Category: Press Releases

The Digital Chamber Strengthens Advocacy Efforts with New Policy Hires 

by Simi Awe

For Immediate Release 
Date: September 4, 2024 
 

Washington, D.C. — The Digital Chamber is dedicated to advancing blockchain technology, and by adding three seasoned professionals, TDC enhances its ability to drive meaningful impact. Jean-Philippe Beaudet, Jackson Mueller, and Jonathan Rufrano bring a wealth of experience and expertise that will bolster the Chamber’s advocacy initiatives in the rapidly evolving digital asset and blockchain space. 

Jean-Philippe (JP) Beaudet joins us as a Policy Associate focused on national security. With a master’s degree from American University, JP offers fresh insights into emerging technologies and their implications for national security. His experience with National Security Leaders for America and the Washington Kurdish Institute adds a valuable perspective, bridging the gap between digital assets and global security concerns

Jackson Mueller joins us as Policy Director, bringing over 15 years of experience from his work at Securrency and the Milken Institute’s FinTech Program. His expertise in digital asset infrastructure and financial markets will be critical as TDC advocates for a balanced regulatory environment that supports innovation and growth in digital finance. 

Jonathan Rufrano, seasoned expert in policy development and regulatory affairs, joining us as Policy Director. With over a decade of experience in blockchain and international tech policy, he has made significant contributions to decentralized ID standards through ISO and NIST. Jonathan’s roles at Stanford, Spruce ID, and Chainalysis will be key instrumental in advancing our efforts in DeFi and fostering consumer innovation. 

“Our policy efforts are critical as the digital asset industry navigates increasing regulatory challenges,” said Cody Carbone, President of The Digital Chamber. “By welcoming JP, Jackson, and Jonathan to our policy team, we are enhancing our ability to represent our members, collaborate with policymakers and advocate for fair, sensible regulations that promote innovation and protect consumers. Their expertise will ensure that The Digital Chamber remains the leading voice in shaping policies that advance blockchain technology and digital assets responsibly.” 

These strategic hires reflect The Digital Chamber’s commitment to being at the forefront of policy discussions that shape the future of digital assets and blockchain technology. By expanding our team, TDC is better equipped to advocate for policies that foster innovation, security, and inclusive growth in the industry. 

About The Digital Chamber 

The Digital Chamber is a nonprofit organization committed to promoting blockchain adoption. We envision a fair and inclusive digital and financial ecosystem where everyone has the opportunity to participate. Access to digital assets is not merely a technological advancement but a fundamental human right, crucial for economic and social empowerment. Through targeted education, advocacy, and strategic collaborations with government and industry stakeholders, we drive innovation and shape policies that create a favorable environment for the blockchain technology ecosystem. 
 

For more information, please contact: 
The Digital Chamber 
press@digitalchamber.org  
www.digitalchamber.org 
 

Statement on President’s Working Group Report on Stablecoins

by Chamber

Statement from the Chamber of Digital Commerce on the release of the President’s Working Group (PWG) on Financial Markets “Report on Stablecoins”

November 1, 2021

“We are pleased to see that The President’s Working Group (PWG) report notes the important role stablecoins can play in faster, more efficient and resilient payment systems, and the need for a transparent and open process in developing policies for these emerging innovations, which is a reflection of the position we have held at the Chamber for many years.

The Chamber recently submitted to members of the PWG a letter detailing our recommendations for the regulatory treatment of stablecoins, including our view that stablecoins do not pose systemic risk to the financial system and are not securities.

That said, the Chamber has concerns regarding some of the report’s recommendations, such as prioritizing the Securities and Exchange Commission’s role over payments products, allowing multiple agencies to assert regulatory jurisdiction over stablecoins without specifying each agency’s role, and prescriptive Financial Stability Oversight Council (FSOC) policies, including considering designating certain activities as systemically important. Such actions could chill payments innovation during a crucial time when the United States should be encouraging innovation and adoption, and asserting leadership in the global digital asset marketplace.

The Chamber believes in the importance of a collaborative, bottom-up approach to setting a policy framework. In particular, the Chamber believes that this process should include input from the many state regulatory bodies that have first-hand experience in shaping successful policies for stablecoins. We appreciate the PWG’s engagement on this issue, and we look forward to engaging with the Biden Administration and policymakers in encouraging greater understanding of the stablecoin ecosystem and shaping policies that will serve consumers, investors and innovators well.”

Chamber of Digital Commerce Submits Open Letter to President’s Working Group on Stablecoins

by Chamber

Chamber of Digital Commerce Submits Open Letter to President’s Working Group on Stablecoins

October 19, 2021

Stablecoins Do Not Pose Systemic Risk to the Financial System and are Not Securities

In recent weeks the President’s Working Group on Financial Markets has been developing regulatory recommendations for stablecoin payments systems. In an effort to contribute to the policy dialogue, the Chamber of Digital Commerce, the world’s leading blockchain and digital asset trade association, today submitted to members of the President’s Working Group a letter detailing our recommendations for the regulatory treatment of stablecoins. The letter was also sent to all members of the Financial Stability Oversight Council.

“Stablecoins are already fulfilling their promise of transforming today’s payments systems by enabling efficient, low-cost payments and increasing access to the financial system,” said Chamber of Digital Commerce founder and president Perianne Boring. “As the President’s Working Group considers a regulatory framework for digital assets – and specifically stablecoins – a balanced policy approach that encourages innovation and maintains U.S. global leadership in the digital asset and blockchain ecosystem is crucial.”

The Chamber believes the current federal and state regulatory regimes should remain in place. This will allow U.S.-headquartered, U.S. dollar-pegged stablecoin payments systems to be regulated in the same way that other U.S. digital payments platforms are regulated. These stablecoin payments systems, like other retail-focused payments systems, do not currently pose a systemic risk to the U.S. financial system.

The Chamber, however, also sees opportunities to enhance the U.S. regulatory approach for stablecoins via a policy framework that is principles-based and flexible, which would allow for new and innovative payments system structures to grow, while appropriately addressing potential risks. Such policies include: 

  • Streamlining state-level regulatory approaches in a way that follows the lead of states that allow certain stablecoin payments systems to obtain state-level special purpose charters.
  • Ensuring federal agencies provide clarity that most stablecoins are retail-focused digital payments instruments, not investment products. 
  • Simplifying tax treatment for stablecoin transactions. 
  • And, at the federal level, creating an optional special-purpose charter for stablecoin payments systems that meet certain regulatory requirements.

“It is important for policymakers and consumers alike to understand that stablecoin payments systems offer opportunities for increased access to lower cost payments and financial services for everyone, but especially those who are currently underserved”, said Chamber chief policy officer Teana Baker-Taylor. “A policy framework that sets clear rules of the road, and is flexible enough to encourage ongoing payments innovation, is imperative to ensure the certainly needed by the digital asset industry to continue to build more efficient and effective payments systems.

To achieve these important goals, the Chamber urges policymakers to put in place an appropriate policy framework for stablecoins to attain their full potential. This policy framework is not just important to the digital asset and blockchain industry. It is important for the U.S. to maintain its leadership position in the global innovation economy. The Chamber hopes its comments help achieve these worthy goals.

Chamber Statement on DOJ Announcement of the Launch of the Crypto Currency Enforcement Team

by Chamber

Chamber Statement on the DOJ’s Announcement of the Launch of the National Cryptocurrency Enforcement Team

October 7, 2021

As crypto continues to mainstream, being accessed by exponentially more users every day, it’s imperative we mitigate the risks from illicit actors. Money laundering and ransomware are not new threats. However, as the use of crypto grows, it will be imperative that collaboration between the public private sector of crypto industry experts, who bring deep expertise in blockchain and transaction analytics, continues, so that we can together build a safer crypto ecosystem that enables the market and technology promises to flourish.

The Chamber’s AML Task Force, made up of both blockchain and former law enforcement experts, has been actively engaging with policy makers to educate on the importance of adequate cyber security and the ongoing role crypto market participants play in thwarting illicit activities and assisting law enforcement in identifying bad actors, tracking transactions, and recovering funds.

