A cryptocurrency mining rights bill prohibit the discrimination of crypto

Following its victory in the state Senate, a piece of legislation pertaining to cryptocurrency mining rights and regulations that would prohibit discrimination against crypto miners is one step closer to becoming a reality.

The proposed laws would protect mining that takes place “at home” and strip local governments of the power to use zoning laws to stop crypto mining operations. They would also enshrine a “right to mine digital assets” and prohibit “discriminatory” electricity rates from being charged to cryptocurrency miners.

In addition to this, it forbids the imposition of additional taxes on the use of cryptocurrencies as a method of payment and proposes classifying “digital assets,” which include cryptocurrencies and nonfungible tokens, as “personal property,” in the same category as other financial products like stocks and bonds.

On February 23, the measure received a vote of 37 in favor and 13 against in the state Senate. It will now be considered for passage in the House of Representatives. In the event that it is also approved there, the last stage would be for it to be signed into law by Governor Greg Gianforte, who has the option to either sign the measure into law or veto the bill.

Mining “provides good economic value” and has the ability to “stabilize the grid and provide income for infrastructure enhancements,” as stated in the law, which outlines that Montana wants to “protect the right to mine” cryptocurrency and “provide legal clarity” for miners.

The text of the law was drafted with the assistance of the Satoshi Action Fund, which is an organization that advocates for Bitcoin (BTC).

In April of 2019, the county of Missoula in the state of Montana established regulations that forced miners to operate only in light and heavy industrial areas and compelled miners to solely utilize renewable energy. These regulations were enacted. The zoning regulation of the county would be overturned if the bill were to be enacted.

A similar law that seeks to protect crypto miners from discrimination was approved by the Mississippi state Senate at the beginning of February and is now making its way to the Mississippi House of Representatives.

In the meanwhile, the Digital Asset Mining Protection Act of Missouri was submitted to the state legislature in the middle of January with the intention of safeguarding the legal rights of cryptocurrency miners.


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The Most Unworkable State Law

The cryptocurrency industry has recently criticised a bill that was recently proposed in the Illinois Senate due to its “unworkable” intentions to compel blockchain miners and validators to perform “impossible things.” One example of this would be undoing transactions if a state court ordered them to do so.

The Senate Bill was surreptitiously submitted into the Illinois senate on February 9 by Illinois Senator Robert Peters. However, it does not seem that the community was aware of it until February 19, when Florida-based attorney Drew Hinkes mentioned it in a tweet.

The bill, which would give the courts the authority to alter or rescind a blockchain transaction that was carried out through the use of a smart contract, would be given the title “Digital Property Protection and Law Enforcement Act,” and it would give the courts this authority in response to a valid request from the attorney general or a state’s attorney that is made in accordance with the laws of Illinois.

Any “blockchain network that executes a blockchain transaction originating in the State” would be subject to the act if it were to become law.

When it comes to blockchain technology and cryptocurrencies, Hinkes referred to the proposed legislation as “the most impractical state law” he has ever seen.

“This is a shocking about-face for a state that was previously supportive of innovation. Instead, he tweeted that the state had enacted “probably the most impractical state legislation relating to cryptocurrency and blockchain I have ever seen.”

According to the provisions of the law, miners and validators on the blockchain might be subject to fines ranging from $5,000 to $10,000 for each day that they disobey the instructions of the court.

Hinkes said that it would be “difficult” for miners and validators to comply with the measure suggested by Senator Peters, despite the fact that he acknowledged the need of passing legislation that would increase consumer protection.

Hinkes was also surprised to learn that miners and validators who worked on a blockchain network that “has not adopted reasonably available processes” to comply with the court orders would have “no defense” open to them.

The law also seems to dictate that “any person utilizing a smart contract to supply goods and services” must include code in the smart contract that may be used to comply with court orders. This code can be used to ensure that the terms of the smart contract are followed.

“Any person utilizing a smart contract to supply goods or services in this State should incorporate smart contract code capable of implementing court orders respecting the smart contract,” is the full text of the law.

Other members of the bitcoin community have replied with derision of the measure in a manner similar to what was previously said.

On February 19, the crypto analyst “foobar” remarked to the 120,800 people who follow him on Twitter that court-ordered transactions would need to be changed “without having the private key” of the participants, which he found to be “hilarious.”


