Welcome to the Friday edition of the Crypto In America newsletter!

We’re closing out the week with a look at CFTC Chair nominee Brian Quintenz’s meetings with Senators ahead of his upcoming nomination hearing before the Senate Agriculture Committee.

Donald Trump’s nominee to lead the Commodity Futures Trading Commission, Brian Quintenz, has started meeting with members of the Senate Agriculture Committee in a bid to secure their support ahead of the upcoming vote to advance his nomination.

While the Agriculture Committee has not yet officially scheduled Brian Quintenz’s appearance, Crypto In America has learned that efforts are underway to hold the hearing later this month.

In anticipation, Quintenz met with Committee Chairman Senator John Boozman (R-AR) in his office on Thursday where the two discussed the CFTC’s role in risk management, supporting the agriculture industry, and fostering innovation within those areas.

In a meeting with committee member Senator Chuck Grassley (R-IA) earlier in the week, the pair discussed the possibility of the CFTC gaining direct jurisdiction over digital asset spot markets, in addition to its existing authority over futures markets.

The proposal to give the CFTC more authority over regulating crypto has been raised by senior members of the Trump administration, who have expressed interest in seeing the Securities and Exchange Commission take a more focused role in regulating securities while allowing the CFTC to oversee the broader scope of the crypto market, including spot trading.

The move would require approval from Congress, particularly the Senate Agriculture Committee, which oversees the CFTC. The committee would need to authorize additional funding for the agency to take on this expanded role.

Cryptex Advances Efforts to Influence DeFi Policy in Washington

U.S. DeFi platform Cryptex is preparing to expand its presence in Washington D.C. to ensure that decentralized finance protocols are properly represented in the crypto policy discussions taking place in the nation’s capital.

This week, Cryptex launched an on-chain vote, allowing its community to decide whether funds from its DAO (Decentralized Autonomous Organization) should be allocated to support its advocacy efforts in Washington, D.C. The proposal passed with majority support, positioning Cryptex as one of the first U.S.-based DAOs to actively engage in policy advocacy at the federal level.

“The future of decentralized finance in the United States will be decided in Washington,” Cryptex founder Joe Sticco told Crypto In America. “This is not just about Cryptex — it’s about ensuring all decentralized protocols have a voice in Washington. If we don’t engage now, centralized financial institutions and legacy entities will dictate the future of the space.”

The unique nature of DeFi, with no central authority to regulate, will be a key consideration for lawmakers as they work to establish clear rules for the crypto industry. DeFi advocates are hoping that market structure legislation, currently being worked on in the House, will allow for a regulatory framework that accommodates decentralized platforms as well as centralized ones like exchanges.

Weekly Recap

Here are some of the biggest news stories this week from the intersection of Washington and Web3:

• Paul Atkins, nominated by President Trump to serve as SEC Chair, has been approved by the Senate Banking Committee, receiving no support from Democratic members. His nomination now advances to the full Senate for a vote, which will be scheduled at the discretion of Senate Majority Leader John Thune.

• After a 13-hour markup session, the House Financial Services Committee passed the bipartisan STABLE Act, the House's stablecoin legislation, with a 32-17 vote. Notably, six Democrats supported the bill.

• A district judge has granted Coinbase’s request to restart litigation in its FOIA lawsuit against the FDIC after Coinbase filed a motion earlier this week alleging the agency was being uncooperative in complying with its requests for information.

• Eliezer Mishory, Kalshi’s Chief Regulatory Officer, has transitioned to lead the Department of Government Efficiency (DOGE) at the Securities and Exchange Commission. Before joining Kalshi in 2021, Mishory was an attorney at both the CFTC and the IRS.

• A recent report from Trammell Venture Partners reveals that Bitcoin-related startup deals surged by 50% in 2024, and a whopping 767% since 2021. The growth in 2024 can be traced to Bitcoin's rally, fueled by Wall Street’s involvement in Bitcoin ETFs and positive rhetoric from then-presidential candidate Donald Trump.

• Crypto prices took a hit in reaction to Trump’s ‘Liberation Day’ tariffs with Bitcoin falling from around $88,000 to $82,000 following his Wednesday announcement. Crypto stocks like Coinbase and Strategy also fell sharply and are on track to end the week lower.

• Circle, the issuer of stablecoin USDC, officially filed with the Securities and Exchange Commission to go public on the New York Stock Exchange. The company will list under the ticker CRCL and is aiming for a market valuation of around $5 billion.

Remember, new editions of the Crypto In America newsletter drop every Monday, Wednesday and Friday at 7AM EST.

