Tag: tokenization

subpoena stick

House Financial Services Chair Patrick McHenry (R, NC) made clear in a tweet on X yesterday that he’s serious about potentially issuing a subpoena to Securities Exchange Commission Chair Gary Gensler, a Democrat, if he doesn’t answer Congressional requests – primarily from Republicans. “SEC Chair [Gary Gensler] refuses to schedule a Commission vote to provide Congress with requested documents. Should Gensler continue to stonewall, Republicans will have no choice but to issue the first subpoena to the SEC from my Committee to compel their production.” See more.

McHenry first broached the subpoena at last week’s HFS SEC oversight hearing.

How serious is McHenry about using an unprecedented subpoena with an SEC Chair? Hard to say. But, the threat of a subpoena could create another lever in negotiations with Democratic leadership as Chair McHenry attempts to get key digital assets legislation (stablecoin and market structure bills) through Congress.

Senate Banking machinations

Politico reported yesterday that Senate Banking Chair Sherrod Brown (D, OH) is under pressure by Senator Elizabeth Warren (D, MA) to advance her Digital Asset Anti-Money Laundering Act (see S.2669), but he’s not convinced. Brown tells Politico, “We’re all trying to figure out what regulators can do and where the holes are that we need legislation (…) That’s the real problem. And I don’t know that Warren’s bill does that.” Read more.

Cato Institute policy analyst Nicholas Anthony commented on X about the news: “Senator Brown is right here. It was a bit bizarre when Senator Warren introduced this bill during the FTX hearing as it would do nothing to address the issues behind FTX, but it would levy a hefty blow to financial privacy for American citizens.” Read Anthony’s blog post on the Warren bill from last December on Cato’s blog. Continue reading “McHenry Threatening Subpoena For SEC Chair Gensler Again; Senator Brown Questions AML Bill”

November floor vote?

With the government shutdown drama arguably delayed until at least November 15, the House vote on the stablecoin (“Clarity for Payment Stablecoins Act of 2023“) and digital asset market structure (“Financial Innovation and Technology for the 21^st Century Act“) bills seems back on track.

Prior to Saturday, crypto bills had been thought to be getting “pushed.”

Then again, how much the shutdown has distracted pro-crypto House members and their staffs, led by House Financial Services (HFS) Chair Patrick McHenry (R, NC) and HFS Digital Assets Subcommittee Chair French Hill (R, AR), from educating their House colleagues on digital assets in advance of a vote, would appear to be another potential roadblock to House passage this year.

And then there’s that cannibis legislation in the Senate. Is that the way through the Senate as Democratic leadership (White House, Senate Banking and Chair Sherrod Brown (D, OH), HFS Ranking Member Maxine Waters (D, CA))  “horse trades” new cannibis banking law for stablecoin law? Senator Kirsten Gillibrand (D, NY) said last week she thinks something is possible.

Meanwhile, Rep. Mike Flood’s (R, NE) “Uniform Treatment of Custodial Assets Act” with its bipartisan HFS Committee support looks like a potential candidate for another markup by House Financial Services. Flood’s bill would nullify the controversial Staff Accounting Bulletin 121 (SAB 121) by the Securities and Exchange Commission (SEC) which has inhibited custody services by heavily-regulated TradFi banks. Democrats, who are frustrated with SEC overreach led by its Chair Gary Gensler, could be most easily convinced on this straightforward bill. Continue reading “November Digital Assets Floor Vote Back On?; Wholesale CBDC Possibilities”

hear ye, hear ye

Today, Securities and Exchange Commission (SEC) Chair Gary Gensler will visit House Financial Services for an “SEC Oversight” hearing beginning at 10 a.m. ET.

See the hearing page with live video

The hearing’s memorandum includes a wide range of potential topics – including digital assets. The SEC’s Staff Accounting Bulletin 121 (SAB 121) is at the top of the list. Industry policy executive Cody Carbone of Chamber of Digital Commerce shared on X: “…After meeting with Committee, expect a lot of continued questions on [crypto] with reactions of recent Court cases (Ripple, Grayscale).”

At the beginning of the Q&A during the last House SEC Oversight hearing in April, HFS Chair Patrick McHenry (R, NC) famously tried to get Gensler to say whether he thought Ether was a commodity or a security – but, to no avail. Gensler demurred.

For this hearing, Republican “push back” is expected. But, where will Democrats land? – other than the HFS Democratic leaders, that is. Ranking Member Maxine Waters (D, CA) and Rep. Stephen Lynch (D, MA) have dutifully supported the White House in past hearings and will no doubt come to Chair Gensler’s defense.

hear ye, hear ye – letter

Late yesterday afternoon, and just in time for today’s oversight hearing, a bipartisan letter from Rep. Mike Flood (R, NE) as well as fellow House Financial Services (HFS) Committee Members Rep. Wiley Nickel (D, NC), House Majority Leader Rep. Tom Emmer (R, MN), and Rep. Ritchie Torres (D,NY) arrived in Chair Gensler’s inbox. The gyst of the letter is that the Congressmen are urging the Chair to approve a spot Bitcoin Exchange Traded Product (ETP) “immediately.” See the letter.