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ShapeShift Responds to Elizabeth Warren

According to a recent statement, the noncustodial cryptocurrency exchange platform ShapeShift refuted Senator Elizabeth Warren’s claims of “illicit financing,” suggesting that she used the platform as a scapegoat to “push” her most recent crypto bill. Senator Warren had accused ShapeShift of “illicit financing.”

The cryptocurrency exchange ShapeShift claimed in a tweet sent out on February 19 that Senator Elizabeth Warren made “mistakes” in her “analysis” of the platform during a hearing held by the Senate Banking Committee on February 14 and titled “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets.” The hearing was entitled “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets.”

In a subsequent tweet, ShapeShift refuted Warren’s claims that it was involved in “illicit funding” by asserting that it “never handles user monies” and that it is unable to “enable this.”

This comes as a result of Warren’s comments made at the senate hearing in which he implied that ShapeShift had hidden reasons for reorganizing itself as a DeFi platform in July of 2021.

Warren said that the reorganization was done to entice users to “wash” their money through the site.

In addition to this clarification, Shapeshift said that it is “not an exchange,” expanding on the fact that it is an open-source cryptocurrency dashboard that “connects users” to various protocols and platforms.

It went on to say that it cares about the “same things” as Warren, specifically naming “user safety” and “access to innovation” as areas of concern that are shared by the two parties.

By providing a link to its discussion forum, ShapeShift urged Warren and other individuals to “constructively participate” in the issue of financial independence and innovation with its community.

This comes only a day after Erik Vorhees, the CEO of ShapeShift, took to his personal Twitter account on February 18 and stated that he is looking forward to “submitting a proposal” to the Shapeshift DAO governance process in response to Elizabeth Warren’s criticism of the platform. Vorhees made this statement in response to Warren’s criticism of the platform.

Warren has been an outspoken critic of cryptocurrencies in recent months. He said in an interview on January 25 that the United States Securities and Exchange Commission (SEC) should “double down” on its attempts to regulate cryptocurrencies since the sector is nervous about what lies ahead.

She said that the previous administration of the SEC “basically gave the green light” to set up a market for cryptocurrencies that was “full of garbage tokens, unregistered securities, rug pulls, Ponzi schemes, pump and dumps, money laundering, and sanctions evasions.”


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Elizabeth Warren Wants SEC to Double Down on Crypto Enforcement

Elizabeth Warren, a senator in the United States who is well-known for her scepticism regarding cryptocurrencies, recently issued a call to action for the Securities and Exchange Commission (SEC) to “double down” on its attempts to regulate virtual currencies. She did so by urging the SEC to “double down” on its attempts to regulate virtual currencies. She is drawing attention to the fact that those involved in the bitcoin industry are now doing their business “scared” of what is going to happen by behaving in this way.

The words that Warren made were a part of an interview that took place on January 25 with the American Economic Liberties Projects. The interview was conducted by the American Economic Liberties Projects. It was Elizabeth Warren who first brought up these accusations.

The senator was of the opinion that ever since Gensler was inaugurated in as chairman of the SEC in April 2021, the Commission “has made a decent start” toward repairing some of the issues that were caused by the previous leaders of the SEC during the time that the Trump Administration was in power. This statement was made in reference to the fact that Gensler took over as chairman of the SEC in April 2021. This comment was made in response to the fact that Gensler assumed his position as chairman of the SEC in April of 2021. The senator believed that this was the case and expressed his opinion as such.

Warren stated that the previous administration of the SEC “basically gave the green light” to set up a market for cryptocurrencies that was “full of garbage tokens, unregistered securities, rug pulls, Ponzi schemes, pump and dumps, money launderings, and sanctions evasions.” Warren was referring to the fact that the market for cryptocurrencies was “filled with garbage tokens.” When Warren said that the cryptocurrency market was “packed with trash tokens,” he was alluding to the fact that the market was flooded with worthless tokens. When Warren referred to the market for cryptocurrencies as being “stuffed to the gills with garbage tokens,” he was making a reference to the fact that the market was awash with tokens that had no value.


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US Senate Bill Proposes to Empower CFTC to Oversight Tokens & Digital Assets

On Wednesday, a group of Democratic and Republican members on the Senate Agriculture Committee introduced a bill that aims to give the Commodity Futures Trading Commission (CFTC) authority over the markets for Bitcoin and Ether, as well as any other digital assets that are considered to be commodities.

Senators who sponsored the bill include U.S Senate Agriculture Committee Chairwoman Debbie Stabenow, a Michigan Democrat, and Sen. John Boozman, a Republican from Arkansas.