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Larry Fink, CEO and Chairman of the world’s largest asset manager BlackRock, touched on three blockchain related topics in this year’s annual letter. The first part of his letter was about how private markets have been out of reach for most investors and BlackRock is in the process of changing that. For the same reason, the digital assets sector often sees private assets as low hanging fruit for tokenization, as illustrated in this State Street survey.

Later he moved on to tokenization, highlighting how fractionalization can democratize access. Finally he referenced Bitcoin. On the one hand, BlackRock manages the largest Bitcoin ETF. However, his concern is more about getting control over the United States’ government debt.

“Decentralized finance is an extraordinary innovation. It makes markets faster, cheaper, and more transparent. Yet that same innovation could undermine America’s economic advantage if investors begin seeing Bitcoin as a safer bet than the dollar,” he wrote.

He also shared that half of the demand for the Bitcoin ETF has been retail, and three quarters of those investors are new to iShares ETFs.

Private assets and tokenization

On the tokenization front, Mr Fink noted that the “world’s money moves through plumbing built when trading floors still shouted orders and fax machines felt revolutionary.” He was less than complimentary about payments network SWIFT saying it was like routing emails through a post office. SWIFT currently dominates cross border payments, which are seen as a major real world use case for stablecoins. And it’s worth remembering that BlackRock looks after most of the reserve assets for the second largest stablecoin issuer, Circle.

He is bullish on tokenization because he sees it as democratizing access, shareholder voting and yield. The access is because tokenization enables fractionalization, lowering the barrier to entry. Even for relatively wealthy people, lower investment amounts will allow them to diversify their investment. Of course, people can vote already, but blockchain can potentially make it easier. He had one caveat about tokenization 👉 the need for digital identity.

Despite BlackRock managing the largest Bitcoin ETF, there was a striking omission in Fink’s projections for the future of investing: cryptocurrency itself. While he outlined a shift from the traditional 60:40 split between stocks and bonds toward a 50:30:20 allocation (stocks, bonds, and private assets), cryptocurrency doesn’t fit neatly into any of these categories.

Fink acknowledged that 20% of investments already exist in private assets, currently accessible primarily to institutional investors. And he highlighted how BlackRock plans to democratize access to these investments, including infrastructure and real estate. Potentially, that could include tokenization. Yet the absence of cryptocurrency in this long-term investment framework is notable, given BlackRock’s current role as a crypto asset manager.

Source

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Sumitomo Mitsui Financial Group, the parent of Japan’s second largest bank SMBC, is planning to issue a stablecoin. It’s collaborating with Ava Labs, the founder of the Avalanche blockchain, as well as Fireblocks, according to a report from the Nikkei.

The bank will work with Japanese IT firm TIS and plans to conduct experiments in Q4 of this year or 2026 Q1, with a live issuance during the following year.

One of the primary use cases is to enable corporates to move money around the world instantly and 24/7, sidestepping Swift. While Swift payments should in theory be almost instant, in reality they tend to be delayed by foreign banks that have different opening hours and rely on the receiving bank crediting the recipient promptly. Additional intermediary banks are often involved, which are not necessary with stablecoins.

Other big US banks are already targeting this use case. JP Morgan has its Kinexys Digital Payments (formerly JPM Coin), a blockchain based bank account. And Citi launched its Citi Token Services. Both use permissioned blockchains.

While Avalanche is a permissionless blockchain, it supports permissioned chains as subnets. For example, its Spruce testnet has institutions as validators. Hence, it remains to be seen which path SMBC adopts.

SMBC’s other blockchain initiatives

Meanwhile, SMBC is also one of the backers of Progmat, the Japanese tokenization platform. It has a stablecoin issuance platform, Progmat Coin. SMBC joined the other big three Japanese banks, MUFG and Mizuho, in an ongoing stablecoin sandwich trial referred to as Project Pax.

A stablecoin sandwich refers to a situation where a stablecoin sits at the heart of a transaction, but it may look like a normal payment to the sender and recipient. The three banks plan for their clients to make trade payments in the usual way, and to use Swift messages. However, stablecoins will replace correspondent banks.

Two years ago, our sources told us that SMBC had joined Partior, the cross border blockchain payment system co-founded by DBS, JP Morgan and Temasek. Partior combines a permissioned blockchain with correspondent banking, removing the typical delays and enabling instant cross border payments. SMBC has not yet confirmed it will participate in Partior. However, the other bank we reported simultaneously – Deutsche Bank – recently said it invested in Partior, highlighting the accuracy of the report.

Hence, SMBC is adopting a multipronged approach to speed up cross border payments using blockchain.

Source

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