The United States Security and Exchange Commission’s refusal to oppose the launch of the first ever Bitcoin (BTC), exchange-traded funds has been the biggest regulatory story of the week. It took eight years for it to happen. Although the first ETFs track CME-traded Bitcoin futures, rather than the asset’s spot price (which is what the crypto space expects), the next step in the regulatory landscape is a pure-Bitcoin ETF. Although this bar may prove difficult to cross, Gary Gensler, the SEC Chair, seems less convinced about the investor protections these products provide.
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Crypto and national security
Last week, the U.S. Treasury Department stated that digital assets are a growing threat for the nation’s sanction program. These alternative financial rails can be used by adversaries to reduce the impact of U.S.-imposed sanctions in the dollar-denominated world. A high-ranking Treasury official reaffirmed the department’s increased focus on targeting bad actors using crypto infrastructure just a few days later. A high-ranking Treasury official made clear that the department is aware that most crypto transactions are legitimate.
A group of Senate Democrats became extremely nervous after Facebook launched a limited pilot of Novi, its digital wallet. The pilot was in partnership with Coinbase, Paxos, and Coinbase. A small number of users were able to send and receive Pax Dollars (USDP), which is a stablecoin that’s dollar-backed, during the test.
Five senators, including Elizabeth Warren, a vocal crypto critic, and Sherrod Brown, Chairman of the Banking Committee, wrote a condemnation letter to Facebook’s “revived attempt to launch a digital wallet” and cited numerous scandals surrounding it as reasons why it could not be trusted to launch private money.
Thunder from below
The crypto community was captivated by big news from Australia. An Australian Senate committee, charged with devising measures that would make Australia a top technology and financial centre, released a comprehensive report on the state of crypto regulation and its prospects. This report was welcomed by the industry and could help Australia join the ranks among the most crypto-friendly countries.