The lawmakers said the bill would offer much required regulatory clarity to the cryptocurrency market by placing a major portion of its oversight under a single regulator.

The new bill seeks to give the CFTC direct oversight of cryptocurrencies that qualify as “digital commodities.”

It would also require firms offering crypto platforms to register with the CFTC, including exchanges, custodians, and brokers.

“One in five Americans have used or traded digital assets — but these markets lack the transparency and accountability that they expect from our financial system. Too often, this puts Americans’ hard-earned money at risk,” stated Stabenow, chairwoman of the Senate Agriculture Committee, which oversees the CFTC.

Such registration would come with requirements from the CFTC to ensure that crypto companies maintain adequate financial resources, avoid conflicts of interest, prevent abusive trading practices, maintain fair pricin, and cybersecurity protections, including other consumer protection measures.

The bill further acknowledged other financial watchdogs have a role in regulating cryptocurrencies that are not commodities but function more like securities or other payment methods.

Stabenow told media journalists that the bill is not designed to cover the entire crypto market or undermine the Securities and Exchange Commission (SEC) ‘s ability to oversee digital assets that function more like securities.

“We’re not defining what a security is. I have great confidence in Chairman Gensler to be able to use his authorities,” she elaborated.

The bill’s focus on Bitcoin and Ether as commodities fits with the views of SEC boss Gary Gensler, who in the recent past said most other cryptocurrencies are likely to be securities.

While Stabenow and Boozman stated that they wanted to move ahead with the bill as quickly as possible, they did not mention a precise timeline. The window for legislative action will come to an end before the November midterm elections.

Efforts Towards Crypto Regulation

The latest bill follows other lists of legislation proposed in the recent past to clarify the rules surrounding cryptocurrencies.

In June, as reported by Blockchain. News, U.S. Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) proposed a bipartisan cryptocurrency regulation bill that aimed to give the digital assets market much-needed definitions that would enable a regulatory framework to fall into place.

The proposed bipartisan Senate bill set the stage for establishing definitions for digital assets. The bill further proposed to create an advisory committee to develop guiding principles and to give regulatory authority for digital assets to the Commodity Futures Trading Commission (CFTC).

In March, the U.S. House of Representatives Patrick McHenry (R-N.C.) and Stephen Lynch (D-Mass.) introduced a bill that proposed the creation of a working group constituted of industry experts and representatives from the U.S. Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) to evaluate the current legal and regulatory framework around digital assets in the U.S.

Image source: Shutterstock


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Nayib Bukele Criticises U.S. Does Not “Stand for Freedom”, the Senate Comm Passes ACES Bill

El Salvador President Nayib Bukele has lashed out at the United States Government after the Senate Foreign Relations Committee passed the Accountability for Cryptocurrency in El Salvador Act (ACES) Bill, which is now slated to head to the full house for voting.


The ACES Bill seeks to monitor how El Salvador implements its Bitcoin law which grants the digital currency a legal status alongside the United States Dollar.

The bill will grant relevant U.S. agencies the right to monitor the impact of BTC as a legal tender on the country’s macroeconomic stability and public finances. It will also assess the role of Bitcoin in the rule of law in the country and its democratic governance. While the date of voting in the bigger house has not been announced, the bill grants the agencies the right to peek into the most salient aspects of monetary governance, including whether the country is adhering to relevant anti-money laundering rules.

Lamenting on Twitter, Nayib Bukele said he never dreamt of a time when the U.S. government would be scared of the work that is being done in the Central American nation. Bukele said the U.S. government does not support freedom as is popularly being said of the North American nation.

“The U.S. Government DOES NOT stand for freedom, which is a proven fact. So we will stand for freedom. Game on!” Bukele said in a tweet.

El Salvador’s adoption of Bitcoin as a legal tender has always met with resistance from prominent intergovernmental organizations. While the International Monetary Fund (IMF) and the World Bank are amongst those who have expressed pessimism concerning the country’s Bitcoin adoption move, the likely passage of the ACES Bill by the U.S. Senate has formed a more unsettling struggle for the El Salvadoran president.

Either way, things play out, Bukele is still arguably committed to Bitcoin’s financial freedom.

