Crypto midterms cheat sheet
With help from Derek Robertson
Tomorrow is a big day for America, but what does it mean for crypto?
But changes in control come with friction that could delay bipartisan efforts to regulate crypto at a time when the industry says it wants more clarity sooner.
As our colleagues at Morning Money , Scott is “a blank slate on crypto policy,” so his ascension would be a wild card. The industry is determined not to let the technology become a partisan issue, but a wave election could wipe out some House Dems, like Josh Gottheimer of New Jersey, who have engaged on crypto regulation and now face competitive races.
With help from Derek Robertson
Tomorrow is a big day for America, but what does it mean for crypto ?
Overall, the composition of the next Congress is expected to be younger and more Republican, two trends that favor a more crypto -friendly environment on Capitol Hill.But changes in control come with friction that could delay bipartisan efforts to regulate crypto at a time when the industry says it wants more clarity sooner.
So, here’s what to look for on Tuesday, and what to expect after that.
If Republicans take the upper chamber, Sen. Sherrod Brown of Ohio, one of the most outspoken crypto skeptics in Congress, will lose the chairmanship of the Banking Committee, with Tim Scott of South Carolina likely to replace him.As our colleagues at Morning Money , Scott is “a blank slate on crypto policy ,” so his ascension would be a wild card.
Meanwhile, Tuesday is expected to bring some young, new pro- crypto Republican faces to the Senate.
In Ohio, J.D. Vance is favored to win the state’s open seat, while Blake Masters remains the underdog in Arizona.While the two Peter Thiel acolytes have gotten the most attention, their fellow millennial Katie Britt, who is expected to win the Alabama Senate race, has also .In North Carolina, Rep. Ted Budd is expected to win his Senate bid. His efforts in the House, like a bid to that would have granted Treasury new powers over crypto , have from the industry. (And at 51, he, too, counts as young by the current standards of the Senate.)If, , Republicans win back the House, Patrick McHenry of Virginia is in line to take up the chairmanship of the Financial Service Committee, a prospect that has Wall Street rankled and the crypto industry salivating on account of his partiality to tech-driven upstarts. (For Pro subscribers, POLITICO’s Sam Sutton has written more on this dynamic ).As recently as last month, McHenry has expressed his exasperation with the SEC’s regulation-by-enforcement approach to crypto , an , raising the prospect that he will haul agency chairman Gary Gensler before the committee to answer for it.When it comes to crypto and Republicans, though, there might be such a thing as too much winning. The industry is determined not to let the technology become a partisan issue, but a wave election could wipe out some House Dems, like Josh Gottheimer of New Jersey, who have engaged on crypto regulation and now face competitive races .In the most important state for financial regulation, pro- crypto Republican Lee Zeldin has a chance at upsetting the incumbent Democrat Kathy Hochul, who has not taken a firm stand for or against the industry.The state legislature passed a moratorium on crypto mining in June, but it has remained on Hochul’s desk, with its final fate unclear. At a , Hochul would not say whether she intends to sign it, while Zeldin said he would not sign a moratorium.But here, too, a Republican win would carry some risks for the industry. Perianne Boring, founder of the Digital Chamber of Commerce, a trade group, said the industry views Adrienne Harris, the current superintendent of the state’s Department of Financial Services, as deeply knowledgeable on crypto . She said a Zeldin win carries the risk he could install a new regulator who was less-versed in the ins and outs of the technology.
In case you missed it: Just before the weekend, the Federal Reserve Bank of New York released its experiment with creating a central bank digital currency.New York’s Fed is one of the regional Federal Reserve banks experimenting with a state-backed crypto currency, like the on Project Hamilton. New York’s Project Cedar developed its own prototype CBDC and tinkered with it over the course of 12 weeks, finding that blockchain technology enabled:
• Something called “atomic settlement,” where payments are validated at the same time for both parties, reducing risk
• Greater interoperability across different types of banks (i.e. private and public)In a statement, the the program “is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed” — but as a rare, unambiguous “use case” for blockchain technology , it’s not hard to imagine its advocates pressing for such a thing. — Derek Robertson
Early in this newsletter’s life I wrote about the concept of “ ,” looking at the question of what kind of policing a more lifelike virtual world might require, and who would do it.At least one law enforcement agency is taking that idea quite literally: Interpol, which its own “metaverse.” In a set to a breathless simulacrum of a Hans Zimmer score, the agency shows off its virtual model of Interpol headquarters as well as touting VR training programs aimed at “supporting our member countries to fight crime and making the world, virtual or not, safer for those who inhabit it,” as its Secretary General Jürgen Stock said in a statement.The project might at first seem like another far-fetched example of the kind of metaverse hype-chasing that’s led companies as disparate as and the to stand up their own metaverse efforts. But there’s a much cleaner “in” for Interpol when it comes to virtual reality: As they point out, the World Economic Forum has the potential for VR-specific versions of crimes like phishing and hacking. — Derek Robertson
• The creators of Stable Diffusion are now to biotech.
• Meta’s metaverse push is a to this week’s reportedly planned layoffs.
• Read about one German activist’s quest to from Clearview AI.
• How is the U.S. policing the world for projects?