Chamber Statement on Clarity for Digital Tokens Act of 2021 Introduced by Ranking Member Patrick McHenry

by Chamber

Chamber statement on Clarity for Digital Tokens Act of 2021 introduced by Ranking Member Patrick McHenry

October 5, 2021

The Chamber of Digital Commerce applauds Ranking Member Patrick McHenry for his leadership in introducing today’s legislative proposal that provides a safe harbor framework for blockchain innovators creating and issuing digital tokens as they develop their networks toward a decentralized or functional technology platform.  This legislation has the potential to provide a much needed clear path forward for those creating new innovations and solutions leveraging digital tokens.

We believe that legislation of this type is particularly necessary in light of the fact that, despite widespread industry calls for action, the SEC has not yet itself promulgated rules or issued binding interpretive guidance setting out the clear legal framework needed for token issuers and market participants to determine whether a token is a digital asset security or a non-security digital asset.   To address this issue, in 2020 and 2021, SEC Commissioner Peirce published two versions of a Token Safe Harbor that creates a three year sandbox for token issuers under the federal securities laws, a safe harbor framework that is yet to be formally proposed by the SEC for public comment or adoption but is reflected in today’s legislation.

The Chamber also encourages further legislative efforts to provide clear legal frameworks across all aspects of this innovative space.

Chamber Responds to Basel Committee on Prudential Treatment of Cryptoassets

by Chamber

Chamber Responds to Basel Committee on Prudential Treatment of Cryptoasset Exposures

October 1, 2021

Known as the Bank for Central Banks, the Bank for International Settlements (BIS) is owned by 63 central monetary authorities representing more than 95% of the worlds’ GDP. Its influence on international monetary policy cannot be understated.

Recently, the BIS Basel Committee on Banking Supervision requested comments on its consultation on the prudential treatment of cryptoassets. So what does that mean for our industry?

Currently, international banks’ exposures to cryptoassets are limited, although the popularity and growth of these assets have risen exponentially in recent years. This limited exposure is because of the lack of clear regulatory certainty guiding international banks on how to treat cryptoassets. Until there are clear guidelines, many banks are on the sidelines unable or unwilling to fully participate in the market and provide crypto-centric products and services to their customers.

The Chamber joined five international organizations to form a cross-industry working group of trade associations representing financial institutions, capital markets, and digital asset innovators, to respond to the Basel Committee.

Our comment letter welcomed the Committee’s goal to include industry insight on the guiding framework for cryptoasset exposures and focused on the benefits banks can bring to the crypto market.Increased bank participation in the market would mean increased access to crypto services for customers, mitigated trading risk, and efficiencies in settlement and transactions -all of which benefits users and creates a competitive marketplace.

The suggestions we proposed ensure the benefits of blockchain technology are able to be utilized by businesses across the global economy. The industry can better serve the long term needs of its customers and continue to create innovative technologies with the increased participation of banks. But,only through regulatory certainty and guidance will this be able to become reality.

Chamber to IRS: Tax Payers Need Guidance on Crypto Tax Rules

by Chamber

Chamber to IRS: Tax Payers Need Guidance on Crypto Tax Rules

May 17, 2021

Over the past five years, the Internal Revenue Service (IRS) has significantly increased enforcement actions against taxpayers who transact in digital assets. But, while ratcheting up its enforcement, the IRS has not provided meaningful guidance on how to comply with tax rules since 2014.

“This disparity creates risk for taxpayers seeking to comply with the laws, wastes IRS audit resources, dampens commercial activity and economic recovery, and stifles U.S. innovation,” according to Amy Davine Kim, Chief Policy Officer at the Chamber of Digital Commerce.

This week, the Chamber published a policy position that identifies key areas where the agency must issue more guidance for taxpayers this year –– lending, information reporting, foreign bank account reporting, characterization of digital assets, and proof of stake protocols. It also sent a letter to the IRS on the application of the Foreign Account Tax Compliance Act (FATCA) to digital assets.

Background: 

Since 2016, when the IRS issued a “John Doe” summons to Coinbase seeking information on customers who engaged in transactions at or above $20,000, the digital assets community has seen growing enforcement-related activity as the IRS began focusing on identifying taxpayers who may have tripped up by lack of clarity.

