This newsletter is sponsored by PHEMEX, the world's best crypto exchange for both spot and leverage. Sign up with the link above and get some free Bitcoin - up to $1200 worth. I really encourage you to check them out.The President's Working Group has finally released their comprehensive report on stablecoins to Congress. The entire industry has held it's breath for months, waiting to see what direction the US government would take.Here are a few of the key quotes. “When regulated, stablecoins could support faster, more efficient, and more inclusive payments options.”“While stablecoins are primarily used to facilitate trading in other cryptocurrencies, they could become widely used by households and businesses to make payments.”“The transition to broader use of stablecoins as a means of payment could occur rapidly due to network effects or relationships between stablecoins and existing user bases or platforms.”“We recommend Congress to urgently pass a law that would regulate stablecoin issuers akin to insured depository institutions, subjecting them to strict supervision by banking regulators while also providing some form of government backstop in the event of crises.”“The team recommends Congress pass legislation that limits stablecoin issuance to insured banks, a move that would give regulators far greater jurisdiction over the industry.”The first few quotes are glowing and somewhat surprising endorsements of stablecoins. I did not expect them to outwardly admit that stablecoins were faster and more efficient than legacy systems, or that their adoption would be swift. It is clear that the government wants to regulate them and then likely move towards adoption. Incredible.As for the other points, I called a friend who is a lawyer that specializes in these very topics, and these are our shared stream of consciousness thoughts: The report concludes that only insured depository institutions should be able to issue crypto pegged to an actual currency. That’s potentially bad news for non-bank companies like Tether and Circle because, unless and until those companies obtain banking charters, they would be out of the market. This can only happen with legislation.The report also finds that custodial wallet providers – like Coinbase, Binance and Gemini – should be subjected to “appropriate federal oversight,” whatever that means. But it will at least mean oversight of risk management along with to-be-determined liquidity and capital requirements. Probably ok for the big boys, but not great for the smaller players. This can only happen with legislation. The report also concludes that any stablecoin activities of depository institutions should be subject to examination and enforcement by the federal banking regulators. This can happen without legislation.The report concludes that FSOC – which Yellen chairs – consider designated some stablecoin activities (like the management of reserve assets that back a stablecoin) systemically important payment, clearing and settlement activities. So again, more regulation. This can happen without legislation. The report didn’t identify any single regulator as the right one to oversee the subsector. Instead, it cited the SEC, CFTC, DOJ, banking agencies and CFPB as all having a role to play. So, probably no change to our already fractured federal (and state) financial services regulatory infrastructure. No surprise there. It’s what keeps lawyers in business.Conclusion? 1 and 2 are highly unlikely to happen because there is no way this divided Congress is going to pass anything like this. 3 and 4 are a lot more likely. 5 is just the status quo. 4 is probably good for the market ultimately. 3 will make banks pause – not a bad thing.Overall, not terrible and on par with expectations that more regulation is coming. I am pleasantly surprised that the report was well balanced, and hopeful that we will get reasonable legislation, albeit it aggressive for existing coins.In This Issue:Stablecoins Are Center StageBitcoin Thoughts And AnalysisAltcoin ChartsSquid Token Mayhem - Buyers BewareVitalik Supports Crypto CitiesAaron Rodgers Will Be Paid In BitcoinThe Wolf Of All Streets Podcast Ft. Brett GibsonMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO
The Wolf Den #363 - Stablecoins Are Center Stage
The Wolf Den #363 - Stablecoins Are Center…
The Wolf Den #363 - Stablecoins Are Center Stage
This newsletter is sponsored by PHEMEX, the world's best crypto exchange for both spot and leverage. Sign up with the link above and get some free Bitcoin - up to $1200 worth. I really encourage you to check them out.The President's Working Group has finally released their comprehensive report on stablecoins to Congress. The entire industry has held it's breath for months, waiting to see what direction the US government would take.Here are a few of the key quotes. “When regulated, stablecoins could support faster, more efficient, and more inclusive payments options.”“While stablecoins are primarily used to facilitate trading in other cryptocurrencies, they could become widely used by households and businesses to make payments.”“The transition to broader use of stablecoins as a means of payment could occur rapidly due to network effects or relationships between stablecoins and existing user bases or platforms.”“We recommend Congress to urgently pass a law that would regulate stablecoin issuers akin to insured depository institutions, subjecting them to strict supervision by banking regulators while also providing some form of government backstop in the event of crises.”“The team recommends Congress pass legislation that limits stablecoin issuance to insured banks, a move that would give regulators far greater jurisdiction over the industry.”The first few quotes are glowing and somewhat surprising endorsements of stablecoins. I did not expect them to outwardly admit that stablecoins were faster and more efficient than legacy systems, or that their adoption would be swift. It is clear that the government wants to regulate them and then likely move towards adoption. Incredible.As for the other points, I called a friend who is a lawyer that specializes in these very topics, and these are our shared stream of consciousness thoughts: The report concludes that only insured depository institutions should be able to issue crypto pegged to an actual currency. That’s potentially bad news for non-bank companies like Tether and Circle because, unless and until those companies obtain banking charters, they would be out of the market. This can only happen with legislation.The report also finds that custodial wallet providers – like Coinbase, Binance and Gemini – should be subjected to “appropriate federal oversight,” whatever that means. But it will at least mean oversight of risk management along with to-be-determined liquidity and capital requirements. Probably ok for the big boys, but not great for the smaller players. This can only happen with legislation. The report also concludes that any stablecoin activities of depository institutions should be subject to examination and enforcement by the federal banking regulators. This can happen without legislation.The report concludes that FSOC – which Yellen chairs – consider designated some stablecoin activities (like the management of reserve assets that back a stablecoin) systemically important payment, clearing and settlement activities. So again, more regulation. This can happen without legislation. The report didn’t identify any single regulator as the right one to oversee the subsector. Instead, it cited the SEC, CFTC, DOJ, banking agencies and CFPB as all having a role to play. So, probably no change to our already fractured federal (and state) financial services regulatory infrastructure. No surprise there. It’s what keeps lawyers in business.Conclusion? 1 and 2 are highly unlikely to happen because there is no way this divided Congress is going to pass anything like this. 3 and 4 are a lot more likely. 5 is just the status quo. 4 is probably good for the market ultimately. 3 will make banks pause – not a bad thing.Overall, not terrible and on par with expectations that more regulation is coming. I am pleasantly surprised that the report was well balanced, and hopeful that we will get reasonable legislation, albeit it aggressive for existing coins.In This Issue:Stablecoins Are Center StageBitcoin Thoughts And AnalysisAltcoin ChartsSquid Token Mayhem - Buyers BewareVitalik Supports Crypto CitiesAaron Rodgers Will Be Paid In BitcoinThe Wolf Of All Streets Podcast Ft. Brett GibsonMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO