Tag: tokenization

CBDCs – Mastercard

Mastercard is continuing to evolve its corporate strategy and the world of Central Bank Digital Currencies (CBDCs) appears to clearly be a part of it as the company tries to stay ahead of whatever is next in payments.

Mastercard CEO Michael Miebach tweeted yesterday that his company is “partnering with several central banks to help them research new digital currencies projects. It starts with understanding what they want to achieve with this technology, then building in transparency, consumer privacy and stability.” In addition, Miebach names Ripple, Fireblocks and Consensys as part of “this new collaboration” for Mastercard’s “CBDC Partner Program.”

Miebach links to a Mastercard article which explains more details on his company’s plans titled: “Is safe the new sexy? CBDCs, trust and the evolution of money.”  The company quotes Jesse McWaters, who leads global regulatory advocacy at Mastercard, as saying that “there are many questions that central banks need to consider… This includes the role of the private sector in CBDC issuance, security, privacy and interoperability – such as how a CBDC works with other commonly used payment mechanisms, what specific challenges CBDCs would solve and whether they’re even the right tool for the job.”

more tips:

Central Bank Digital Currencies (CBDCs) – Mastercard Continue reading “CBDCs Attracting Mastercard’s Corporate Strategy; UK Implementation of Travel Rule Imminent”

Democrats fracture on stablecoins

Is there Democratic infighting on stablecoin legislation? Seems like it. According to Politico’s morning newsletter yesterday, Rep. Sean Casten (D, IL) said: “Without naming names, there are members who are historically very thoughtful – who aren’t just sort of reflexively pro-crypto – who were supporting this and not making really good arguments about it…” Read more. So, who specifically wasn’t making good arguments according to Rep. Casten? And why – according to Rep. Casten? He did not say apparently.

But on X, Consensys Senior Counsel Bill Hughes offered his thoughts on Casten’s accusation in a tweet, “The narrative is that the supporters of these bills – especially the Dem supporters – have somehow been bought by the BIG CRYPTO lobbying effort. Note the eye-wink quote ‘how can these thoughtful people get behind this.’ You’d hope they’d get more imaginative than this, but its all they got.”

Only five House Financial Services Democrats voted for the stablecoin legislation last month at the markup: Rep. Gregory Meeks (NY), Rep. Jim Himes (CT), Rep. Josh Gottheimer (NJ), Rep. Ritchie Torres (NY) and Rep. Wiley Nickel (NC).

It would not be surprising to hear at least one of five Democrats rebuke Casten in the days to come – particularly Rep. Himes and Rep. Torres who appear frustrated with their party’s digital assets stance. Continue reading “Democrats Fracture On Stablecoin Legislation; Coinbase Subsidiary Joins SRO”

Prometheum embers burn

House Republicans led by House Financial Services (HFS) Chair Patrick McHenry (R, NC) are continuing to keep the pressure on any parties associated with the approval of Prometheum’s Special Purpose Broker-Dealer (SPBD) license for digital asset securities. Two new letters (dated August 9) were released by the Chair and 22 (HFS) Republicans yesterday asking The Securities and Exchange Commission (SEC) Chair Gary Gensler (see SEC letter) and Financial Industry Regulatory Authority (FINRA) CEO Robert Cook (see FINRA letter) about how the SPBD approval process worked.

In a press release, the HFS Republicans explain, “The lawmakers are demanding transparency regarding the approval process for Prometheum and raising questions about the risks to national security posed by Prometheum’s reported ties to the Chinese Communist Party.” See the press release.

Prometheum embers – history

This isn’t the first letter the SEC and Chair Gensler has received about the Prometheum process from Republicans -which received added attention when Prometheum CEO Aaron Kaplan appeared as a Democratic witness at a House Financial Services hearing on June 13.

On July 10, a letter by Senator Tommy Tuberville (R, AL) and five House Republicans sent a Congressional letter to Attorney General Merrick Garland and SEC Chair Gensler – appointees of the Democratic Biden Administration – requesting an investigation into Prometheum and Kaplan, suggesting Kaplan may have perjured himself with his testimony in front of Congress regarding his company’s CCP affiliation.

Some Democrats haven’t been happy with the “Prometheum situation,” either. Continue reading “House Financial Services Republicans Demand Answers From SEC, FINRA On Prometheum”

Coinbase launches policy group

Coinbase announced yesterday a new policy group which builds on its previous advocacy efforts known as Crypto435, a Coinbase campaign to organize the crypto community around legislative issues.

Named the “Stand With Crypto Alliance” the new grassroots, non-profit group invites interested parties to mint an NFT with the image of the group’s shield branding, share their contact info for future communications and submit donations.  The Alliance’s “Join” page already shows over 51,000 members as of this writing.

Coinbase says in its previous effort, the inaugural Stand with Crypto shield was minted over 160,000 times – raising $215,000 for crypto advocacy organizations – and a pro-crypto onchain petition garnered over 188,000 signatures.” This time the company appears to be spearheading the advocacy rather than delegating it to other industry organizations. Read more.

Faryar Shirzad, Coinbase’s Chief Legal Officer, tells CNN that “‘We found ourselves kind of overwhelmed, to be honest, by the level of response that we’ve gotten’ to Crypto435, Shirzad said. Across all 435 congressional districts, ‘the amount of energy and and motivation that we’re seeing among the group is enormous, and so we thought we need to evolve this thing.'” Read that one.

more tips:

Coinbase Expands into Canada – press release Continue reading “Coinbase Launches Policy Group; Pitching Progressives On Crypto”

House floor passage

Rep. French Hill (R, AR), Chair of the House Financial Services (HFS) Subcommittee on Digital Assets, Financial Technology and Inclusion expressed optimism on getting digital assets legislation passed on the House floor this fall on Fox Business Friday.