In 2020, the agency added a question relating to cryptocurrency on its Form 1040 for individual taxpayers. “At any time during 2019,” the IRS asked, “did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” And for the 2020 tax season, the agency moved the question right to the top of the form, displayed prominently just below the request for personal information. The IRS also sent over 10,000 taxpayers “soft letters” suggesting they may not have complied with tax reporting requirements and threatening an audit if the taxpayers did not respond to the agency’s inquiry. These letters were criticized as violating the Taxpayers Bill of Rights by the IRS’ own Taxpayer Advocate.

Recently, at a hearing before the Senate Committee on Finance, IRS Commissioner Chuck Rettig identified the need for clarity on information reporting for cryptocurrency transactions. Information reporting requires companies to report to the IRS wage and non-wage income that relate to a trade or business. Information reporting guidance would result in increased tax compliance and decreased enforcement actions. The Chamber brought this to the IRS’ attention in a letter last year describing the need for guidance regarding information reporting – a key tool to assist taxpayers in providing accurate income information –  but the agency has yet to release such guidance. In addition to the Taxpayer Advocate, the IRS has been criticized repeatedly for not providing guidance by the Treasury Inspector for General Tax Administration and the Government Accountability Office.

Highlights of the Tax Policy Framework: 

The Chamber’s policy framework identifies key areas in which the IRS must provide clarity and guidance for digital asset transactions in 2021. The goal of these recommendations is to ensure that digital asset tax policies are adopted to assist compliance and encourage innovation, economic activity, entrepreneurship, investment, and collaboration in the areas of:

      • Digital asset lending;
      • Information reporting;
      • Foreign bank account reporting;
      • Characterization of digital assets; and
      • Proof of stake protocols.

In addition to its policy framework, the Chamber separately wrote a letter to the IRS on the potential application of the Foreign Account Tax Compliance Act to digital assets. The law requires foreign financial institutions to report foreign accounts held by U.S. persons. Currently, the law does not apply to digital assets. Nevertheless, anticipating that the IRS is considering the application of FATCA to digital assets held offshore, we provide guidance to ensure better outcomes for the industry before they are published.

Our letter raises key factors the IRS must take into account, such as:

        • The need for public notice and comment if the IRS decides to apply FATCA to digital assets.
        • What is a “foreign” account in the digital asset industry?
        • Are digital assets financial assets? 
        • What types of accounts (custodial, non-custodial) should be subject to FATCA reporting? 

The policy framework and letter regarding FATCA’s application will enable better compliance with tax obligations by taxpayers and avoid unnecessary punitive measures by the IRS. 

Proof of Reserves – Establishing Best Practices to Build Trust in the Digital Assets Industry

by Chamber

Proof of Reserves – Establishing Best Practices  to Build Trust in the Digital Assets Industry

Download the Chamber’s Proof of Reserves Report

Background: As the digital assets industry has developed, both consumers and institutional investors have relied on large custodians, exchanges, and other intermediaries to custody their assets.  These intermediaries are entrusted with maintaining adequate digital asset reserves to meet customer liabilities (those digital assets the exchange or custodian holds for its customers).

The Problem: The growth of the industry has resulted in uneven and inconsistent methods for proving the existence of reserves to meet customer liabilities. Investors and customers need assurance that their funds are properly managed. Digital assets by their very nature offer built-in transparency but, until now, the innate cryptographic auditability of these assets has been woefully underutilized, despite the low technical barriers to doing so.

Bottom Line: At the end of the day, this is a very simple concept, that custodians need to be able to prove that they are indeed holding the assets that their clients have entrusted to their care. This is called Proof of Reserves (PoR).

PoR involves comparing on-chain assets held in reserve to off-chain liabilities. In other words, it empowers consumers to audit digital asset reserves held by a custodian on demand. But, despite a flurry of interest in 2015 in the wake of the failure of Mt. Gox, Proof of Reserves has failed to gain widespread adoption. Why would such a valuable practice be so infrequently and inconsistently applied, despite its benefits in promoting and maintaining industry trust and growth?

Our Proposed Solution: Here at the Chamber of Digital Commerce, we’ve been working to frame a consistent, industry-wide standard for Proof of Reserves to increase the confidence level of consumers, policymakers, and regulators that exchanges and custodians are managing their assets appropriately. We have created a comprehensive Best Practices resource to serve the industry with practical guidance on the core concepts of Proof of Reserves and implementation. The Best Practices, documented in this robust Practitioner’s Guide, brings together a diverse group of key industry stakeholders and subject matter experts, including digital asset custodians, exchanges, and legal and auditing professionals. This marks the first time the industry has an actionable rubric for adopting this important standard.

