October 15, 2024 | Read Online

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Ben Strack and Casey Wagner of Blockworks' Forward Guidance newsletter are taking over the Daily this week. If you enjoy these editions, be sure to subscribe to Forward Guidance for daily updates on the growing intersection between crypto and macroeconomics, policy and finance.

Harris punts on crypto talking points, again

Hours after pledging to support Black men's rights to safely invest in crypto, Vice President Kamala Harris's Monday night speech fell short on delivering details.

Harris's "Opportunity Agenda for Black Men" debuted Monday morning. The policy proposal emphasizes how the administration will elevate the Black male community by giving them tools to "build wealth, support their families and lead their communities."

One of these wealth-building tools? Give Black men the opportunity to "benefit from financial innovation" — namely, crypto.

Specifically, the agenda states Harris is committed to "supporting a regulatory framework for cryptocurrency and other digital assets so Black men who invest in and own these assets are protected."

The proposal was published ahead of Harris's planned rally in Erie, PA last night. More on that soon. First, let's talk about the response.

Many praised the initiative as a welcome effort to elevate a marginalized community. Others criticized the language in the agenda, saying it's frustrating that Harris's administration sees Black men in crypto solely as investors (as opposed to leaders and builders).

The agenda itself mentions crypto twice. The first time was quoted above.

Here's the second: "More than 20% of Black Americans own or have owned cryptocurrency assets. Vice President Harris appreciates the ways in which new technologies can broaden access to banking and financial services."

It's similar to the limited statements we've heard from Harris on crypto in the past — decidedly not negative, but perhaps too vague to be truly positive. Last month the presidential hopeful mentioned blockchain/digital assets twice; once at a fundraising event in New York where she said she'd "encourage" new technologies like crypto, and a second time during a speech in Pennsylvania, where she said the US will "remain dominant" in blockchain technology.

But last night's appearance in PA left those hoping for more crypto-focused comments disappointed. She mentioned blockchain a total of zero times.

Still, maybe beggars can't be choosers? Are limited, unclear remarks better than nothing? Galaxy Research's Alex Thorn argues that Harris's (relative) clarity is at least better than the current administration's. In Galaxy's "policy scorecard" released Monday, analysts say Harris is, on several issues, "somewhat supportive" and "slightly better than Biden."

Alex Thorn @intangiblecoins

TRIGGER ALERT 🚨

i'm releasing our policy scorecard on the positions of biden, harris, and trump on major bitcoin & crypto issues

bottom line: while trump is undoubtedly more favorable for the industry, we're optimistic that harris could be more supportive than biden has been

3:12 PM • Oct 14, 2024

469 Likes 73 Retweets

49 Replies

These issues include the industry's relationship with the SEC, Harris's approach to bitcoin mining regulations and her stance on banking laws.

Specifically, Thorn said, Harris has hinted that she's interested in easing the so-called "Operation Chokepoint 2.0" policy that has sought to isolate crypto players from the banking system. But these ratings are based on a very limited sample pool; we just don't have a lot to go off of when trying to evaluate Harris.

Trump, compared to Harris, has given the public more definitive stances on crypto. He wants to fire Gary Gensler. He wants to make the US a bitcoin mining hub. He wants to stop the US government from selling seized bitcoin.

When it comes down to it, though, we don't have a comprehensive policy proposal on digital assets from either candidate. All we can do is analyze what they have said and look to the members of their respective teams to try and glean an opinion. But time is running out.

— Casey Wagner

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DTCC revisits tokenization segment at 'inflection point'

It was almost a year ago exactly that the Depository Trust & Clearing Corporation (DTCC) revealed its buy of blockchain-based financial and regulatory tech developer Securrency.

Now, the financial market infrastructure giant has introduced a so-called sandbox to "clear the path to scalable adoption of digital assets."

For those who don't know, the DTCC (per its website), processes trillions of dollars in securities transactions daily.

Dubbed DTCC Digital Launchpad, the new offering seeks to connect tech providers and others to collaborate on "pilots that have a clear path to production."

The Japan Securities Clearing Corporation (JSCC) led a proof-of-concept on the platform to explore how central counterparties could use tokenization within the collateral management process for clearing members and their buy-side firms. It paid special attention to how margin calls could be automated — boosting efficiency and transparency using digital assets and smart contracts.

Ultimately, JSCC used DTCC's blockchain-based infrastructure to issue digital assets such as cash, stocks and bonds, JSCC CEO Konuma Yasuyuki noted in a statement.

Last year's Securrency deal was meant to allow DTCC to quicken the development of a platform designed to "unlock the power of institutional DeFi," the company said at the time.

Elliot Chun, a partner at advisory firm Architect Partners, wrote in a research note last year that tokenization had not yet lived up to its promise.

"The fundamental way to move the industry forward is by having a critically important market participant make a significant investment in technology," Chun said in that October 2023 post. "You can't get more critical than DTCC."

DTCC's release points to the projection that $16 trillion worth of tokenized securities could live on digital rails by 2030. Standard Chartered expects the tokenized real-world asset market to hit $30 trillion by 2034.

We've seen plenty of tokenization efforts take place in recent months — from TradFi players' test of a Regulated Settlement Network to Visa's tokenized asset platform sandbox launch.

And yet adoption of this technology has seemed to stall, argues DTCC digital assets head Nadine Chakar. The industry is indeed at "an inflection point," the executive told Blockworks Tuesday.

"Innovation is an evolving process; if we continue developing in silos, we risk repeating the mistakes of the past and creating more fragmentation in markets," Chakar noted. "We believe DTCC can play a critical role in developing this ecosystem, building a common infrastructure by encouraging industry collaboration around standards, data, liquidity and infrastructure."

It may take a little while to know the impact of this new DTCC offering (with pilots and participants expected to be publicized in Q1 2025), but it'll be worth paying attention to.

— Ben Strack

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