Image source: Shutterstock


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Vale Diem: How Facebook’s ambitious stablecoin project came to an end

On Jan. 31, Meta, formerly known as Facebook, announced that it was pulling from its stablecoin project, Diem, formerly known as Libra. Intellectual property and other assets related to the operations of the Diem Payment Network were to be sold to Silvergate Capital Corporation, essentially meaning the end to Mark Zuckerberg and his corporations’ stablecoin aspirations, at least in their current shape. This also marks the end of a once-groundbreaking initiative that was revealed in 2019 with a promise to bring a global alternative to fiat money to Facebook’s 2-billion-strong user base. Here is how this plan went from the initial announcement to the shutdown.

Phase 1: The white paper

The news of Facebook launching its own digital currency came as a boost of optimism for the social media giant, whose brand in the late 2010s came to be associated with the lack of privacy and ethics, as well as disfunctional governance.

On June 18, 2019, the company released the white paper of its prospective global stablecoin under the name “Libra.” The prospective asset was to be backed by its own blockchain on the operational side and by a reserve of various assets (a basket of bank deposits and short-term government securities) on the financial level.

From the very beginning, Libra didn’t try to pretend to be a decentralized cryptocurrency — its governance mechanism was designed as a consortium (the “Libra Association”) including big-name companies such as Mastercard, PayPal, Visa, Stripe, eBay, Coinbase, Andreessen Horowitz, Uber and others. Facebook itself was “expected to maintain a leadership role.” The social media giant also planned to maintain its influence by running a wallet, Calibra.

The project’s original positioning was to serve not as a speculative asset but as a service payment tool. The minting of new tokens was tied to the process of buyout by “authorized resellers” from among the association’s members.

Initial reception

The white paper received mixed feedback from the crypto community. Some of the industry opinion leaders decried the compromises that Facebook’s project had made in terms of both decentralization and security. Bitcoin (BTC) advocate Andreas Antonopoulos, for example, denied Libra the status of cryptocurrency on the basis that it lacked any of crypto’s fundamental characteristics, such as being public, neutral, censorship-resistant and borderless.

Others, however, preferred to focus not on the actual project’s design but on Libra’s potential effects on global crypto adoption. “Some of the biggest companies in the world are starting to recognize the promise of cryptocurrency and see its potential for changing the way consumers and businesses interact globally,” said Tron founder and CEO Justin Sun at the time.

But perhaps the most important thing about the Libra project was its potential to sidestep both existing crypto and fiat currencies alike — not by the virtue of its technical or design superiority but solely due to the network effects of having over 2 billion users on board from day one.

As Ross Buckley, a digital economy expert and professor at the University of New South Wales, warned in his paper, “Libra is perhaps the ultimate example of something that is highly likely to move from ‘too small to care’ to ‘too big to fail’ in a very short period of time […] This is an alternative money.” Buckley surely wasn’t alone in his fears — the obviousness of Libra’s inherent power predestined the enormous pressure it would get from the regulators.

Phase 2: Regulatory pushback

It took the United States Senate less than a month to get Libra co-creator David Marcus to testify at a special hearing, where the Facebook executive was exposed to a fervent grilling. Notably, it was not only Senator Sherrod Brown but also his perpetual opponent Senator Pat Toomey, who bombarded Marcus with hard questions (although Toomey also called not to “strangle the baby in the crib”). The news about Facebook’s private currency hadn’t gone unnoticed even by the then-President Donald Trump, who reacted in his signature expressive manner:

If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.

The pushback was not confined to the United States. In September 2019, French Finance Minister Bruno Le Maire declared that his country and the whole of Europe wouldn’t tolerate Facebook’s new project because the “monetary sovereignty of states is at stake.” Weeks later, the Bank of England issued a warning that, for it to become legal in the United Kingdom, Libra would have to meet all the necessary standards of traditional banking compliance.

What followed these statements was the first wave of backouts from some of the Libra Association’s founding members. With such companies as PayPal, Visa, Mastercard, eBay and Mercado Pago quitting the project, its image took a huge hit.

But back then, Facebook speakers played down the significance of these events. “Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up,” wrote Marcus on Twitter.

By October 2019, five European nations — France, Germany, Italy, Spain and the Netherlands — had created an unofficial task force to prevent Libra’s launch in Europe. The pressure rose to the point when the CEO of the Netherlands’ largest bank, Ralph Hamers, publicly commented on the possibility to cut any operations with Facebook.

