Author: Nicole Rankin

Stablecoins are not just the future of finance—they’re the key to maintaining the U.S. dollar as the world’s leading reserve currency. Once viewed as a tool exclusively for crypto asset trading, stablecoins are redefining global finance by unlocking financial well-being and freedom for a growing, global user base.   

As stablecoin use cases expand beyond facilitating crypto trading to supporting cross-border payments, trade settlement, remittances, payroll, and even enabling access to high-yield financial products—they create new opportunities for users to interact with U.S. dollars, digitally. What was once viewed as a niche financial tool, stablecoins are gradually opening up new, non-crypto-related economic opportunities for users in far-away markets through increased access to dollar-denominated digital payment rails.  

What Are Stablecoins?  

While there is no universally agreed legal or regulatory definition of stablecoin, a ‘stablecoin’ is generally viewed as a type of digital asset that aims to maintain a stable value relative to a specified asset, or a pool or basket of assets. Currently, there are more than $170 billion worth of stablecoins are in circulation today, and a whopping 98 percent of those are linked to the U.S. dollar. Unlike other cryptocurrencies, stablecoins offer price stability, making them an appealing alternative to traditional financial systems. But beyond their importance in protecting crypto asset traders from wild price swings in the underlying cryptocurrency, the utility of stablecoins is increasingly evolving to meet growing demand and preference, particularly from emerging markets, for dollar-denominated financial services.   

Why This Matters  

One of the defining characteristics of stablecoins is their borderless nature. The ability to enable faster, cheaper, and more inclusive financial transactions and services make stablecoins an indispensable tool for the millions of people underserved by traditional financial markets. Given user preference for dollar-denominated financial services, USD-linked stablecoins are a critical tool to extend the global dominance of the U.S. dollar, expand dollar access to new markets, and protect our national security interests at a time of heightened geopolitical instability. As the stablecoin market expands, U.S. policymakers have a unique opportunity to strengthen the dollar’s position on the global stage, extend U.S. financial influence, and protect against the development and scaling of adversarial payment systems.  

The Urgent Need for Stablecoin Policies  

Despite the promise of USD-linked stablecoins, the U.S. has yet to implement a regulatory framework that fully capitalizes on this opportunity. This regulatory gap could leave an open door for other countries to develop their own stablecoin frameworks, potentially diminishing the dollar’s influence in the process.  

Lawmakers must act now to ensure the U.S. remains at the forefront of this digital financial revolution. In our new report, How Stablecoins are Extending U.S. Dollar Dominance: A Policymaker’s Guide to Action, we provide policy recommendations that can help guide U.S. lawmakers in creating a comprehensive framework to secure the dollar’s influence and leadership in the digital age.  

The time for action is now.   

---

I am pleased to share with you a significant milestone in our ongoing efforts to shape public policy related to Non-Fungible Tokens (NFTs) and the metaverse.  

I have the privilege of leading the NFT Working Group. The Digital Chamber is leading an effort to draft emerging practices for NFTs that we hope to have considered for formal recommendations to the Commodity Futures Trading Commission. 

This is where you come in: In an effort towards transparency and inclusivity, we would like to invite the entire community to participate in shaping our emerging practices and recommendations for NFTs. 

Today, we are making our draft report public and opening a comment period on our website. Following the closure of comments on April 26, 2024, The Digital Chamber will carefully review all feedback, integrate the relevant suggestions, and then present the finalized report to the NFT Working Group, and then the Digital Asset Markets Subcommittee for presentation. 

I invite you to take advantage of this unique opportunity to help shape the blockchain policy landscape. 

Your insights are invaluable to us, and we encourage you to share your feedback.  
​​
Sincerely,  



Perianne Boring
Founder and CEO,
The Digital Chamber

---

Title: Non-Fungible Tokens, Education and Emerging Practices

Start Date: April 5, 2024 
End Date: April 26, 2024  

COMMENT PERIOD ENDED

---

Industry Statement on EIA’s Emergency Survey 

The following statement can be attributed to Lee Bratcher, Board Member and President at the Texas Blockchain Council, and Perianne Boring, Founder and CEO of the Chamber of Digital Commerce, in response to the U.S. Energy Information Administration (EIA) announcing an unprecedented Information Collection Request from identified cryptocurrency mining companies operating in the United States: 

“The EIA’s mandatory emergency survey of electricity consumption data represents the latest in a politically motivated campaign against Bitcoin mining, cryptocurrency, and U.S.-led innovation. We believe this should cause concern for all industries that rely on data centers as part of their operations.  