Rep. Hill told Fox’s Maria Bartiromo: “On the digital front, you’re right. America should be the leader in Web3, the leader in distributed ledger technology and digital assets innovation. This will create jobs, expand opportunities for Americans. But again, Gary Gensler at the SEC is operating by enforcement. So what Patrick McHenry, the Chairman of the Financial Services Committee, and I have tried to do working with our friends on the Ag Committee, is create the right, targeted regulatory process for digital assets – both for commodities, over in the Ag Committee, and for tokens that might be considered securities in the SEC jurisdiction. We think this will bring back money to the U.S., jobs to the U.S., and innovation to the U.S., and we hope we can get that through the House floor this fall.” See the video clip on X.

Headlining the recent digital asset bills coming out of the HFS Committee in late July are the digital asset market structure and stablecoin bills. Continue reading “Rep. Hill Talks House Floor Passage For Digital Assets; PayPal On Stablecoin Differentiation”

crypto ATM and NDAA

CoinDesk interviews Brandon Mintz, who is CEO of Atlanta-based Bitcoin ATM Operator, Bitcoin Depot, which has 20% market share. Mintz tells the crypto publication that the bitcoin ATM business is ripe for consolidation -and, that one of the reasons many companies fail, is a lack of compliance to existing regulations. Mintz tells CoinDesk, “My goal was always to create the strongest compliance program and hire really good compliance staff, including a compliance officer that I hired very early on in the business…” Read more.

In late July, Cato Institute did a comparison of the Anti-Money Laundering (AML) and Know-Your-Customer (KYC) aspects of the bills from Senators Elizabeth Warren (D, MA) and Roger Marshall (R, KS) – S.2669 -as well as Senators Cynthia Lummis (R, WY) and Kirsten Gillibrand (D, NY) – S.2281. In each of these bills are specific ATM provisions.

The latest KYC-AML “bill” from the Senate is the National Defense Authorization Act (NDAA) amendment from an alliance of the four Senators and includes ATM stipulations requiring complete disclosure of ATM usage.  How the must-pass NDAA and this amendment shake out in negotiations with the House remains to be seen.

A sampling of the amendment shows the Director of the Financial Crimes Enforcement Network (FinCEN) to requiring “crypto asset kiosk owners and administrators to submit and update the physical addresses of the kiosks owned or operated by the owner or administrator, as applicable, once every 120 days and collect the name, date of birth, physical address, and phone number of each counterparty to a transaction…” See it on Congress.gov.

more tips:

Crypto ATM Number Net Changes – Coin ATM Radar Continue reading “Crypto ATM Compliance Amid NDAA Amendment; Crypto Counsel For CFTC Commissioner”

stablecoin rules – Waters

With the news of PayPal’s stablecoin breaking on Monday, and then the Federal Reserve conveniently introducing new crypto rules for banks a day later, yesterday, House Financial Services (HFS) Ranking Member Maxine Waters (D, CA) kept up the drumbeat of pushback by Democratic leadership on the new stablecoin bill.

“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,” began Waters in her statement released on the Democrats’ House Financial Services website. Later, she doubled down on rejection of the stablecoin bill and what could be construed as a message from the White House: “As I said during last month’s markup, the Republican bill has no chance of actually being signed into law, and I urge Chair McHenry and Committee Republicans to come back to the negotiation table…” Read more.

On Monday, HFS Chair Patrick McHenry had come out in support of PayPal’s new stablecoin efforts.

stablecoin rules – Waters history

It was only last March that Waters was fully supportive of moving a stablecoin bill forward “as quickly as possible” and then suddenly, at the first HFS stablecoin hearing in April, came her about-face with Rep. Stephen Lynch (D, MA), Ranking Member of the Committee’s Subcommittee on Digital Assets, Financial Technology and Inclusion, stridently backing her up. Continue reading “Waters Doubles Down Saying Stablecoin Bill Has ‘No Chance’; SEC Intent On Ripple Appeal”

Fed oversight for crypto

Late yesterday, the Federal Reserve announced a more detailed regime for banks offering, or considering offering, crypto products – or as the Fed terms it – the “novel activities supervision program.” Read the press release.

Among the regime’s elements subject to supervision:

• • “Complex, technology-driven partnerships with non-banks to provide banking services…”
  • “Crypto-asset related activities…”
  • Projects that use [distribute ledger technology] with the potential for significant impact on the financial system…”
  • “Concentrated provision of banking services to crypto-asset-related entities and fintechs…”

Adding to the warning to banks, “The Program will be risk-based, and the level and intensity of supervision will vary based on the level of engagement in novel activities by each supervised banking organization.” The more a bank adds digital asset products, the more it receives supervision by the Federal Reserve.

The announcement is reminiscent of the January 3 warning titled, “Joint Statement on Crypto-Asset Risks to Banking Organizations” by the Fed, Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). See that one (PDF).

The Fed claims in yesterday’s announcement that it’s supporting innovation, but remains – at best – cautious stating, “The goal of the novel activities supervision program is to foster the benefits of financial innovation while recognizing and appropriately addressing risks to ensure the safety and soundness of the banking system.”

As Reuters notes, stablecoins are an important element of the directive, perhaps inspired by Monday’s PayPal stablecoin announcement. “For banks to receive a written non-objection to be able to engage with stabelcoins, banks should demonstrate appropriate risk management, including having systems in place to identify and monitor any potential risks, including cybersecurity and illicit finance threats,” reports Reuters. Read more.

more tips:

Letter SR 23-7: Creation of Novel Activities Supervision Program – FederalReserve.gov

Letter SR 23-8 / CA 23-5: Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens (stablecoins) – FederalReserve.gov Continue reading “Fed Starts Crypto Activities Supervision Program; SEC Accounting Regime Attracts Criticism”