Neither the author Kingsley Alo nor this website, The Tokenist, provide financial advice. Please consult our website guidelines before making any financial decisions.
US politicians continue to call for regulations for cryptocurrency markets. Just yesterday, two US Congressmen sent a bipartisan letter to the Security and Exchange Commission (SEC) demanding the approval of Spot Bitcoin Exchange Traded Funds (ETFs). The letter to SEC Chairman Gary Gensler was co-authored by Congressmen Todd Emmer and Darren Soto.
What did the letter say?
In the letter, congressmen questioned the agency’s reservations about approving a bitcoin spot ETF despite having already admitted two futures bitcoin ETFs to trading.
“We question why, if you want to easily allow trading in ETFs based on derivative contracts, you are not as or more likely to allow trading in ETFs based on Spot Bitcoin. Bitcoin spot ETFs are based directly on the asset, which is inherently more protective for investors. “
In addition, the letter addressed the SEC’s concerns about possible price manipulation for Bitcoin spot EFTs. The SEC claims that Bitcoin prices can be easily manipulated by market participants, hence their reluctance to approve the spot ETF, which it sees as a safeguard for investors.
In their letter, however, Congressmen argued that the price index used by the CME futures ETF was sourced from Coinbase, Kraken, and Bitstamp – all of which are spot exchanges. They indicated that 90.47% of the CME CF Bitcoin Reference Rate (BRR) is obtained from these platforms.
The letter ended by asking the SEC to capitalize on the growing interest in Bitcoin spot ETFs, as evidenced by over $ 40 billion in assets under management (AUM) in the numerous investment vehicles available. Because both spot ETFs and futures ETFs have similar risks of price manipulation, a persistent rejection of spot ETFs would contradict the concerns expressed by the SEC.
Furthermore, the expectation that the SEC would lead the government’s mandate to regulate the crypto industry seems misguided. This has resulted in more calls to Congress to take control and act in the best interests of the government.
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The Mayor of Miami is paid in Bitcoin
Miami Mayor Francis Suarez has confirmed his readiness to receive his paycheck in Bitcoin. The mayor, who was re-elected in the last election, hinted at it in a tweet, mentioning the city’s technology innovation director Mike Sarasti.
The tweet was in response to a question from Morgan Creek Capital Management’s crypto influencer Anthony Pompliano:
Mayor Suarez has been a long-time Bitcoin supporter and has repeatedly campaigned for Miami to become the center for digital finance. In October, he revealed plans to pay city employees in crypto. A move, he says, that will allow citizens to pay for goods, services and taxes in Bitcoin when government approval arrives.
Growing political interest in crypto
It is no surprise that US politicians at all levels are advocating Bitcoin adoption. This situation can lead to more favorable laws being enacted to regulate the industry.
Earlier this year, a pro-Bitcoin US Senator, Cynthia Lummis, was appointed to the US Banking Committee. Many viewed the appointment as positive news for crypto’s advances toward adoption.
SENATOR LUMMIS is now a member of the Senate’s Banking Committee.
Folks, a #bitcoiner is in Senate Banking !!
We kept our fingers crossed for that. It means a whole lot of good stuff. # Bitcoin
– Caitlin Long (@CaitlinLong_) February 4, 2021
Congress has also seen more of its members openly demanding more regulation from the government to help control the emerging industries. The Congressional Blockchain Caucasus and Senator Ted Cruz have all spoken out loudly in favor of the crypto space.
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About the author
Alo Kingsley is a financial writer with over 4 years of experience in blockchain and cryptocurrency news. Alo first discovered Bitcoin in 2016 and has been passionate about it ever since, especially the different ways blockchain can help Africa and the world at large. It aims to give the crypto space a more geographically balanced narrative as it evolves. His articles have been published in Cointelegraph, Beincrypto and Forkast.news, among others.