Instead of focusing on improving our aging electricity infrastructure and working to ensure grid stability, the Department of Energy and EIA have prioritized taking unprecedented steps to target private businesses for political purposes. This action is an abuse of authority in order to further the Biden administration’s public goal “to limit or eliminate” U.S. Bitcoin miners, while pleading ignorance to U.S. miner’s utilization of renewable resources and uniquely flexible operations.  

Thanks to Bitcoin miners’ ability to rapidly adjust their data centers’ power usage according to grid conditions, their operations are the most flexible and responsive electrical loads in the nation. It is well known that they offer critical grid stabilizing benefits to the communities in which they operate. These capabilities were on full display during recent periods of cold weather in Texas, which the EIA boldly cites in its justification for this misguided measure. If the stated justification for this emergency action – concern with data centers potentially overloading the grid – is to be trusted, other industries, such as financial institutions and social media companies, should now also be on notice of this troubling new tactic.  

Bitcoin miners comprise one of the most transparent industries in the world. (See, e.g., EIA Website, Hashrate Index, Cambridge University, Texas A&M, ERCOT Data). Moreover, each data center’s development entails exhaustive investment, administrative, procurement, and construction processes before they can begin operations. These facts belie the purported justification for this ‘emergency’ mandate.  

This is an attack against a legitimate American businesses with the administration feigning an emergency to score political points. The White House has been clear that they desire to ‘to limit or eliminate’ Bitcoin miners from operating in the United States. Although Bitcoin is resilient and cannot be banned, the administration is seeking to make the lives of Bitcoin miners, their employees, and their communities too difficult to bear operating in the United States. This is deeply concerning.  

We strongly believe EIA has overstepped its authority in issuing this emergency mandate. We urge the Biden administration to reconsider this course of action. Until that time, we will be pursuing all legal recourses available to us.” 

The Chamber of Digital Commerce applauds the bipartisan initiative taken by Senator Cynthia Lummis (R-WY) along with Representatives Mike Flood (R-NE) and Wiley Nickel (D-NC) for their commitment to overturning the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) 121. SAB 121 has negatively impacted consumers and breached the integrity of the rulemaking process.  

Today’s bipartisan resolution represents a decisive action to ensure the SEC operates within its designated rulemaking authority. By failing to issue SAB 121 in adherence with the rulemaking process, the SEC bypassed established procedures, compromising the integrity of the regulatory framework, and violating principles of transparent and inclusive governance.  

Moreover, SAB 121’s implementation imposed stringent restrictions on banks and other trusted custodians’ ability to manage digital assets. This not only heightened the risks of consumers delving into digital asset investments, but also increased their financial burdens, making it more challenging for them to safely engage with digital assets.  

As we celebrate this milestone, let us also prepare for the road ahead. We will continue to engage with our allies in Congress, the industry, and the broader community to ensure that this resolution passes and SAB 121 is nullified as we pave the way for the responsible, innovative growth of the digital asset sector.  

Background:  

• The SEC issued SAB 121 in March 2022. It presented an unworkable regulatory environment for digital asset custodians by mandating an equivalent liability on the balance sheet for each held digital asset. This requirement, both unprecedented and financially unfeasible, threatened the operational viability of digital asset custodians.  

• In response, the Chamber of Digital Commerce’s Token Alliance established our SAB 121 workstream, driving advocacy efforts to rescind the unworkable rule. The workstream has submitted eight letters to Congress concerning digital asset custody matters, engaged with the SEC’s Office of the Chief Accountant, and urged the Government Accountability Office (GAO) to review the rule in a collaborative effort with Senator Lummis and Representative McHenry.  

• In October 2023, the GAO conducted a comprehensive review and concluded that SAB 121 qualifies as a rule under the Congressional Review Act (CRA). This classification was due to its nature as an agency statement of general applicability and future effect, aimed at interpreting and prescribing policy. 