If the spot Bitcoin ETP isn’t topic #1 today in today’s hearing, it will be topic #1A. The Congressmen have purposefully telegraphed their move to the Chair. Continue reading “House SEC Oversight Hearing Today; China Submits USPTO Application On Blockchain”

cannabis for crypto

In an interview with Fortune’s Leo Schwartz on Friday at Messari Crypto’s Mainnet event in New York City, Senator Kirsten Gillibrand (D, NY) divulges a possible way forward for digital assets legislation in the Democratic-controlled Senate and the Senate Banking Committee, specifically – a key roadblock to regulation in the United States in the minds of pro-crypto advocates.

Gillibrand sees the possibilities for some “horse trading” as Fortune’s Schwartz writes, “One possible solution would be reaching a compromise on one of the Senate Banking Committee’s priorities – cannabis banking reforms – where the House and Senate committees would take up each other’s bills. Gillibrand said that she has spoken with [Senate Banking Chair Sherrod Brown (D, OH)] about a compromise along those lines, although declined to comment on his openness to the proposal.” Read more.

Gillibrand still sees her Lummis-Gillibrand Responsible Financial Innovation Act as playing a role in Senate efforts to bring digital assets under the U.S. regulatory umbrella. Overall, the fact that the New York Senator is very public about these possible next steps for legislation is new for any sitting, Democratic U.S. Senator. And her influence shouldn’t be underestimated in that her fellow New York State Senator is the Senate Majority Leader Sen. Chuck Schumer (D, NY).

h/t @AlexanderGrieve Continue reading “Cannibis And Digital Assets Legislation May Meet In Congress; Shutdown Means Slowdown”

Sen. Gillibrand on stablecoins

On Friday, Senator Kirsten Gillibrand (D, NY) appeared at Messari Capital’s Mainnet crypto event in New York City on Friday and talked all things digital assets in a conversation with Crypto Council of Innovation’s Sheila Warren. Sen. Gillibrand was remarkably positive about legislation momentum in spite of what may look like Capitol Hill gridlock due to a divided government. Senator Gillibrand is co-sponsor of the Lummis-Gillibrand Responsible Financial Innovation Act and a member of the Senate Agriculture and Intelligence Committees.

Gilibrand cut to the chase: “…passing a stablecoin bill is the low hanging fruit and we should absolutely try to do that this Congress (by the end of ‘24). I also think that passing a market structure bill is possible this Congress and so those two pieces would be the highest priority. We’ve already done the anti-money laundering and know-your-customer and anti-terrorism financing provisions in the defense bill (see NDAA amendment). It’s there. It’s workable, it’s smart, and it can be implemented. So, I would really hope that we can create a national conversation around at least the two next pieces, because it would make a huge difference. And there’s such a willingness on behalf of the leaders. In the House and the Senate to do this. We just need to create consensus and create momentum with other members understanding what’s at stake and why it’s important.”

Suggesting that the lightweight NDAA amendment covers the AML-KYC piece for digital assets seems to challenge the scope of – and growing number of co-sponsors for – Senator Elizabeth Warren’s (D, MA) “Digital Asset Anti-Money Laundering Act.”

Nevertheless, Gillibrand didn’t hesitate on discussing what’s at stake: “If we can regulate, we can keep markets and we can keep participants. It allows our economy to grow, allows us to compete worldwide, and that’s better for New York, it’s better for America.” Continue reading “Crypto Democrats: Torres Challenges Progressives, Gillibrand Bullish On Legislation”

maybe next Congress

Former Senator Pat Toomey (R, PA), Ranking Member of the Senate Banking Committee in the last Congress, appeared before an audience at a Georgetown Law Seminar titled, “National Security and Digital Assets Seminar” yesterday. Toomey said he can’t see any crypto legislation making it into the law books until 2025 at the earliest. CoinDesk’s Jessie Hamilton reports, “‘I don’t see a path forward in the Senate, regardless of how the vote goes in the House,’ [Toomey] said, though he thinks a bill on stablecoins would have the best chance.” Read more.

In the interview, Toomey sees broader implications with digital assets starting with national security. He said, “Technology drives the economy” which pays for the nation’s defense infrastructure.

Later, he explained, “From a national security point of view, I want our currency to be the most technologically sophisticated and to me it seems, right now, stablecoins are a way that provides that technological sophistication, gives our money, abilities, capabilities that it doesn’t have today.”

See video of the entire interview with Senator Toomey.

now leaving the U.S.

