Regulation

There is nothing surprising about Senator Cynthia Lummis, a Wyoming Republican known to be among the staunchest crypto supporters in the U.S. legislature, revealing a sizable Bitcoin (BTC) purchase that she had made earlier in the summer. It is still oddly satisfying to observe the alignment between a politician’s long-declared stance on an issue and corresponding monetary behavior (Lummis had been hodling BTC since 2013). Such consistency will be a norm in blockchain-based governance systems where individuals’ interests are aligned with those of the entire community and where all information that could be of remote public interest is transparent.

Below is the concise version of this newsletter. For the full breakdown of policy developments over the last week, register for the full newsletter below.

Debt ceiling staved off

Last week finally saw the resolution, if temporary, of the weeks-long saga around the U.S. federal government’s borrowing cap, and there is now certainty that the Treasury Department will be able to meet its financial obligations until early December at least. This time around, the unimaginable prospect of the nation’s default on its debt seemed a bit less unimaginable than usual, as Senate Republicans took a stand to protest what they see as an irresponsible Democratic spending spree.

While opinions on the short-term effects of the debt ceiling uncertainty on the crypto market differed, there was a near consensus around the notion that in the long run, the political weaponization of federal debt policy will erode trust in the greenback.

Letting the watchdogs out

It has emerged that Coinbase is not the only major crypto industry player that is being harassed by the Securities and Exchange Commission. Circle, the firm behind USD Coin (USDC), has revealed receiving an investigative subpoena from the agency back in July, also stating its willingness to “cooperate fully.”

Over in the enforcement realm, a major announcement came from Deputy Attorney General Lisa Monaco, who has recently been prominent in the DOJ’s efforts to combat ransomware and cyberattacks. Speaking at the Aspen Institute Cyber Summit, Monaco said that the Justice Department launched the National Cryptocurrency Enforcement Team in order to boost the government’s capacity to disrupt financial networks facilitating cybercrime.

100+ CBDCs are coming

Kristalina Georgieva, managing director of the International Monetary Fund, spoke favorably of digital currencies last week. Expectedly, she referenced central bank digital currencies, or CBDCs, which sit tight within the regulatory perimeter. More interestingly, Georgieva shared some previously undisclosed numbers on how many countries are at some stage of exploring or developing CBDCs.