All Politics is Local. Politics are decided by local issues, and US crypto asset regulations have drifted from this golden rule. With the CBAM team on the road, a week away from home base is a reminder. The SEC proposed revision to the investment adviser Custody Rule was met with pointed feedback, Coinbase included – registered investment advisers could be greatly restricted from crypto activity, and the indemnification requirement of qualified custodians would limit services. In New York, local politics deviates from a national narrative. NYSDF effectively declared itself the “only prudential regulator with virtual asset-specific authority in the United States.” New York State also proposed legislation to bring crypto clarity, including the public reporting of financial statements. The US Financial Services Committee will host a hearing today on crypto regulatory gaps. It’s joint with the House Agriculture Committee, a nod that the CFTC may have a more important role to play than the SEC. What do international players make of these events? An analogy from the DBS CEO, with a progressive mindset on digital asset technologies, is especially interesting. During the pandemic, DBS used internal data analytics to identify 24 employees who were first-degree contacts. A quarantine followed. Local action, global policy. The move was welcomed in Singapore, but the CEO’s FT op-ed* was flamed in the West. DBS sees regulation as having global principles and local enforcement. The global nature of digital assets drives similar thinking. All politics may be local, but crypto asset technologies are not. Advancements will continue with or without you.
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