Crypto in the Capitol: Any More Clarity on Clarity?
Attendees look for signals on market structure progress as lawmakers prepare for the DC Blockchain Summit
Welcome to the Monday edition of the Crypto In America newsletter!
What you’ll read: Industry, lawmakers and regulators gather in the capital for a big crypto conference week; the Custodia Bank case could be ripe for a Supreme Court look; some weekend headlines, and what to watch this week.
As House and Senate Republicans gear up to fight over voter ID and housing legislation, crypto — itself a recurring flashpoint on Capitol Hill — may prove a welcome respite for the dozens of lawmakers attending the Digital Chamber’s DC Blockchain Summit this week.
Senate Banking Committee Chair Tim Scott (R-SC), set to kick off the event on Tuesday in a fireside chat, is expected to be asked the crucial question: When will his committee hold the next markup?
While Scott may be obliged to give a ballpark estimate, a markup cannot be put on the calendar until all the pieces of the bill are ironed out, including the headline issue of stablecoin yield. Digital Chamber CEO Cody Carbone believes negotiations between the crypto industry and banks are nearing a conclusion: ban yield on idle balances, and allowing transaction-based rewards.
“They’re getting closer and closer to a deal, so I feel very confident we can reach a resolution in the next week,” Carbone told Crypto In America on Friday.
But guessing games are dangerous on Capitol Hill, and this deal has a lot of cooks in the kitchen.
Aside from the industry stakeholders involved in the negotiations, Senators. Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) have come up as key players. Both have been sympathetic to banks’ concerns over the potential for deposit flight if crypto firms are allowed to offer high-yield alternatives to traditional savings accounts.
Some in the industry describe the senators as the gatekeepers — once they are satisfied with the legislative language from both sides, the issue can (in theory) be put to bed and the remaining quibbles over DeFi and token classification can be wrapped up.
Last week, a spokesperson for Tillis told Crypto In America that the senator is continuing to engage with stakeholders to work toward a compromise.
While Tillis will not be present at the summit this week, Alsobrooks is expected to address the latest efforts to resolve the yield debate in her speech on Wednesday.
Custodia May Appeal to the Supreme Court After 10th Circuit Loss
The 10th Circuit of Appeals on Friday rejected Custodia Bank’s request for a full court rehearing in its fight to obtain a Federal Reserve master account, effectively exhausting the Wyoming crypto bank’s options in the lower courts.
The move follows an October split ruling (2-1) from a three-judge panel that found the Fed’s reserve banks have legal discretion to deny master accounts. The panel sided with a Wyoming district judge, who concluded the Federal Reserve was not required to grant Custodia access even though it qualified as an eligible depository institution.
Friday’s decision, by ten active judges who voted 7–3 against rehearing the case, is notable for two reasons.
First, two of the judges who voted against Custodia — Obama appointees Robert Bacharach and Nancy Moritz — appeared to depart from their own reasoning in the 2017 cannabis banking case, Fourth Corner Credit Union v. Federal Reserve. In that case, Bacharach wrote that federal law “unambiguously entitles” eligible depository institutions to a Federal Reserve master account, and he cited statutory language, legislative history, and prior interpretations by the Fed itself. Moritz wrote that without a master account, a bank is essentially just “a vault.”
Second, the decision leaves the door open for a last legal path: an appeal to the U.S. Supreme Court.
It’s no guarantee the Supreme Court would agree to hear the case — it takes only about 1% of petitions filed each year. But there are some reasons Custodia could be optimistic.
The last time a case involving the Federal Reserve as a defendant reached the high court was in 2024, when the Supreme Court agreed to hear Corner Post v. Federal Reserve after the plaintiff lost in both district court and unanimously (3-0) at the Eighth Circuit. The procedural path was not unlike Custodia’s.
Unlike Corner Post, though, Custodia has three dissenting judges on its side. In a written dissent, Judges Timothy Tymkovich and Allison Eid warned the ruling gives Reserve Banks “unreviewable discretion” to deny accounts to state-chartered banks in direct contravention of the Monetary Control Act of 1980, which expanded Fed access to non-member depository institutions. Judge Harris Hartz also voted in favor of Custodia’s petition to have the case be reheard.
According to one Supreme Court lawyer, the fact that three judges agreed with Custodia on this premise gives the case a higher-than-average chance of being heard by the Supreme Court.
