What about FTX’s billions in funds? Likely not. How about FTX’s investors? They’re definitely holding the bag.

One important qualifier in this mess is that (the carve out within FTX which deals with US business) will remain independent from the Binance deal meaning Bankman-Fried is still in the game, so to speak – at least for now – until another shoe drops.

Continue reading “FTX Implosion May Be The Catalyst for Fast-Tracking Legislation”

FDIC’s Gruenberg Sees Crypto and Private Stablecoins As Risk To Banking System


Today at a Brookings event in Washington, D.C., Federal Deposit Insurance Corporation (FDIC) Acting Chairman Martin Gruenberg discussed his government purview and how crypto assets are and should be addressed by banks. Video of the event is here.

Though recognizing blockchain’s innovative qualities, he largely saw huge risk to the banking system from crypto and suggested there is broader FDIC guidance forthcoming.

As he began, Gruenberg noted that innovation is a double-edged sword saying that financial products such as credit default swaps were seen as innovative, but helped cause the Great Financial Crisis in 2008-9. The accessibility and convenience of crypto was attractive to consumers and banks, but Gruenberg believed it was difficult for the banks to move quickly given the dynamic nature of the new assets as tech, business model and use cases are subject to change in short order.

Don’t mix the message

For background, in late July, the FDIC released guidance on how banks should deal with the crypto ecosystem. The over-arching concern from the FDIC was the consumer believing they are insured when they are not.  According to the FDIC, non-banks were offering uninsured crypto asset products and insured bank deposit products but that doesn’t mean for the consumer using these products that their crypto product or asset is insured.


In his speech, Acting Chairman Gruenberg claimed that consumers are often finding they have no one to turn to with distributed ledger technology. If something goes wrong, transactions were difficult to track on the blockchain – a contradiction of pro-crypto advocates who claim it is trackable, sometimes too trackable and presents privacy challenges.

Continue reading “FDIC’s Gruenberg Sees Crypto and Private Stablecoins As Risk To Banking System”

Crypto Meets ‘Global vs. National Regulation’ With Financial System Stability At Stake

IIF AMM 2022


At the height of the Great Financial Crisis of 2008 and 2009, all anybody wanted was stability within the banking system.  Enter 2010’s Dodd-Frank legislation, a “Wall Street reform and consumer protection act,” which sought to put the banking system on a solid foundation and calm domestic and global nerves.

Accordingly, stability was a consistent thread among on-stage discussions last week at The Institute of International Finance (IIF) Annual Meeting which brought together banking titans across industry and government in Washington, D.C. Market structure dynamics, Net Zero initiatives and digital assets mixed with macro issues such as war, inflation and a post-COVID society.

And again… every topic could draw a line to the desire for stability. Yet, that didn’t stop companies within the high volatility, digital asset universe from taking its seat at the IIF table.

In the form of sponsorship for the event – and among a list of TradFi sponsor companies – FTX and Circle were there sending chief executives Sam Bankman-Fried and Jeremy Allaire, respectively, for onstage interviews that engaged a much larger financial community which will one day envelop, embrace or crush all or part of the crypto ecosystem.

BNY Mellon – America’s oldest bank – is already “embracing” as it announced crypto custody services last week after receiving approval from New York State’s financial regulator. Michael Demissie, Global Head of Digital Assets and Advanced Solutions at BNY Mellon said at the conference, “Digital assets is a much broader sector. I think crypto is really just the tip of the spear.” Beyond Bitcoin, Ether and other cryptos, he said settlement and tokenized assets enabled by blockchain technology are in its infancy, but on the way.

The IIF meeting’s exhaustive agenda (PDF) showed that crypto is clearly on the mainstream banking system’s radar but still early in its TradFi implementation. The heavily regulated banking sector’s reluctance ranges from a belief by some that crypto is a speculative “Ponzi” scheme to hesitation tied to a lack of regulation – money transmitter licenses for exchanges and the like, notwithstanding.

Continue reading “Crypto Meets ‘Global vs. National Regulation’ With Financial System Stability At Stake”

Fed Needs To Maintain Oversight on Crypto -And Stablecoins Which Align With US Dollar

Michael Barr, Federal Reserve

The Federal Reserve added its fingerprints to DC Fintech Week as the recently appointed Michael Barr, Vice Chair for Supervision of the Board of Governors at the Federal Reserve, presented a policy address titled “Managing the Promise and Risk of Financial Innovation.”

Get the transcript of Barr’s speech on the Fed’s website.

Barr began by recognizing the broad umbrella of fintech – without mentioning crypto – saying that financial innovation can positively grow the financial system, serve consumers more efficiently and better address underserved communities.

Unsurprisingly, he believed the fintech roadmap ahead included regulation:

“I would note with some humility that striking the right balance between creating an enabling environment that supports innovation and managing related risks to businesses, households, and the stability of the financial system is no easy task. When regulations are too prescriptive or regulators too cautious, they run the risk of stifling innovation and locking in the market power of dominant participants in ways that can raise costs and limit access. When regulation is lax or behind the curve, it can facilitate risk-taking and a race to the bottom that puts consumers, businesses, and the economy in danger and discredits new products and services with consumers and investors.”

Barr then re-iterated crypto themes of fraud, manipulation and money laundering and made clear that oversight was necessary both inside and outside banks.

Outlining the oversight committee, he said that the Federal Reserve Board of Governors was working with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) “to ensure that crypto-asset-related activities banks may become involved in are well regulated and supervised, to protect both customers and the financial system.”

He emphasized that the oversight regime didn’t mean to “discourage banks from providing access to banking products and services to businesses associated with crypto-assets.” Perhaps this will increasingly assuage concerns coming from institutional investors who have moved slowly with digital asset investment due to a lack of approved government guardrails for the new crypto ecosystem.

So regulation needed; and oversight already happening.

Continue reading “Fed Needs To Maintain Oversight on Crypto -And Stablecoins Which Align With US Dollar”

The Fed Wants A Stablecoin Law From Congress

The Fed Wants A Stablecoin Law

Stablecoin legislation is on the minds of DC policymakers this fall as it remains among the lowest of the low-hanging legislative initiatives in crypto which could ultimately result in a law.

Given the widespread agreement on its need, the only question seems to be – is it this year or next?

As Congress began its return from recess last week, The U.S. Federal Reserve brought its lens to stablecoins. Fed Chair Jerome Powell and its new Vice Chair for Supervision, Michael S. Barr, participated in D.C. think tank events.

Mr. Barr presented at the Brookings Institution conference and provided a broad overview of his priorities which center on maintaining the stability of the U.S. banking system which seemingly puts him front-and-center in the stablecoin debate.

The Vice Chair position Barr now holds was originally established due to passage of the Dodd-Frank Act and addressed the need for a financial watchdog given the extreme risk-taking by banks that led to the Great Financial Crisis of 2008.

Prior to joining the Fed, Barr was in academia as dean of the University of Michigan. He’s also very familiar with crypto having served as an advisor in 2015 to Ripple Labs.


In his speech, Barr aligned himself with the urgent calls in favor of stablecoin rulemaking saying, “Stablecoins, like other unregulated private money, could pose financial stability risks. History shows that in the absence of appropriate regulation, private money is subject to destabilizing runs, financial instability, and the potential for widespread economic harm.”

Vice Chair Barr added that he believed Congress needs to work quickly on legislation that brings stablecoins “inside the prudential regulatory perimeter.”

Continue reading “The Fed Wants A Stablecoin Law From Congress”