• CRA allows Congress to review and approve/disapprove rules issued by federal agencies for a period of 60 days (if rule not submitted, its 60 days from GAO opinion). If Congress does not agree with the rule, each chamber may pass a resolution of disapproval that must be signed by the President. If a rule is nullified by a resolution of disapproval, the rule is void and the SEC is prohibited from reissuing a similar regulation without congressional authorization.  

• Resolutions of disapproval need to be passed by both Houses of Congress by a simple majority vote – so Senate only needs 51 votes not 60.  

• This resolution must also be signed by the President. Successfully passing this resolution not only stops the rule from being implemented or remaining in effect but also prevents the agency from reintroducing a similar rule unless new legislation permits it. 

WASHINGTON, D.C., Jan. 10, 2024 — The Chamber of Digital Commerce congratulates the Bitcoin community on the approval of eleven spot bitcoin ETFs applications for U.S. public markets. Marking a historic victory for the industry, The Chamber and its members take pride in their dedicated advocacy, playing a crucial role in supporting this achievement. 

ETFs have consistently ranked among the most popular investment vehicles, and today’s approval empowers issuers to provide investors with transparent, liquid, and cost-effective exposure to bitcoin. Through this approval, the SEC is greatly expanding the opportunities for retail investors to buy and hold bitcoin, the highest-performing investment asset in the world for eleven of the past fourteen years.  

As Perianne Boring, Founder and CEO of the Chamber of Digital Commerce, noted, “Retail investors seeking exposure to bitcoin now have much easier and more direct access to the asset through many of the top financial institutions. They now have a very simple and straightforward way to allocate a percentage of their investments into bitcoin, and the peace of mind that comes from holding it in their existing investment portfolios. This alone is a transformational event for hundreds of millions of investors and the bitcoin community.”    

Over the years, The Chamber has championed this approval through several key strategies:  

• Research: Their report, “The Crypto Conundrum: Why Won’t the SEC Approve a Bitcoin ETF,” laid the groundwork for their advocacy efforts. It provided a detailed analysis of the investing community’s pursuit of a spot bitcoin ETF and the SEC’s increasingly unjustifiable refusal to approve it.  
• Advocacy: The Chamber’s report reached all 535 Members of Congress, collaborating with members to educate Congress on the SEC’s discriminatory treatment of digital asset funds. They had held multiple briefings for the Senate Banking and House Financial Services Committees, urging them to exercise their oversight function over the SEC.  
• Oversight: Due to The Chamber’s advocacy efforts, Congress challenged the SEC’s handling of spot bitcoin ETF applications in six Congressional hearings. 
• Litigation: The Chamber of Digital Commerce joined other industry trade organizations to submit an amicus brief in the Grayscale v. SEC case, where the Court ruled the SEC acted in an arbitrary and capricious manner in denying Grayscale’s application. The Chamber’s research played an important role in this legal victory, which has undoubtedly helped compel the SEC to approve spot bitcoin ETFs.  

Boring concluded on an optimistic note, “This green light opens new doors for U.S. investors, paving the way for increased adoption. While we have many challenges ahead, we’re looking forward to a future marked by expanded opportunities and a thriving ecosystem.” 

The Chamber of Digital Commerce wants to congratulate its members whose applications were approved today – Bitwise Asset Management (BITB), Fidelity Asset Management (FBTC), Invesco (BTCO), and Wisdom Tree (BTCW), as well as all other approved issuers.  The Chamber also congratulates its law firm members who supported these issuers in their efforts – Chapman and Cutler, Clifford Chance, and Perkins Coie – as well as State Street, who is also providing important services around these approved products. 

### 

About the Chamber of Digital Commerce: 

The Chamber of Digital Commerce is the original and preeminent trade association dedicated to digital assets. Our mission is to ensure that the United States remains the leading hub for bitcoin, digital assets, and blockchain technology. We educate and assist policymakers and regulatory bodies, while advocating for industry. Our goal is to develop a legal landscape that fosters innovation, job growth, and attracts investment.  

What happened? There is a new requirement from the U.S. Internal Revenue Service (IRS) for individuals or businesses that receive more than $10,000 in digital assets to report these transactions to the IRS and the Treasury’s Financial Crimes Enforcement Network (FinCEN). This requirement was put into place by an amendment to Internal Revenue Code Section 6050I, which was part of the Infrastructure Investment and Jobs Act passed in 2021. This means that, like cash transactions over $10,000, transactions involving cryptocurrencies or other digital assets that exceed this amount must be reported to the IRS and FinCEN to ensure tax compliance and to combat money laundering and tax evasion.

