Sept. 27Oct. 3: Law Decoded: Infrastructure Difficulties and Beneficent Penalties

The Biden administration and the Federal Reserve are looking into stablecoin regulation while House Democrats fight over the infrastructure plan. This week, politicians and regulators in the United States have once again taken center stage. The infrastructure bill’s cryptocurrency-related provisions, a speck in the omnibus legislation’s sandbox, had all eyes on the critical House of Representatives vote which never happened. However, it appears that the bill will be signed into law sooner rather than later.

We also learned from Federal Reserve Chair Jerome Powell’s testimony to Congress that the Fed does not see the need for a broad ban on cryptocurrencies in China, preferring instead to focus on tighter regulation of stablecoins. The latter story has been floating around for a while, and it now looks that President Joe Biden and his administration have made up their minds about how to deal with stable coins.

The bill on infrastructure has come to a halt.

The politics surrounding the Infrastructure Investment and Jobs Act of 2021, which includes crypto-relevant elements, is delaying the vote on this enormous package of spending and tax-gap-closing measures. Progressives will not support the measure unless the moderates promise adequate financing for social programs in the concurrent budget reconciliation package, but President Biden will do everything he can to push the bill through. Otherwise, he risks ending his first year in office with an insufficient legislative track record. The vote is due any day now, and if Democrats can reach an agreement within, Republicans will be unable to stop it.

The CFTC slaps Kraken on the wrist.

The $1.25 million penalties imposed by the Commodity Futures Trading Commission on Kraken for offering margined retail commodity trades without appropriate registration had already seemed like a friendly wag. Then, in a concurring statement, Commissioner Dawn Stump added to this feeling by admitting that the present CFTC guideline falls short of providing clarity to businesses that enable digital asset retail commodities trading.

The importance of central bank currencies cannot be overstated.

Nigeria is on pace to launch its digital currency, the eNaira, any day now, following approval by the country’s Federal High Court. Meanwhile, international financial organizations such as the Bank for International Settlements continue to work on the design and common operational principles for central bank digital currencies throughout the world. For example, a BIS paper focuses on interoperability concerns between future digital monetary systems and their conventional equivalents.