Acting CFTC Chair Caroline Pham announced new leadership and members for the Global Markets Advisory Committee and its subcommittees, emphasizing the importance of expertise in digital assets and market structure to shape policy and regulatory clarity, with notable appointments including Scott Lucas of J.P. Morgan and Sandy Kaul of Franklin Templeton.
Senate Republicans are divided over the Digital Asset Market Structure Bill, with Senator Kennedy cautioning against rushing it due to unresolved questions, while others push for a comprehensive, bipartisan regulatory framework. The debate reflects broader disagreements within Congress and the crypto industry about how to regulate digital assets, with potential implications for the U.S.'s position as a global crypto hub.
The U.S. CFTC is planning to unify spot and futures crypto trading under a single regulatory framework through the 'Crypto Sprint' program, aiming to streamline regulation and clarify the roles of different regulators in the sector, in collaboration with the SEC.
The U.S. Department of the Treasury has issued a request for public comment on the uses, opportunities, and risks of AI in the financial services sector. This initiative aims to understand AI's impact on consumers, investors, and financial institutions, and to gather recommendations for enhancing legislative and regulatory frameworks. The Treasury seeks diverse perspectives to promote inclusive and equitable access to financial services through AI innovations. Comments are open for 60 days and will be publicly available on regulations.gov.
The FCC has approved a regulatory framework allowing satellite operators like SpaceX to use radio waves from terrestrial mobile partners to keep smartphone users connected outside cell tower coverage. This framework, known as Supplemental Coverage from Space (SCS), would operate as a secondary service to companies providing Mobile Satellite Services (MSS). The approval is expected to enable new services without the need for additional spectrum or device generations, and it could potentially end dead zones and provide backup connectivity in the event of disasters. Other countries are closely watching the U.S. to inform their own rules for allowing satellites to use spectrum from terrestrial partners.
Governor Michelle W. Bowman addressed the ABA's Conference for Community Bankers, emphasizing the importance of defining and treating community banks fairly within the regulatory framework. She highlighted the need for effective prioritization of risks, improved transparency, and predictability in the bank regulatory framework, and emphasized the importance of tailoring regulations to the activities and risks of community banks. Governor Bowman also encouraged stakeholders to provide input during the interagency effort to reduce regulatory burden, stressing the significance of preserving the role of community banks in the banking system.
Blue Origin, SpaceX, and Virgin Galactic, along with two experts, testified at a Congressional hearing, urging for regulatory improvements in the commercial space sector. The companies argued that the current regulatory framework, known as "Part 450," is hindering growth and innovation in the industry and putting the US at risk of losing its lead in spaceflight. They called for a more streamlined process, increased resources for the Federal Aviation Administration (FAA), and an extension of the learning period to ensure safety and allow for continued development. The hearing mainly focused on the FAA's Office of Commercial Space Transportation and its role in issuing launch licenses.
The Australian Treasury has released a consultation paper proposing to regulate cryptocurrency exchanges instead of individual tokens, requiring exchanges to obtain a financial services license from the local financial regulator if they hold more than $3.2 million or $946 per individual. The proposed regulatory framework aims to address consumer harms while supporting innovation in the digital asset sector. The proposal has received mixed reactions from crypto exchanges, with some calling it thoughtful and others expressing disappointment at the approach of fitting crypto into existing financial services regulation. The Treasury is seeking feedback on the proposal until December 1, 2023.
California Governor Gavin Newsom has signed the Digital Financial Assets Law, establishing a regulatory framework for the crypto industry under the Department of Financial Protection and Innovation (DFPI). The law requires businesses to obtain a DFPI license and comply with auditing and record-keeping requirements. This move addresses the need for regulatory clarity in the crypto sector and sets a precedent for other states. However, the absence of a comprehensive U.S. regulatory framework remains a concern, and California's law is seen as a step in the right direction.
Fitch Ratings has warned that it may downgrade the credit ratings of over a dozen US banks, including major Wall Street lenders, due to downward pressure on the country's sovereign debt rating, gaps in regulatory framework, and uncertainty over interest rates. Another downgrade of the industry's score would force Fitch to reassess ratings on more than 70 US banks, potentially impacting banking giants like JPMorgan Chase and Bank of America. This comes after Moody's recently downgraded the ratings of 10 banks and placed six banking giants on review for potential downgrades, citing concerns over interest rates and commercial real estate risks.
Senators Cynthia Lummis and Kirsten Gilibrand are renewing their efforts to pass a crypto regulation bill that they co-sponsored last year. The proposed bill aims to create a federal regulatory framework for the digital asset sector, including registration requirements for crypto exchanges and clarifying the regulatory responsibilities of different agencies. The move comes amidst a mix of regulatory challenges and positive developments in the industry, such as recent ETF filings and lawsuits against major exchanges. The bill has received positive feedback from industry experts, but concerns have been raised about its deference to existing securities laws and potential confusion. The House bill is still in progress, with efforts to make it a bipartisan proposal.
Bittrex has filed a motion to dismiss the legal dispute with the SEC, arguing that the SEC lacks the authority to regulate cryptocurrencies as securities unless explicitly granted by Congress. Bittrex aligns its arguments with Coinbase, asserting that assets traded on secondary markets should be considered commodities or other digital assets, not securities. The exchange also claims that the SEC did not adequately communicate that its actions were prohibited. Bittrex's motion to dismiss follows the SEC's charges against the exchange for running an unregistered national securities exchange.
US Securities and Exchange Commissioner Hester Peirce, also known as "Crypto Mom," argues that cryptocurrency laws in the United States should not assume that every use of crypto is financial. She believes that the regulatory framework should be reserved and flexible enough to accommodate new uses of crypto and blockchain technology. Peirce emphasizes the importance of protecting investors but also allowing individuals to invest their own money as they choose. She advocates for self-regulation within the crypto industry and criticizes the SEC's current approach, calling for a rethinking of how innovation is approached.
Fed Governor Michelle Bowman has criticized the lack of a clear regulatory framework for digital assets in the US, warning that financial institutions have been left in a "supervisory void" in terms of emerging technologies. Bowman called for attention from global regulators to the current supervision of novel banking activities, in particular banking as a service and digital assets. Without a clear regulatory framework, regulators may impose new requirements on businesses after significant investments have been made, she added.
Pro-XRP lawyer John Deaton predicts that the US Securities and Exchange Commission (SEC) will continue its anti-crypto agenda until big banks like JPMorgan and Goldman Sachs can acquire a larger share of the market. Deaton believes that once the banks have their piece of the crypto pie, US officials will conveniently draw up a regulatory framework for the industry. The recent charges against Coinbase and Binance are part of this agenda, and Deaton expects large institutions to buy up much of the industry.