Phase 3: The rebranding that didn’t help

Facebook’s response to the pressure came in April 2020 in the form of “Libra 2.0.” The updated white paper introduced four key changes “to address regulatory concerns,” most notably of which was the switch from a single currency to a family of stablecoins, each backed by a single national currency (such as the U.S. dollar, euro and British pound).

As Brieanna Nicker from the Brookings Institute wrote at the time, “It also could be seen as a scaling back of Facebook’s ambitions, for the proposal is now more like a PayPal with a different technological backbone than a competitor to sovereign currencies.” Among other stated changes were the enhanced compliance framework and transition from a permissioned to permissionless blockchain within five years.

On Dec. 1, 2020, Facebook complemented the technical adjustments with a brand change: Libra became Diem, and Calibra became Novi. According to the company’s statement, this transition should have marked “a new day for the project.” The renaming came a week after the disclosure of a plan to launch the first USD-backed stablecoin.

At that time, the second version of the project was still officially opposed by the G7. Olaf Scholz, the current federal chancellor of Germany, who then served as a finance minister, called Diem “a wolf in sheep’s clothing,” stating that the name change hadn’t convinced the regulators.

Further pullbacks

The year 2021 didn’t bring good news for Diem. As the long-awaited launch has been delayed once again (by that time, Switzerland’s Financial Market Supervisory Authority still hadn’t granted grant Switzerland-based the Diem Association a payment license), on Feb. 23, the European Central Bank demanded from the European Union lawmakers a veto power to unilaterally block any private stablecoin projects when necessary.

In September 2021, The Washington Post reported on the ongoing attempts of Facebook’s top management to reach some compromise with U.S. regulators. But apparently, the negotiations stalled, as Marcus’ claim that Diem “has addressed every legitimate concern” caused public blowback from lawmakers.

The chairwoman of the House Financial Service Committee, Maxine Waters, retorted that rebranding had nothing to do with solving the major privacy, national security, consumer protection and monetary policy concerns. Top Republican member of the same committee, Representative Warren Davidson, sardonically mimicked Marcus’ blog post:

I’m not sure how Facebook and the Diem Association could have addressed ‘every legitimate concern’ whenever there’s overarching regulatory uncertainty that permeates many facets of the crypto space.

The last glimpse of hope sparked when, in a partnership with Binance, Facebook finally launched the pilot version of Novi Digital Wallet — a vital part of the planned Diem ecosystem. But it didn’t last longer than a few hours before a group of five senators wrote a joint letter to Zuckerberg with an unequivocal demand to “immediately discontinue” the project. In a casuistic response, the Diem Association tried to distance itself from Facebook.

On Dec. 1, Marcus, the formal head of Novi and the face of the Meta/Diem project, announced his resignation. Marcus, who had been working at Facebook since 2014, didn’t go into detail on the reasons for his decision, joining the list of Facebook’s key crypto figures who left in 2021, including fellow Diem co-founders Morgan Beller and Kevin Weil. With Marcus’ departure, it was hard to expect anything good in the upcoming 2022.

Is this the end for Diem?

Speaking to Cointelegraph immediately after the news of Facebook parting with Diem, Buckley, who had foreseen the regulatory reaction to the project back in 2019, shared his conviction that this is indeed the end of the stablecoin initiative: “I would be really surprised if it survives. It is a project designed to benefit from Facebook’s scale and reach and is now quite a scarred product.”

Buckley believes the company “profoundly mishandled the entire announcement” back in the day, overplaying its card as one of the biggest tech companies in the world. It surely wasn’t well-received by the wide range of regulators across the globe, as a digital currency with a user base of 2 billion was obviously far beyond the scope of a social media business:

Facebook took the classic tech company approach to this of surging ahead and then seeking forgiveness rather than seeking permission upfront. This may well work with telecoms […] but financial regulators expect to be treated with respect, as do governments with respect to their monetary sovereignty. The sharp resistance was in part because financial regulators and governments first learned of this from the media, not directly and well in advance, from Facebook.

Apart from Zuckerberg’s bravado that possibly played its role in Libra/Diem’s ultimate demise, this case could be seen as a hint to something more alarming. Facebook’s project of the world’s first global digital currency with an immediate mass adoption boost provoked instantaneous and concerted resistance from regulators.

What that means is that we can probably expect a response no less stiff and immediate should any other digital currency rise up to Diem’s adoption potential. As Buckley puts it, “The ability to mint the currency of the realm is a core element of sovereign capacity and has been for centuries.” And there’s no reason to believe that it won’t be defended ferociously. Hopefully, Diem’s example will serve as a reminder that the importance of regulatory negotiations should not be underestimated.


