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| How policy and regulation impact the crypto world – and the other way around By Nikhilesh De Managing Editor, Global Policy & Regulation June 29, 2021 Sponsored by If you were forwarded this newsletter and would like to receive it, sign up here.
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Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De. You’re probably here because you signed up, but in case you're not a fan, you can unsubscribe here.
The National Republican Campaign Committee (NRCC) is the first major Congressional campaign group to accept cryptocurrencies in the U.S. Its chair, Rep. Tom Emmer (R-Minn.) says this move comes at donors’ request.
—Nik
Political donations Rep. Tom Emmer (R-Minn.) said the NRCC will accept crypto donations after donors requested the campaign arm do so. (Patrick McDermott/NHLI via Getty Images) The narrative The NRCC is among the first major political groups in the U.S. to accept cryptocurrency donations, which could signal further acceptance of virtual assets as a value transfer tool. What’s more interesting is that while this adoption is being spearheaded by crypto champion Tom Emmer, a congressman from Minnesota and the NRCC’s chair. He says it’s coming from donor interest. Why it matters Cryptocurrency adoption in the U.S. will be driven partly by how crypto is used–and partly by how it’s perceived. U.S. lawmakers accepting crypto for donations may have an impact on both these aspects. Lawmakers receiving crypto will become more comfortable with it, which could lead to more awareness and maybe even positive sentiment toward crypto usage during Congressional hearings. Breaking it down The National Republican Congressional Committee will accept crypto donations in the near future, after having announced the move earlier this month. BitPay, a payment processor four months removed from settling sanctions violation charges, will convert cryptocurrencies into fiat before sending the donations to the campaign wing.
“This is something that I was interested in doing here at the NRCC last cycle, but really what’s happened is I started to get donors saying ‘I would contribute crypto if you take crypto,’” Emmer said of the move. Emmer’s own campaign has accepted crypto since August 2020, after working with BitPay last year.
“We've been talking about this ever since I've had this job and my campaign started accepting cryptocurrency,” Emmer said. “In fact I think Jared Polis (D-Co.) might have been the first member of Congress to accept cryptocurrencies for his campaign and I'm not sure why others didn't follow suit.”
Dotting the I’s and crossing the T’s took less than a month after the final decision was made, he said.
The Federal Election Commission (FEC) has allowed political campaigns to accept crypto since 2014. Emmer said the NRCC’s team has worked with the election watchdog to ensure NRCC donations are aboveboard.
“My understanding is that our lawyers cleared this with the FEC with ethics, that’s all been addressed. My office, we did [speak to the FEC] for my personal campaign,” he said.
Still, it’s unclear when the NRCC will actually begin accepting crypto. A spokesperson for BitPay said the committee was still being integrated.
When the feature goes live, donors can donate bitcoin, bitcoin cash, ether, XRP, dogecoin, DAI, wrapped bitcoin, USDC, GUSD, PAX and Binance USD.
These potential crypto donors want Congress to take more action on the virtual currency industry, he said.
“I've been engaging with this community all across the country now, for more than just the last two years, and I would say with each month the engagement grows,” Emmer said.
He pointed to plans to provide financial services to unbanked individuals as one example.
“Frankly, the last administration had fits and starts in this area,” he said. “If we don't get moving on this, you're going to have a whole bunch of really smart entrepreneurs, and the capital that they are raising to create these opportunities, leaving the United States to start these things elsewhere.”
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The Biden Bunch Changing of the guard Key: (nom.) = nominee, (rum.) = rumored, (act.) = acting, (inc.) = incumbent (no replacement anticipated) Nothing new to report here.
A message from Saïd Business School, University of Oxford and Esme Learning Embrace the Fintech Revolution with the Oxford Fintech Programme. Saïd Business School, University of Oxford and Esme Learning are working in partnership to deliver the Oxford Fintech Programme, a six week, online course accessing critical industry and academic insights. You’ll gain foundational knowledge and explore emergent fintech trends from a global perspective, as part of an immersive cohort through a world-class centre of learning, teaching and research. As a CoinDesk subscriber, you can receive a 15% reduction on the programme fee when you register to attend.
Elsewhere A Reckoning for Binance and Other ‘Global’ Exchanges: Several financial regulators worldwide issued warnings against crypto exchanges, namely Binance. This is a trend worth watching. Huobi’s Tighter Derivatives Rules Leave Chinese Traders Scrambling for Alternatives: Speaking of crackdowns, Huobi is barring customers in certain regions from trading derivatives, leaving traders to find alternate trading venues on short notice.
CoinDesk Research Report on EIP 1559 EIP 1559: Ethereum's Fee Market Upgrade Explained
CoinDesk Research's newest report dives into the economic impacts and investment implications of Ethereum Improvement Proposal (EIP) 1559. At its core, the code change is designed to make transaction fees on Ethereum less volatile and more predictable.
At the same time, EIP 1559 also poses several risks to Ethereum including risks of miner capitulation or revolt, technological risk in the form of unexpected bugs, and risk of user disappointment.
In this report, CoinDesk Research gives an overview of how EIP 1559 works and its intended impact for investors, miners and users.
Outside CoinDesk (Financial Times) Earlier this year, the Ransomware Task Force published a report stating that bitcoin is ransomware developers’ cryptocurrency of choice for payments. The Financial Times is now reporting that groups deploying ransomware are increasingly looking to privacy coin monero. (United Nations) The UN published a report criticizing bitcoin’s energy use, but saying the underlying blockchain technology shows promise.
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