In an article titled, “Crypto Companies Are Looking Outside the U.S. for Growth,” The Wall Street Journal reviews whether crypto startups are really leaving the United States for friendlier jurisdictions. The WSJ cites: “Crypto venture-capital firm Ryze Labs, payments company Ripple Labs and Zodia Markets, a digital-asset trading platform backed by Standard Chartered, are all focusing outside the U.S. for growth, executives at these companies said.” Read more.

more tips:

Mike Novogratz’s Galaxy Digital targets Europe for crypto expansion – The Financial Times Continue reading “Former Senator Toomey Sees No Path Forward For Legislation In 118th Congress; On Crypto Leaving U.S.”

Energy & Commerce

Yesterday, House Energy and Commerce’s (E&C) Innovation, Data, And Commerce Subcommittee held a hearing titled, “Mapping America’s Supply Chains: Solutions to Unleash Innovation, Boost Economic Resilience, and Beat China.” See the hearing page.

Committee Chair Cathy McMorris Rodgers (R, WA) and Innovation, Data, and Commerce Subcommittee Chair Gus Bilirakis (R, FL) said in announcing the hearing that the goal was to secure “our long-term global competitiveness in retaining manufacturing, spurring startups, and applying emerging technologies like artificial intelligence, blockchain, and ‘Internet of Things.'”

Subcommittee Chair Bilrakis and Ranking Member Jan Schakowsky (D, IL) presided over the hearing.

See the video of the two-hour hearing.

Energy & Commerce – use cases

Among the witnesses was Justin Slaughter of crypto venture firm Paradigm. In his prepared testimony, Slaughter provided blockchain technology use cases already in process.  He wrote, “…the US Air Force has a blockchain-based supply chain project called BASECAMP, which helps the Air Force ensure timely and secure manufacturing of its essential equipment, and provide a reliable supply of needed parts for maintenance, supporting the ongoing operations of our military globally.”

Download Slaughter’s testimony (PDF) –  a crisp example of the discussion around blockchain technology beyond financial applications, i.e. not crypto.

Slaughter was the only one of the witnesses who spoke to blockchain in their prepared testimony. During the hearing, Slaughter even discusses how unions (i.e. organized labor) see benefits of blockchain.

Energy & Commerce – legislation

According to the hearing’s memorandum, the E&C Subcommittee hearing also supported new, still unnamed, draft legislation related to the supply chain including one bill introduced by Rep. Larry Bucshon (R, IN) involving blockchain technology. “The bill would also establish the ‘National Blockchain Promotion and Deployment Program’ at the DOC (Department of Commerce). The bill would designate the Secretary of Commerce as the principal advisor to the President of the U.S. for policy pertaining to the deployment, use, application, and competitiveness of blockchain and other distributed ledger technologies; and authorize the Secretary to act through the program as necessary and appropriate to promote and assist the deployment, use, application, and competitiveness of blockchain and other distributed ledger technologies,” reads the memo. Continue reading “New Supply Chain Legislation Seeks To Incorporate Blockchain Tech; SEC Chair Hearing In HFS”

pro-crypto lobby

Coinbase’s “Stand With Crypto” lobbying effort, which is now a standalone nonprofit, has been gaining momentum with a retail crypto member base of “10s of thousands of supporters” this year according to The Hill yesterday.

The Hill reports on the next steps, “The group’s new campaign targets federal lawmakers and seeks to get pro-crypto constituents across the U.S. to raise their voices with Congress. The push focuses on nine ‘swing states’: Arizona, California, Georgia, Illinois, New Hampshire, Nevada, Ohio, Pennsylvania and Wisconsin.” Next week, on the same day (September 27) Securities and Exchange Commission Chair Gary Gensler is rumored to appear in front of the House Financial Services Committee, Coinbase is also planning a “Stand with Crypto” day in D.C. Read more in The Hill.

Coinbase U.S. policy executive Kara Calvert suggests the potential implications for both parties with voters: “America’s 52 million-strong crypto constituency is engaged and want both clarity and protections as consumers and job creators.”

more tips:

Regarding “Stand With Crypto,” Politico reported yesterday morning: “Coinbase has granted a new 501c4 organization an eight-figure budget to support organizing efforts, paid media and events.” There was already an event in Ohio last week (see it) with  former Democratic Congressman Tim Ryan. Read more.

today’s markup

The House Financial Service Committee, led by Chair Patrick McHenry (R, NC) and Ranking Member Maxine Waters (D, CA), will commence a markup at 10 a.m. today.  There are 13 bills up for a vote.

See the landing page with a link to livestream.

As blockchain tipsheet discussed on Monday, three bills with anti-Central Bank Digital Currency (CBDC) positioning could present a challenge to the Democratic minority’s leadership: [H.R. 3402] Power of the Mint Act, [H.R. 5403] CBDC Anti-Surveillance State Act, [H.R. 3712] Digital Dollar Pilot Prevention Act. To vote against these bills could be perceived by voters that Dem leadership supports a CBDC which may raise voter concerns around privacy, surveillance and security. Continue reading “House Financial Services Markup On CBDC Today; Giancarlo Advocates For Digital Dollar Future”