The spotlight has been shifted to the United States and its regulators this week. The cryptocurrency-related provisions of the infrastructure bill, a tiny grain of sand in the grand scheme of the omnibus legislation, had all laser eyes glued to the fateful House of Representatives vote — which never happened. However, there is a feeling that the bill will be passed sooner than expected.
Federal Reserve Chair Jerome Powell, who testified before Congress, said that while a blanket ban like the one in China on cryptocurrency is not an option for the Fed, it prefers tighter regulation of stablecoins. This narrative has been in the air for some while and it seems that President Joe Biden’s administration has decided how to rein in stablecoins.
Here is the succinct version of this newsletter. Register below to receive the complete newsletter.
Bill on infrastructure is stuck
The Infrastructure Investment and Jobs Act (2021) is being delayed by politics. It includes a massive spending package and tax-gap closing measures. Crypto-relevant provisions are also included in this category.
The legislation is not supported by progressives unless moderates agree to sufficient funding for social programs. President Biden will push the initiative to the end and put all the pressure on them. He risks ending his first year as president without having a sufficient number of legislative victories.
It is possible to expect the vote any time now. If Democrats can agree internally, Republicans won’t be able to get in the way.
Kraken’s wrist is rubbed by the CFTC
Kraken’s $1.25 million penalty from the Commodity Futures Trading Commission for offering margined retail commodities transactions without proper registration felt like a friendly finger wag. Then, Commissioner Dawn Stump echoed this sentiment and issued a concurring statement in which she acknowledged that the CFTC guidance does not provide sufficient clarity for firms that facilitate digital commodity trading.
Central bank currencies loom large
Nigeria’s Federal High Court has approved the initiative and Nigeria is on track to roll-out its digital currency, eNaira. Global financial institutions such as the Bank for International Settlements continue to work on the design and operational principles for digital currencies of central banks around the globe. One BIS report focuses on interoperability issues between future digitized and traditional monetary systems.