Seeds of Wisdom RV and Economic Updates Thursday Afternoon 3-13-25

14/03/2025

Good Afternoon,

SENATE BANKING COMMITTEE VOTES TO ADVANCE STABLECOIN BILL, COLLECTING SUPPORT FROM BOTH DEMOCRATS AND REPUBLICANS

▪️The bill would establish a regulatory framework for stablecoins and create standards for when stablecoin issuers would be regulated by the state or the federal government.

▪️Some Democrats, including Sen. Elizabeth Warren, have expressed unease toward the bill.

The Senate Banking Committee voted to advance a monumental stablecoin bill, advancing it to the full Senate and gaining support from Democrats along the way.

Introduced in February by Sen. Bill Hagerty, R-Tenn., the “GENIUS Act” (Guiding and Establishing National Innovation for US Stablecoins) aims to create a regulatory framework for stablecoins, defining when issuers fall under state or federal oversight. It has bipartisan support from Democratic Sens. Angela Alsobrooks of Maryland and Kirsten Gillibrand of New York.

. Democrats Sens. Mark Warner and Andy Kim were among others to support the bill

“The GENIUS Act is a bipartisan step forward in ensuring stablecoins are safe and reliable tools in the financial system,” said Senate Banking Committee Chair Tim Scott, R-S.C., at the beginning of Thursday’s markup.

A handful of lawmakers in Washington have worked on a bill to regulate stablecoins for years, but those efforts, like other crypto-related bills to regulate the industry, have not come to fruition.

Now, almost two months into Donald Trump’s presidency, Congress is seemingly prioritizing crypto, including investigating claims of industry-wide debanking and repealing the controversial “DeFi Broker rule.”

Work is also underway in the House to regulate stablecoins. Though the GENIUS Act is not a companion to the House’s version, lawmakers say it shows an effort among Republicans to work on key issues.

The GENIUS Act has garnered support from some in the crypto industry, including the Blockchain Association which called the bill “a thoughtful step forward for commonsense, response guardrails for stablecoin innovation,” in a post on X on Wednesday.

On the other side of the aisle, some Democrats have expressed unease toward the GENIUS Act. Sen. Elizabeth Warren’s staff circulated a memo outlining their opposition to the bill, which they say “fails” to protect consumers, competition and national security, according to Politico. The memo also includes arguments that the bill would allow firms, such as big tech companies, to issue their own currencies, Fortune reported.

Warren offered several amendments on Thursday, including one involving firms being able to issue their own stablecoins. Big tech billionaires like Elon Musk could use their own currencies to compete with the U.S. dollar, Warren said.

“My most pressing concern is Elon Musk’s attempt to build an empire that rivals the power of most nation states,” Warren later added.

In the past, some Democrats have been critical of companies’ previous plans to launch a stablecoin. Meta Platforms, formerly Facebook, looked to launch stablecoin Libra, later renamed Diem, a few years ago, but quickly prompted concern among regulators and lawmakers who were hesitant about a stablecoin with ties to the social media company.

The committee voted 13-11, therefore not agreeing to Warren’s amendment.

Tensions flare

Sen. Catherine Cortez Masto raised concerns over Democrats showing up to the markup and holding a quorum for the committee but not Republicans.

“We’re taking the time to talk about our amendments, but there’s no debate,” the Nevada Democrat said. “And there’s some very good amendments here by the way, and I’m hopeful that we have a good product coming out of here, but it is the Democrats now holding the quorum here instead of the Republicans.“

Cortez Masto called the bill a “great start” but said it was not ready for prime time.

“There are many that want to provide a good product at the end of the day, but it looks like to me — the die is already cast, you get what you get,” she said.

Sen. Warren called the markup a “show trial” and criticized the lack of debate. However, Warren also showed willingness to work on the bill and said it had a “strong base.”

“This feels like show trial here that we get up and we read our little part about each of the amendments and the Republicans, clearly a majority of the Republicans have already decided their vote without even hearing anyone make an argument for why this might be an amendment that would be appropriate for this bill,” Warren said.