The Impact: Proof of Reserves is a profoundly self-regulatory measure. Using this framework, firms holding digital assets on behalf of third parties can use this trust-generating procedure. Ultimately, if the industry takes advantage of the transparency afforded by digital assets, consumers will be better protected, intermediaries will benefit from transparent practices, and regulators will appreciate these proactive measures. Put simply, it’s a win-win situation all around, for consumers, industry, and government.

Conclusion: As the industry continues to mature, it logically follows that building Proof of Reserves into custodians’ core practices will result in greater market share as well as customer, institutional, and governmental trust. If these Best Practices are adopted, for the first time, digital asset firms will benefit from the actionable intelligence specifically tailored to their needs. This effort is an important first step to bringing Proof of Reserves the attention it deserves, creating further industry engagement around trust models, and advancing our shared stewardship of the digital and decentralized future.

We are grateful to the authors and contributors who worked tirelessly to develop these comprehensive best practices with respect to creating Proof of Platform Reserves, including Members of the Leadership Committee: Noah Buxton, Armanino LLP; Nic Carter, Castle Island Ventures and Coin Metrics; Patrick South, TRM Labs; and Salvatore Ternullo, KPMG.

For More Information: 

Please contact: policy@digitalchamber.org.

Chamber of Digital Commerce and Texas Blockchain Council Publish Texas Edition of State Legislator’s Toolkit

by Chamber

Chamber of Digital Commerce and Texas Blockchain Council Publish Texas Edition of State Legislator’s Toolkit

March 16, 2021

The Chamber of Digital Commerce and the Texas Blockchain Council published the State Legislator’s Toolkit: Texas Edition as a resource for Texas state legislators. As the blockchain industry in Texas continues to grow, policymakers will find this toolkit useful to gain a deeper understanding of the technology and ways it can bring unprecedented economic growth to the State. This edition of the State Legislator’s Toolkit includes insights on how blockchain development will positively impact Texas’ economy, legislative proposals, and an overview of state legislative developments.

“The size and dynamism of Texas’ economy makes it an ideal place to host innovative companies working on blockchain technology and the digital economy. Texas has unparalleled expertise at establishing an environment where business thrives,” said Lee Bratcher, Founder and President, Texas Blockchain Council. “The original State Legislator’s Toolkit is a great educational resource, and we enjoyed working with the Chamber of Digital Commerce to build out the Texas Edition,” Bratcher added.

The Dallas, Austin/San Antonio, Houston triangle, referred to as “the Texas Triangle,” is home to 53 of the 54 Texas-based Fortune 500 companies, and this is where blockchain innovators are heading. “The exodus from the Bay Area to central Texas in the past few months confirms that our engineering talent and capital are growing,” Bratcher noted.

Blockchain technology, in the hands of capable entrepreneurs and engineers, has incredible potential and requires a well-conceived regulatory framework. It must deter clear violations of law while encouraging innovation, and must be flexible and transparent so that those working to bring products to market can innovate freely.

“The Chamber of Digital Commerce was proud to partner with the Texas Blockchain Council to develop the Texas Edition, and we look forward to seeing how Texas lawmakers use it to support blockchain development and innovation in their State,” said Divij Pandya, Associate Director of Policy at the Chamber of Digital Commerce.

Open Letter to the Biden-Harris Administration

by Chamber

Open Letter to the Biden-Harris Administration

March 2, 2021

We need to act NOW – The U.S. stands to lose its competitive edge in global financial leadership if we don’t have a national plan for blockchain technology & crypto.

We are urging the Biden-Harris Administration to secure the country’s financial leadership and make blockchain technology a national priority through:

    • Establishing a national action plan for blockchain;
    • Increasing regulatory clarity for digital tokens;
    • Promoting tax policy for virtual currency that supports informed compliance; and
    • Using blockchain technology to enhance anti-money laundering and sanctions compliance, and encourage responsible industry growth.