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Early birds: U.S. legislators invested in crypto and their digital asset politics

According to some estimates, as many as 20% of Americans were invested in cryptocurrencies as of August 2021. While the exact number can vary significantly from one poll to another, it is clear that cryptocurrencies are no longer just a niche passion project for tech enthusiasts or a tool for financial speculation. Rather, digital assets have become a widespread investment vehicle with the prospect of becoming mainstream. 

Optimistic as that is, this level of mass adoption still does not enjoy a commensurate political representation, with senior United States politicians largely lagging behind the curve of crypto adoption. This makes the very narrow group of congresspeople who are also hodlers particularly interesting. As a lawmaker, does owning crypto, or at least having some crypto exposure, mean that you also vocally support the digital asset industry?

According to “Bitcoin Politicians” — a crowdsourced data project aimed at tracking U.S. political figures’ crypto holdings using public financial disclosures — there are currently seven known crypto investors across both chambers of Congress. Here’s a closer look at the way their personal financial strategies are reflected, if at all, in their public political stances.

Michael McCaul

Michael McCaul, a 59-year-old Republican representative from Texas, holds the position of ranking member of the House Foreign Affairs Committee. He was also the fifth-wealthiest member of Congress in 2018. McCaul is known for his hawkish foreign affairs positions — vocally opposing the U.S. withdrawal from the Yemeni Civil War and supporting President Joe Biden’s airstrikes on Iranian-backed targets in Syria.

In 2016, McCaul co-sponsored a bipartisan bill proposing a commission to study the debate over the use of encryption, including its potential economic effects. In recent years, the Texas lawmaker hasn’t been seen making any public crypto-related statements.

Barry Moore

A newcomer to the House of Representatives, Barry Moore is a staunch Republican from Alabama. In January 2021, he objected to the certification of the results of the presidential election and even got his Twitter account temporarily suspended for posts that echoed the claims of a “stolen election.”

According to a public disclosure, Moore purchased between $1,000 and $15,000 worth of Dogecoin (DOGE) in June 2021 — an investment whose value has since dropped nearly 50%. The legislator also invested in Ether (ETH) (up to $15,000) and Cardano’s ADA (up to $45,000). Still, Moore hasn’t publicly expressed his opinions toward crypto.

Marie Newman

57-year-old Marie Newman, another new addition to the House of Representatives, is a Democrat from Illinois who is aligned with the progressive wing of the party. She is a proponent of abortion rights, gun control, a $15 minimum wage and the Green New Deal.

Newman holds Coinbase shares as of December 2021, having purchased between $30,000 and $100,000 worth. She also registered the acquisition of more than $15,000 in Grayscale Bitcoin Trust shares. Newman hasn’t made any public statements about the crypto-related assets, but she is a member of the Congressional Blockchain Caucus, a bipartisan group working to promote a more relaxed regulatory approach to crypto that would allow the technology to flourish.

Jefferson Van Drew

A retired dentist with almost three decades of experience as a New Jersey legislator, Van Drew was elected to the House in 2018 as a Democrat but changed his colors in 2020, becoming a Republican. This comes as no surprise, as Van Drew was one of just two members of the Democratic party to vote against former President Donald Trump’s impeachment inquiry in December 2019. Still, he voted in line with Democrats 89.7% of the time during his tenure in the party.

In a 2020 disclosure, Van Drew accounted for up to $250,000 in an investment trust operated by Grayscale, one of the larger digital-asset management firms on the market. At the time, the representative’s office declined to give the press any details about the exact nature of the investment, and Van Drew himself has remained silent with regard to digital asset-related policy issues.

Michael Waltz

Yet another recent House electee, Michael Waltz — a retired army colonel and former Pentagon adviser — is the first ever Green Beret to serve in Congress. A Republican from Florida, Waltz maintains a warrior ethos with a pinch of Florida spice, having called for a full U.S. boycott of the 2022 Winter Olympics over the Chinese Communist Party’s treatment of the nation’s Uyghur population. Waltz also voted against President Biden’s $1.9-trillion economic stimulus bill and opposed the establishment of a commission to investigate the Jan. 6, 2021 attack on the U.S. Capitol.

