“The U.S. House Financial Services Committee and House Agriculture Committee will put together legislation to oversee the crypto sector in the “next two months” after holding joint public hearings starting May, said Rep. Patrick McHenry (R–N.C.), chair of the House Financial Services Committee.
When asked whether such a bill could be signed by President Joe Biden in the next 12 months, McHenry told a crowd at CoinDesk’s Consensus 2023 event, “yes.” The bill will address both securities and commodities regimes and issues that are hard to fix on either side.
Sen. Cynthia Lummis (R-Wyo.), the other panellist during the session, said the House had a better chance than the Senate at getting legislation through earlier. Lummis told the crowd at Consensus that a new-and-improved version of the bill will be unveiled in six to eight weeks.
We have tried to keep partisan tinge off this subject. This is a bipartisan subject we need to address before the 2024 election.
We have to fix this problem, we have to provide certainty that you can bank in a safe and sound manner. This is a great example of why Congress must legislate and provide clarity. Several jurisdictions are ahead of us. We are falling way behind. These countries are telling us to catch up.”
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“Crypto and blockchain are on the cusp of becoming ordinary, regulated businesses. While it’s always extremely difficult to separate signals from noise, I see three big positive signs for the future.
- Surge in enforcement actions by law enforcement – Enforcement actions are much more effective than warnings and social-media flame-wars.
- Contradictions and inconsistencies in public policies – The legal system must try to make some consistent sense of how the law is applied. In those cases, regulators must present a clear and consistent opinion of what the law means. This clarity will take some time to emerge, but it is coming.
- Maturing industry leadership and product – The boom-and-bust cycle of the tech industry tends to happen when expectations and excitement far outstrip the capacity of companies to actually deliver products and earn revenues.
Not dissimilar to many blockchain and crypto business models in 2018-2022, the dot-com bubble saw companies go public or raise hundreds of millions of dollars without meaningful revenue streams, or occasionally without even well-structured business plans. Today, e-commerce and online business is everything we were promised in 1999. Technology stocks represent more of the U.S. stock market than the financial sector and the energy sector combined. And while there have been ups and downs, there hasn’t been a single technology bust since 2000.
The reason for that is simple: Technology has become a regular industry where valuations are driven by revenue and profit growth, not starry-eyed predictions of the future.
The signs of maturing blockchain and crypto products and businesses are starting to emerge as well. While it’s early days yet, overall, non-fungible tokens (NFT) seem to have found a permanent place in the user and business ecosystem both as collectibles and as digital trophies, tickets and proof of engagement or attendance. At EY, “boring” businesses like supply chain management, product traceability and emissions tracking are all growing as industrial companies put blockchain to work for use cases that have nothing to do with financial engineering. Privacy technology (not to be confused with anonymity) has proven key to unlocking practical use cases among companies that want to leverage shared, public technology infrastructure without sharing their sensitive business information.
As we clear a path through the wreckage of the crypto winter, the same bright future is coming for the blockchain industry. Bad actors are going to jail. Rules are getting clearer. And, most importantly, the companies involved in this ecosystem are starting to build real products and have valuations based on revenue and profits. The result is that blockchain and crypto can become regular industries with regulated products and outputs that are widely accessible.
As a regular industry we will still have ups and downs, but we’ll no longer have ridiculous booms and busts.“
“Blockchain development firm Recursive is bringing a new addition to the crowded Ethereum Layer 2 ecosystem that aims to help connect roll-ups like Optimism, Arbitrum, zkSync, and Starkware, among others.
The project ultimately wants to enable use cases like cross-rollup stablecoins and other DeFi primitives that can aggregate liquidity from different Layer 2 rollups. The Omni platform is being designed to build on top of the EigenLayer, another blockchain protocol.
The Omni Network will collaborate with major rollup partners like Arbitrum, Polygon’s zkEVM, Scroll, ConsenSys’s Linea, and Starkware to launch the first version of the platform in the coming year.
Omni allows developers to think globally, not locally.”
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“Bob Michele, the chief investment officer of J.P. Morgan Asset Management, is unsure how United States regional banks are going to operate when the Federal Deposit Insurance Corporation (FDIC) and Federal Home Loan Banks (FHLB) emergency lending programs expire, warning that the possible collapse of First Republic Bank may cause a domino effect.
Michele blamed the “high price of everything” as a significant factor leading to the recent banking crisis: The “bottom quartile of earners” in the United States have been “most punished” and forced to deplete their deposit balances “just to live,” he said.
I think it’s somewhat naïve to say that this is just limited to First Republic.
Michele believes a resolution is urgently needed as regional banks are “heavily dependent” on the FDIC and FHLB. During the last quarter of 2022, both Signature Bank and Silvergate Bank reportedly received substantial loans from the FHLB — a consortium of 11 regional banks across the United States that provides funds to other banks and lenders — totaling nearly $10 billion and $3.6 billion, respectively.
U.S. Department of the Treasury staff members are reportedly studying ways to expand the current deposit insurance beyond the maximum cap of $250,000 to cover all deposits in the United States. According to the FDIC, domestic U.S. bank deposits totaled $17.7 trillion as of December 31, 2022.”
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“The level of optimism people have about crypto is very high. The people I know best are from traditional finance and they, too, remain quite high on the future of crypto and moving TradFi stuff to crypto or crypto-adjacent infrastructure.
The lack of policymaking and predictable enforcement in D.C. is a wider threat to the U.S. than we might think. It’s a concern for American competitiveness at large and, at this point, it’s really unforgivable. Europe and much of Asia now have relatively clear frameworks – and in what is supposedly a major hub for blockchain industry, we still don’t. That affects an increasingly large number of people and organizations.”
The Disrupt 