Custodia did not respond to a request for comment by press time.
👀 What To Watch This Week
Monday
The House and Senate are back, kicking off a big week for crypto in Washington as DC Blockchain Week gets underway.
1:00 p.m.: ETHDC, hosted by DCDAO, kicks off at Pubkey, bringing together builders, VCs and DeFi/TradFi policy wonks. Crypto In America will record a live episode with Brian Nistler, head of policy and general counsel at Uniswap Labs.
4:00 p.m.: Senators Steve Daines (R-MT), Cynthia Lummis (R-WY) and Congressman Mike Carey (R-OH) will host a joint roundtable on crypto tax.
Tuesday
10:40 a.m.: Day 1 of the DC Blockchain Summit, hosted by the Digital Chamber, opens with a fireside chat with Senate Banking Committee Chairman Tim Scott (R-SC). Comptroller of the Currency Jonathan Gould follows (11:10 a.m.), along with a panel featuring House Agriculture Committee Chairman GT Thompson (R-PA) and Rep. Dusty Johnson (R-SD) (2:55 p.m.). The day wraps with keynote speeches from CFTC Chairman Michael Selig (3:50 p.m.) and SEC Chairman Paul Atkins (4:00 p.m.).
Wednesday
Bitcoin miner BitFarms (BitF) reports earnings before the opening bell.
8:30 a.m.: The Bureau of Labor Statistics releases the February Producer Price Index (PPI), a key measure of inflation.
9:05 a.m.: Day 2 of the DC Blockchain Summit begins with FDIC Chair Travis Hill in a fireside chat, followed by a discussion with Binance founder CZ on his new book, “Freedom of Money” (9:25 a.m.). Later in the day, SEC Commissioner Hester Peirce (1:55 p.m.) and White House Crypto Council Executive Director Patrick Witt (2:55 p.m.) are set to speak.
Several members of Congress are also slated to appear, including Senators Bill Hagerty (R-TN), Cynthia Lummis (R-WY), Kirsten Gillibrand (D-NY), Angela Alsobrooks (D-MD), Katie Britt (R-AL), Steve Daines (R-MT), and John Husted (R-OH). Representatives Tom Emmer (R-MN), Bryan Steil (R-WI), Byron Donalds (R-FL), Max Miller (R-OH), and Steven Horsford (D-NV) will also attend.
Crypto In America will record a live episode with Rumble CEO Chris Pavlovski at 12:40 p.m. We’ll also make a special on-stage announcement, so remember to tune in!
2:00 p.m.: The Federal Reserve announces its next interest rate decision, and Chairman Jerome Powell is scheduled to speak to the press at 2:30 p.m.
Thursday
10:00 a.m.: The Federal Reserve holds an open board meeting on potential changes to bank capital requirements. The FDIC is meeting on the same topic at the same time.
Crypto exchange Gemini reports earnings after the closing bell.
Weekend News Flash
ICYMI: The biggest headlines from Friday and the weekend.
Bitcoin is on track to have its best week since September, rising about 8.5% and trading above $71,000.
Crypto trading firm BlockFills has filed for Chapter 11 bankruptcy in Delaware after suspending withdrawals and racking up roughly $75 million in losses. The firm is also facing a lawsuit alleging it misused customer funds.
The Senate passed the 21st Century ROAD to Housing Act, voting 89-10. The Act includes a provision that would ban the Federal Reserve from issuing a retail CBDC until 2031.
The website associated with President Trump’s memecoin ($TRUMP) announced an exclusive conference and gala luncheon at the White House next month for the token’s top 297 holders, sending its price up 50% in 24 hours. The token is now trading around $3.85.
A federal judge blocked the DOJ’s criminal investigation into Federal Reserve Chairman Jerome Powell, citing political motivations and a lack of evidence. U.S. Attorney Jeanine Pirro says the DOJ plans to appeal, which could affect the timeline for confirmation of Kevin Warsh as Powell’s replacement.
United States fourth-quarter gross domestic product slowed to +0.7 percent annualized, below the +1.4 percent estimate.
Organizers of the TOKEN2049 crypto conference in Dubai say the event will be postponed until 2027 due to ongoing uncertainty in the Middle East.
BlackRock debuted a staked Ether ETF (ETHB), offering ETH exposure and staking rewards.
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Thank you for the information. As usually very insightful!