International Bodies
BIS Publishes CBDC Report: A new type of market infrastructure in the form of a unified electronic ledger could enhance the global financial system, argues a recent report by the Bank for International Settlements (BIS). This ledger, proposed by the umbrella group for central banks as part of its annual economic report, could combine central bank digital currencies (CBDCs) along with tokenized money and assets on one platform, with the help of automated smart contracts that power transactions on blockchains including Ethereum. More here.
IMF Criticized Banning Crypto: “Well designed, CBDCs can strengthen the usability, resilience, and efficiency of payment systems and increase financial inclusion in [Latin America and the Caribbean],” said the IMF. “While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run. The region should instead focus on addressing the drivers of crypto demand, including citizens’ unmet digital payment needs, and on improving transparency, by recording crypto asset transactions in national statistics.” More here.
United States
SEC Enforcement Speaks on Crypto: “Regulation by enforcement” is “a catchy but tired refrain that’s used effectively by crypto market participants and lobbyists,” said the head of the U.S. Securities and Exchange Commission’s Enforcement Division Friday. “We’re not concerned with the labels. We’re concerned with the offerings, the labels are not important to us,” SEC Enforcement Director Gurbir Grewal said. More here.
Fed Discloses Payments Players: On June 16, the Fed released a database of financial firms that have deposit accounts at the central bank plus those that have requested one. The move, required by Congress in December, is a window into financial institutions that have access to the Fed’s payments rails. Among the firms with a pending application is the crypto exchange operator Kraken. More here.
HFSC Works on Stablecoin Compromise: The Republican Chair of the House Financial Services Committee has released a new draft of the leading U.S. legislative proposal for overseeing stablecoins, and it includes some of the positions of Democratic lawmakers. The bill posted Thursday is still just a draft, meant to be further discussed at a June 13 committee hearing, but it marks another potential move toward a bipartisan negotiation on the legislation that many believe could be the easiest way to take a first step toward U.S. regulation of crypto. More here.
SEC Says It Will Make Coinbase Recommendation: The U.S. Securities and Exchange Commission (SEC) hasn’t decided on whether it will respond to Coinbase’s petition for rulemaking and its enforcement action against the crypto trading platform isn’t inconsistent with any decision on rulemaking, the regulator said June 12. The SEC responded to a court order on how it was currently looking at the rulemaking petition in light of the agency’s enforcement action against Coinbase. More here.
Fed Sees Stablecoin As Form Of Money: Powell’s comments came in response to committee ranking member Maxine Waters, who asked for his reaction to the proposed stablecoin bill, which originated with the Republicans and would be the first crypto legislation in the U.S. if passed. Waters told Powell that the bill would create “58 different licenses with federal regulatory approval over only two of the licenses.” The remaining licenses would be issued by states, territories, and other jurisdictions, which “takes state preemption to a whole new level,” she said. Powell responded: “We do see payment stablecoins as a form of money, […] and we believe that it would be appropriate to have quite a robust federal role in what happens in stablecoin going forward.” More here.
Waters Calls for Input on Crypto Bill: House Financial Services Ranking Member Maxine Waters (D-CA) has called on leadership at federal regulatory agencies to weigh in on a proposed framework for digital assets. The legislation proposed by Republican lawmakers on June 1 aimed to establish a comprehensive framework on digital assets in the U.S. in part by addressing regulatory gaps between the SEC and CFTC. More here.
U.S. Judge Rejects Binance Complaint: A federal judge has rebuffed Binance’s request to curtail the U.S. SEC’s use of language pertaining to Binance US’ management of customer funds in press releases, which the company had argued could hurt it at trial. More here.
Stablecoins, DeFi Likely Next Targets in Crypto Crackdown: Stablecoins and decentralized finance (DeFi) are likely to become the next targets in the U.S. SEC’s crackdown on the crypto industry, Berenberg said in a research report on Tuesday. The investment bank said the SEC may now focus on bringing stablecoins, including the two largest by market cap, tether (USDT) and USD Coin (USDC), and decentralized finance protocols into regulatory compliance. More here.
Enforcement Agencies Form New Task Force: A diverse group of United States enforcement agencies has made official its cooperation on crimes related to the darknet and digital currency with the announcement of the Darknet Marketplace and Digital Currency Crimes Task Force on June 20. The new organization will target “cryptocurrency-enabled crimes” such as drug trafficking, money laundering, theft of personal information and child exploitation. Representatives of Homeland Security Investigations (HSI) Arizona, the Office for U.S. Attorneys, the Internal Revenue Service Criminal Investigation, the Drug Enforcement Administration, and the Postal Inspection Service signed a memorandum of understanding on the new task force last week. More here.
Gensler says Crypto Firms’ Compliance Avoidance “Calculated”: Securities and Exchange Commission Chair Gary Gensler has said that the “vast majority” of crypto tokens are securities and argued that many crypto companies have made a “calculated” decision not to comply. The comments came after high-profile lawsuits filed by the SEC against crypto businesses. More here.