According to disclosures, Waltz bought up to $100,000 in Bitcoin (BTC) in June 2021, which makes him one of the few lawmakers to publicly own the original cryptocurrency, specifically. Nevertheless, on social media, the representative prefers to speak on foreign policy issues, and when he was asked about his crypto investment, he compared Bitcoin to gold in terms of serving as an inflation hedge. Waltz is also a member of the Congressional Blockchain Caucus.

Cynthia Lummis

In the case of Cynthia Lummis, a Republican senator representing Wyoming, her fame as a major crypto proponent probably comes before her credentials as a digital asset investor. A hardline Republican, Lummis was at one point the only female member of the conservative Freedom Caucus.

In her January 2021 disclosure, Lummis — a member of the Senate Banking, Housing and Urban Affairs Committee — registered the purchase of between $50,000 and $100,000 in Bitcoin. The Senator revealed that her overall holdings amounted to some 5 BTC.

Lummis certainly puts her mouth where her money is. For one, she famously compared the U.S. to Venezuela in terms of inflation, and she has stated she wants to launch a financial innovation caucus that would aim to “educate members of the U.S. Senate and their staffs about Bitcoin, its advantages, and why it is just such a fabulous asset to dovetail with the U.S. dollar.”

Around Christmas 2021, Lummis revealed she was drafting a comprehensive bill that she plans to introduce sometime in 2022. In a tweet, Lummis asked voters to contact their senators to support the bill, stating that she was seeking bipartisan cosponsors.

Pat Toomey

Republican Senator Pat Toomey of Pennsylvania can be called the arch enemy of government spending (with a peculiar exception for charter school funding), having once proposed a budget plan with a $2.2 trillion tax cut. He also happens to be a strong supporter of banking deregulation.

During the past year, Toomey emerged as one of the main public supporters of crypto in Washington. He criticized Senator Sherrod Brown’s plan to give up crypto regulation to executive agencies and urged Treasury Secretary Janet Yellen to clarify the language in the infrastructure bill around the tax reporting requirements for crypto. In December 2021, Toomey came up with his own set of regulatory principles, released ahead of a congressional hearing on stablecoins. In June 2021, he bought between $2,000 and $30,000 in shares of Grayscale’s Bitcoin and Ethereum trusts.

Will the trend continue in 2022?

The list of publicly crypto-friendly lawmakers grew significantly last year, and although not every hodler on the Hill dared to reinforce their investment with symmetric political statements, it is an important trend for the industry. As Chris Kline, co-founder and chief operating officer of cryptocurrency retirement investment provider Bitcoin IRA, told Cointelegraph:

As more representatives invest in cryptocurrencies, I think lawmakers will begin to understand digital assets on a deeper level, leading to a more informed and detailed crypto policy that will benefit investors on every level.

Eric Bleeker, analyst and general manager at investment firm The Motley Fool, also stressed the importance of the knowledge-enhancement side of lawmakers’ crypto exposure:

You definitely have to view those investments as beneficial for the industry. Did Visa receive worse legislation after Nancy Pelosi invested in its IPO? At the end of the day, crypto can be seen as a ‘threat’ by governments — we’ve already seen it outlawed in China. Having legislators own it adds to knowledge of the industry.

Kline also believes that the growing number of politicians invested in crypto will inevitably convert to active support, both verbal and legislative. With new concepts like the Metaverse, nonfungible tokens (NFTs) and digital banking steadily conquering the attention of society, there is no reason for society’s representatives to not follow these trends.

In Kline’s opinion, this will require legislators’ understanding of the deep complexities and nuances of cryptocurrencies and blockchain: “I see 2022 as the year legislators consider the potential of digital assets and another step in their widespread adoption.”

Bleeker expects more U.S. legislators to get into the crypto game in 2022 for a simple reason: “Right now, they’re tremendously underinvested.” Bleeker noted that as of 2018, the median net worth of congresspeople was $1 million, with 10 senators having a net worth of over $30 million. It’s true that some legislators may avoid crypto for political reasons, but just by looking at the numbers, more crypto ownership from lawmakers can be expected from a pure portfolio diversification standpoint.

The hope is that more investment in crypto by lawmakers will come with better understanding of this asset class and more political support.


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Fed Chair Promises CBDC Report “Within Weeks”

Key Takeaways

  • Jerome Powell stated in his renomination hearing today that the Federal Reserve’s CBDC report was forthcoming within weeks.
  • Powell faced skepticism toward stablecoins and cryptocurrencies from a number of senators.
  • The report, according to Powell, focuses less on taking strong positions and more on asking the right questions.