Sen. Bill Hagerty, one of the authors of the bill, countered and said the bill had gone through a “very robust bipartisan process.”

“We’re going to continue to work to improve this,” he said. “I’ve already acknowledged my willingness to do that here today to the extent that there are additional technical corrections, or in many cases, valid issues are being raised that I think are far more appropriate for a market structure piece of legislation.”

In the House, Rep. Stephen Lynch, D-Mass., criticized the GENIUS Act on Tuesday during a hearing focused on stablecoins and said it needed to be amended “vigorously.”

“I read the GENIUS Act over in the Senate — I’m a little weary about anything called genius coming out of the United States Senate — but there were so many problems with that and I’m hopeful, hopefully my colleagues, Mr. Hill, and others will amend that vigorously because it had huge, huge problems,” Lynch said

@ Newshounds News™

Source: The Block

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TREASURY MET WITH THREE CRYPTO FIRMS TO DECIDE CUSTODY OF BITCOIN RESERVE

Firms including Anchorage Digital are advising the U.S. government on best practices for safeguarding billions of dollars worth of crypto assets.

The U.S. Treasury Department held meetings this week with top executives from three crypto custody firms to discuss safeguarding the country’s Strategic Bitcoin Reserve, sources familiar with the matter told Decrypt.

Anchorage Digital was one such custodian that met with Treasury Department officials on Monday, according to multiple sources with direct knowledge of the matter.

When asked about the meeting, Anchorage CEO Nathan McCauley told Decrypt that government officials asked him detailed questions about best practices for custodying a national Bitcoin reserve and digital asset stockpile. McCauley said the officials also inquired about how custody could impact stablecoins and market structure, two hot-button topics currently before Congress.

“The Treasury Department is asking all the right questions,” the Anchorage CEO told Decrypt. “It’s clear that Treasury officials are treating this move into the digital asset space with care, recognizing that the United States is quite literally writing history.”

The Treasury Department did not respond to a request for comment on this story.
A Capitol Hill source with knowledge of the meetings told Decrypt the Treasury Department is in the early stages of figuring out how best to tackle questions of security involved in the U.S. government indefinitely holding billions of dollars worth of digital assets.

“I don’t think they have a view yet, and they’re trying to figure out what their view is going to be,” they said. “But they are actively seeking additional information from industry participants on the best way to custody the strategic reserve and the stockpile.”

The source elaborated that key decision makers in the industry appear to be in favor of one or multiple third parties assisting with custodying the U.S. government’s Bitcoin reserve in the interim, with the long-term goal of the government eventually self-custodying when ready.

Self custody refers to the practice of independently holding crypto in cold wallets accessed with private keys, as opposed to relying on third parties to manage the assets.

The national digital assets stockpile, however, will consist of a wide variety of seized crypto assets on various blockchain networks, and therefore will likely be permanently custodied by a third party.

How are the nearly 200,000 BTC in the government’s possession currently being held? Last summer, the U.S. Marshals Service announced it had tapped Coinbase to custody its large cap digital asset holdings.

When asked by Decrypt whether the company currently custodies the U.S. government’s Bitcoin, however, a Coinbase representative declined comment, pointing only to a recent, vague X post on the subject by Coinbase CEO Brian Armstrong.

In the post, Armstrong boasts that his company “works with 145 government entities in the U.S. and 29 government entities outside the U.S.” and that Coinbase has seen increased interest in its custody services following President Donald Trump’s announcement establishing a Bitcoin Reserve.

During an event in Washington held Tuesday by the Bitcoin Policy Institute, BitGo CEO Mike Belshe, Casa CEO Nick Neuman, and Anchorage Digital’s Nathan McCauley convened a panel on “Safeguarding America’s Bitcoin.”

During the talk, the executives opined as to the current state of the government’s current BTC stash, which is worth some $16.4 billion at writing.

“It’s maybe sitting in a closet at the U.S. Marshals Office,” Casa’s Neuman said.

“Or in a drive at somebody’s desk,” BitGo’s Mike Belshe added.

@ Newshounds News™