As the U.S. Congress learns about crypto at a slow pace, states are rushing to find out how new financial technology can help them.
There were a lot of stories that had been in the works for a long time that dominated the news last week in the department that deals with cryptocurrency policy and enforcement. It’s been a long time coming, but the Russian government has taken another big step toward creating a unique regulatory framework for digital assets. They said that crypto should be treated like money, not thrown under the rug with a blanket ban. Crypto’s formal legitimization is a good thing, but there are still a lot of questions about both the shape of the new regime and how it will be enforced.
Bitfinex was the biggest enforcement storey of the week, and so far this year. It goes back even further to that heist in 2016. The Department of Justice seized the record-breaking $3.6 billion worth of crypto that was allegedly stolen from the platform. This shows that the US government can follow the money on a distributed ledger.
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There are a lot of crypto-hearings this time of the year again.
Both chambers of the U.S. Congress kept going on their educational trips into different parts of the digital asset space that have become commonplace in late 2021. Commodity Futures Trading Commission Chief Rostin Behnam told the Senate Committee on Agriculture, Nutrition, and Forestry about the limits of his agency’s authority when it comes to crypto assets. He also suggested that senators think about giving the CFTC more power to regulate them.
Committee on Financial Services in the US House was looking over the report from the President’s Working Group on stable coins from December 2021, which was sent to the committee in December of that year. There, Treasury Under Secretary Nellie Liang answered lawmakers’ questions about everything from whether stablecoin issuers should be regulated like banks to the geopolitical consequences of the spread of dollar-pegged private digital currencies. She was there to answer their questions.
In the digital world, the rights of the states are different from those of the people
A bill that Jason Powell proposed to the Tennessee House of Representatives would allow the state and its counties to invest in things like cryptocurrencies and tokens that can’t be bought or sold. A second bill that Powell proposed on the same day wants to set up a study committee to look into how the state legislature can make Tennessee more crypto-friendly.
In the state of New Hampshire, a similar commission will be set up. Its job will be to look into the digital asset industry and the laws that apply to it. This is important because it comes from state Governor Chris Sununu’s order, not from a member of the state legislature. When Sununu talked about crypto, he said that New Hampshire was interested because it was “committed to bringing in high-quality banking and financial businesses.”
Digital money is used in traditional politics.
There has been a lot of talk recently about how the cryptocurrency industry is becoming more and more important in the United States. One of the hallmarks of this process is the lobbying and campaign spending that digital asset firms do to help them and the industry achieve their long-term goals. A study based on data from the nonprofit Open Secrets found that crypto lobbying spending will rise by 116% each year in 2021.
Another way to turn money into political power is to form a political action committee (PAC) to pool funds in support of candidates or policies. There’s a good chance that digital assets will be a big issue in the 2022 midterm elections. Candidates who are very pro-crypto have been popping up across the country in recent months. These politicians will be able to get money from the newly registered Coinbase Innovation PAC in November.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.