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In Federal Reserve Chair Jerome Powell’s renomination hearing before the Senate Banking Committee Hearing today, Powell said that a Fed report on central bank digital currencies was expected in the “coming weeks.”

A Long-Awaited Report

Federal Reserve Chairman Jerome Powell testified at his renomination hearing before the Senate Banking committee today that the central bank’s highly-anticipated report on CBDCs and stablecoins was soon forthcoming.

Powell, whom President Joe Biden recently renominated to head the U.S. central bank for another four-year term, assured Senator Mike Crapo (R-I) at the Senator’s pressing that the long-awaited report on central bank digital currencies would be published “within weeks.” 

Senator Crapo pushed Powell as to why the Fed had not released its report on central bank digital currencies as it said it would, citing delays in the Fed’s publication. Powell responded by saying that the “report really is ready to go, and I would expect we will drop it—I hate to say it again—in the coming weeks…”

Moreover, the Fed Chair gave some details as to what Congress and the public might expect from the coming report, explaining that it was more an “exercise in asking questions and seeking input from the public rather than taking a lot of positions on various issues.” Nevertheless, Powell testified, that the Fed does “take some positions.”

While the nomination hearing was predominantly concerned with broader issues in the economy, such as inflation and interest rates, cryptocurrency remained a theme. In his opening statement, Senator Sherrod Brown (D-OH) warned of the dangers of cryptocurrencies to the U.S. economy. Senator Brown said that the Fed needs to “take seriously the systemic risks that threaten our economic progress like cryptocurrencies and stablecoins.”

This was not the first time Senator Brown expressed his trepidation towards cryptocurrencies and stablecoins. Last month, in a Senate Banking Committee Hearing dedicated to stablecoin discussion, he called cryptocurrency a “new fantasy economy” and warned that stablecoins made it easier for people to risk their money on volatile and possibly fraudulent crypto assets. 

The Fed’s report on a central bank digital currency has been long awaited. In February last year, Jerome Powell called a U.S. digital dollar a “high priority.” 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies. 

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US lawmaker hints at upcoming crypto legislation as Jerome Powell says Fed will release report on digital currency soon

At his confirmation hearing in front of members of the Senate Banking Committee, Federal Reserve chair Jerome Powell said the agency would be releasing its report on cryptocurrencies “within weeks.”

Addressing Idaho Senator Mike Crapo remotely from the Dirksen Senate Office Building on Tuesday, Powell said the Fed’s report on digital currencies wasn’t “quite where we needed to get it” but would be released soon regardless. The Fed chair cited “changes in monetary policy” as part of the reason for the delayed report, which is expected to address policy surrounding the possible rollout of a central bank digital currency in the United States.

“It’s more going to be an exercise in asking questions and seeking input from the public rather than taking a lot of positions on various issues, although we do take some positions,” said Powell. “The report really is ready to go and I would expect we will drop it — I hate to say it again — in coming weeks.”

Powell’s testimony comes the same day Minnesota Representative Tom Emmer hinted on Twitter that he would be unveiling new legislation related to digital currency, without providing specifics. It’s unclear if the upcoming bill would be aimed at “fixing” the definition of a broker in the infrastructure law which took effect November 2021, or another regulatory path to encourage innovation in the crypto industry.

During his time as Fed chair, Powell has suggested there was no rush in the U.S. releasing a digital dollar despite other countries including China moving ahead with CBDCs. In December, he spoke in favor of stablecoins, saying they could be a “useful, efficient consumer-serving part of the financial system if they’re properly regulated.”

Should he receive more than 50 votes once his nomination goes to the full Senate, Powell would be re-confirmed as the Fed chair for another four years. Lael Brainard will also be addressing U.S. lawmakers in a Thursday hearing regarding her confirmation as the Fed vice chair, replacing Richard Clarida.

Related: US is not moving fast enough to develop a CBDC, says former CFTC chair

At least three seats at the Federal Reserve’s board of governors will be open to nominations from U.S. President Joe Biden in 2022 following the departure of Clarida, who yesterday announced he intended to resign on Jan. 14 ahead of his term expiring. Biden is reportedly considering Duke University law professor Sarah Bloom Raskin to join the group of seven governors, in addition to economists Lisa Cook and Philip Jefferson.

Cointelegraph reached out to Tom Emmer’s office, but did not receive a response at the time of publication.