Hello and welcome to this week’s edition of Overbit News. Our first story covers how crypto giant, Circle, wants to become a Federally chartered crypto bank amid a crackdown on stablecoins. CircleFinancial, the second-biggest stablecoin issuer, is looking to give US regulators even more oversight of its cryptocurrency business as executives at Tether, its larger rival, are said to be facing a criminal probe by US prosecutors.
Circle has established a goal of being the first full-service federally-chartered crypto bank in the United States, as the surging value of cryptocurrencies has spurred regulatory concerns of a bubble, which might lead to a run on the banks-style exodus.
Chief Executive Officer Jeremy Allaire said during an interview on Bloomberg Television, “over time there will be hundreds of billions of dollars of these types of digital currency in circulation,”
The Office of the Comptroller of the Currency (OCC) is in charge of bank chartering in the United States, and it issued some crypto-friendly charters during the Trump administration. However, the OCC has put the brakes on granting licenses in recent months as regulators seek to develop a unified policy approach to crypto, casting doubt on Circle’s campaign, at least in the short term.
On Monday, Allaire announced its ambition to become a bank in a blog post but did not specify when it expects to apply. An OCC representative stated that the commission does not have a charter application for Circle and has no more comment on the company’s ambition. According to CoinGecko.com, the market value of Circle’s USDC stablecoin (a cryptocurrency linked to an asset such as the US dollar) has risen to $27.6 billion, up from $3.7 billion last year making it the second-largest of its kind.
Tether, the largest stablecoin, is apparently being investigated over whether CEOs misled banks about crypto-related transactions early on, feeding authorities’ concerns about money laundering and uncontrolled banking institutions.
Closing out today’s Overbit News, we look at the cryptocurrency markets that continue to rise – even in the face of potential regulation in the United States.
The Bitcoin price surpassed $46,000 on Monday morning, capping up a high-stakes weekend for the crypto sector, as the Senate kept discussing the specifics of its role in the still-unpassed infrastructure package. On Sunday night, the Senate postponed the infrastructure bill vote until Tuesday to allow for additional time to discuss two opposing amendments to a Bitcoin tax provision.
In a news conference on Monday, Sen. Pat Toomey, R-Pa. The senators behind the competing amendments submitted a compromise proposal prepared with the Treasury Department late Monday morning.
Senators Ron Wyden (D-Ore.) and Ted Cruz (R-Texas) have emerged as defenders of the cryptocurrency industry, rallying their social media followers to call their senators and urge them to take a no-harm approach to the infrastructure bill’s crypto tax provision, joining crypto advocates Sen. Cynthia Lummis (R-Wyo.). as well as Toomey.
The markets are most likely reacting to the fact that cryptocurrency is getting serious attention and has a rising number of friends on Capitol Hill, according to Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, on CNBC’s “Squawk on the Street” on Monday.
Sen. Lummis stated at a news conference on Monday that regardless of the outcome of the crypto tax provision, the previous week’s talks educated many in Congress who were previously unfamiliar with crypto, calling it a success for the sector as a whole. All in all, despite the initial grim outlook, it certainly seems there may be a silver lining throughout this whole US infrastructure and cryptocurrency debacle.
Thanks as always for reading Overbit News. See you next time.