JEC Report Calls for Crypto Regulation
The Joint Economic Committee (JEC) released a report late Friday arguing that recent contraction in the digital-asset market demonstrates the need for more regulation. While it does not outline specific policy changes, the report asserts that new regulations must strive to keep digital assets separate from the broader economy to prevent contagion, as well as ensure that investors are properly informed on digital asset’s individual risks.
KC Fed Discounts SLR Relief as Solution to ONRRP Growth
A Friday brief from the Kansas City Fed concludes that limited money-market investment opportunities, policy uncertainty, and ONRRP changes such as easier eligibility better explain the sharp increase in ONRRP than bank-capital shortages as deposits flowed to MMFs. As a result, the paper concludes that reinstating SLR exemptions for central-bank deposits and Treasury obligations would not materially affect bank use of the ONRRP and thus facilitate Fed balance-sheet reduction.
McHenry Tees Up Fintech Action for New Congress
Incoming Chairman McHenry (R-NC) today reintroduced legislation designed to facilitate financial innovation, kicking off his chairmanship’s focus on fintech, crypto, and other financial technology related matters. The bill does not address priority policy questions in this contentious arena, instead creating a pathway for financial innovators to request information on whether they are eligible for exemptions from relevant regulations from the banking agencies and CFPB.