More on Self-Hosted Wallets?, Digital Dollar Talk, and Events to Watch this Week
HODLpac Newsletter - March 2021, Part 1
Let’s jump in to what you need to know about crypto-related politics and policy.
But first, if you don’t already, please follow us on Twitter: https://twitter.com/HODLpac
And join our Discord: https://discord.com/invite/fDxHZxJ
Now, here is what you need to know…
Round Two of the Self-Hosted Wallet Fight?
Yes, that’s right: there is a chance we will be revisiting this issue sometime later in 2021.
As a reader of this newsletter and an engaged crypto-citizen, you’re aware of the self-hosted wallet drama that dominated the conversation at the end of 2020.
Nonetheless, a quick refresher: as the clock was ticking at the end of the Trump administration, former Secretary of the Treasury Steven Mnuchin tried to pull off a “midnight ruling” that would’ve required cryptocurrency financial institutions to identify the name and physical address of recipients of transactions above $3,000 — which is much more onerous than the similar requirement for $10,000+ cash-based transactions. This would severely impact the use of so-called self-hosted wallets — like MetaMask and others — that many people use to interact with the crypto ecosystem.
As documented in this newsletter, the crypto community rallied together to oppose the proposed rule, setting records for public comments submitted to the Treasury Department.
This week, the Financial Action Task Force — a G-7 initiative to coordinate policy to combat money laundering — announced that it plans to release an update on its guidance related to virtual assets.
New Treasury Secretary Janet Yellen said in a statement, “We welcome the FATF’s actions to enhance operational efforts designed to identify terrorist financiers and develop additional guidance in consultation with the private sector on virtual assets and proliferation finance, two key priorities of the United States.”
We don’t yet know how this will all shake out but it is worth noting that there could be more for the crypto community to do to fight discriminatory regulation aimed at our industry.
Digital Dollar Talk
Both Secretary Yellen and Federal Reserve Chairman Jay Powell made headlines last week with comments about the much-discussed “digital dollar.”
At a conference hosted by the New York Times, Yellen said the following about its potential:
“It makes sense for central banks to be looking at it. We do have a problem with financial inclusion. Too many Americans really don’t have access to easy payment systems and to banking accounts, and I think this is something that a digital dollar — a central bank digital currency — could help with. I think it could result in faster, safer and cheaper payments.”
Just a couple days later, Chair Powell said this while asked about the prospects of a digitl dollar during his testimony on Capitol Hill:
“This is going to be an important year. This is going to be the year that we engage with the public pretty actively including some public events that we are working on, which I’m not going to announce today.”
For deeper dives into these comments, check out these sources:
“The digital dollar is now high priority for the Fed,” Dion Rabouin, Axios
“Digital Dollar Redux: How Janet Yellen And Jay Powell Could Sync On CBDC,” Jason Brett, Forbes
The bigger picture for the crypto community is how plans for a future government/central bank-issued digital dollar will interact with the fast-growing private market for cryptodollars (aka stablecoins), as well as other cryptocurrencies like Bitcoin.
Moreover, what will a digital dollar mean for financial privacy?
“Without privacy, do we really want a digital dollar?” Matthew Green and Peter Van Valkenburgh, Coin Center
For HODLpac, this is definitely something to watch closely as it will be important for us to make our voices heard via our representatives in Congress and elsewhere. As Senator Lummis recently tweeted, competing on the financial innovation front is in the United States’ geopolitical interests:
But we have to make sure we get it right… and the crypto community is well-equipped to help our policymakers do so.
Events this Week
There are several awesome events to check out this week if you’re interested in crypto policy and politics.
Clubhouse: Crypto Policy with Senator Cynthia Lummis
National Briefing of Women of Color in Blockchain
On March 3rd and 4th, the National Policy Network of Women of Color in Blockchain is hosting several members of Congress and leaders in the industry to talk about crypto innovation, small business, and racial and gender equity.
Harvard Law School’s 3rd Annual Conference on “Blockchain, Fintech, and the Law”
Also on March 4th, this conference has brought together an impressive group of leading academics, industry professionals, regulators, and lawyers from around the world to talk about topics like: crypto bank charters, DeFi, institutional investment, Bitcoin as an agent of social change, and more.
“Atomic Trading,” SEC Commissioner Hester Peirce’s remarks at George Washington University Law School
“Can Governments Stop Bitcoin?,” Alex Gladstein, Quillette
“Why DeFi is the Future,” Mark Cuban on the Bankless Podcast
“NFTs and a Thousand True Fans,” Chris Dixon, a16z Blog
Did we miss anything?