Effective Date: The statute is effective for returns required to be filed after December 31, 2023. Although there are regulations and an IRS form (Form 8300) implementing Section 6050I prior to the amendment, the IRS has not provided any guidance on how the reporting requirement applies to digital asset transactions.

On December 4, the Department of Justice, representing Treasury Secretary Janet Yellen, in a brief to the United States Court of Appeals for the Sixth Circuit stated, “the mere fact that the amendment to Section 6050I has a January 1, 2024 effective date does not mean that the statute’s new reporting requirement will automatically go into effect on that date.”[1] Furthermore, the brief states “Like other provisions of the Internal Revenue Code that have similar language, Section 6050I’s reporting requirements are not self-executing and will become effective following the promulgation of implementing regulations.”[2]

These statements would indicate then that the effective date is delayed until there are implementing regulations clarifying how Section 6050I would apply to digital asset transactions. 

What’s next? Given this uncertainty and the complexities surrounding the application of Section 6050I to digital assets, and the criminal penalties for noncompliance, we strongly encourage all digital asset businesses to consult with legal and tax counsel. It is crucial to understand how this new law may impact your business operations and reporting requirements. Legal and tax counsel can provide tailored advice and help you navigate these changes effectively, ensuring that your business remains compliant with the evolving regulatory landscape.

We understand that these changes can be challenging or near impossible to adapt to, especially in a rapidly evolving industry like digital assets. Please know that The Chamber of Digital Commerce is committed to advocating for additional clarity and providing our members and the broader digital asset community with the most up-to-date information and resources to assist you during this transition.

---

[1] Hubbert, D. A., Ugolini, F., Delsol, E. P., & Klimas, G. J. (2023). Brief for the appellees in Dan Carman, Coin Center, Raymond Walsh, and Quiet Industries Corp. v. Janet Yellen, U.S. Department of the Treasury, Daniel Werfel, Internal Revenue Service, Merrick B. Garland, and United States of America [Brief for the appellees]. No. 23-5662. In the United States Court of Appeals for the Sixth Circuit.

[2] Ibid.

The Chamber of Digital Commerce, representing the world’s leading innovation in digital assets and blockchain technology, has been closely monitoring the Securities and Exchange Commission’s (SEC) recent enforcement action against Kraken. This development is particularly concerning as it represents another instance of the SEC’s aggressive regulatory approach towards the digital asset industry. 

We have consistently emphasized the importance of a balanced and clear regulatory framework that not only protects consumers but also fosters an environment conducive to innovation. The ongoing situation with Kraken further underscores the urgency for Congress to provide legislative clarity that thwarts the overreach and unjust tactics of the SEC.  

“The time is now for Congress to step up and do their job of actually legislating, so entrepreneurs can innovate and continue to make America a premier destination for emerging technologies,” said Cody Carbone, Vice President of Policy. “The pattern of SEC overreach in the digital asset world is unacceptable.” 

We will be monitoring this action closely. The Chamber of Digital Commerce remains committed to advocating for a regulatory landscape that is fair, transparent, and conducive to innovation.  

We express our profound disappointment regarding Governor Kathy Hochul’s decision to veto the bipartisan bill S1891, which proposed the creation of a cryptocurrency and blockchain study task force. This veto represents a missed opportunity.

The formation of this task force was a pivotal step towards understanding and navigating the complex and rapidly evolving landscape of cryptocurrencies and blockchain technology. Its purpose was to ensure that New York remains at the forefront of innovation while protecting consumers and maintaining market integrity. The veto of this bill impedes New York’s ability to adapt to and shape the future of finance and technology.

We hope Governor Hochul will reconsider this decision, recognizing the critical need for informed and balanced regulation in the digital assets sector. The Digital Chamber’s commitment to advocating for smart, balanced regulation of digital assets remains unwavering. We will continue our efforts at every level – state, federal, and international – to champion regulations that foster innovation, ensure market stability, and protect the interests of all stakeholders in this dynamic industry.