February 17, 2025

This week decoded

President Trump nominated new leadership to the CFTC, OCC, and CFPB.

In Congressional hearings, Fed Chair Jerome Powell spoke to CBDCs and debanking, while the House Financial Services Committee considered the future of digital assets in the U.S.

For those who haven’t yet registered, join me this week at a luncheon and panel discussion on Policy, Innovation, and the Future of Crypto on February 19 in Washington, DC.

Read more below

Congress

Hearings

• Last week
  • On February 11, the House Financial Services Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee held a hearing on A Golden Age of Digital Assets: Charting a Path Forward.
• • On February 11, the Senate Banking, Housing and Urban Affairs Committee held a hearing on the Semiannual Monetary Policy Report to the Congress with Fed Chair Jerome Powell.
  • On February 12, the House Financial Services Committee held a hearing on the Semiannual Monetary Policy Report to the Congress with Fed Chair Jerome Powell.
• This week
  • The House is in recess.
  • On February 20, the Senate Committee on Energy and Natural Resources will hold a hearing to Examine Research Security Risks Posed by Foreign Nationals from Countries of Risk Working at the Department of Energy’s National Laboratories and Necessary Mitigation Steps.

Legislation

• House Financial Services Committee Ranking Member Maxine Waters (D-CA) released a discussion draft of the payment stablecoin legislative text “agreed to by then Chair McHenry’s and Ranking Member Waters’ staffs” in the last Congress. Waters said the draft represents “years of good-faith, bipartisan negotiation and collaboration with regulators and stakeholders, last Congress, the Republican and Democratic Committee staff jointly drafted payment stablecoins legislation that would create a strong federal framework and put consumer protection front and center.” (Text)(Section-by-section)(Press release)

Correspondence

• House Financial Services Committee Ranking Member Maxine Waters (D-CA) and Rep. Brad Sherman (D-CA) sent a letter to Securities and Exchange Commission (SEC) Acting Chair Mark Uyeda expressing concern that Elon Musk will embed a DOGE team inside the SEC and gain access to the agency’s data, leading to market manipulation, data breaches, conflicts of interest, and the erosion of trust. (Letter)(Press release)

Publications

• House Financial Services Chair French Hill (R-AR) and Digital Assets Subcommittee Chair Bryan Steil (R-WI) published an op-ed in CoinDesk on Why Congress Needs to Act on Digital Assets, stating, “As leaders of digital assets on the House Financial Services Committee, our immediate priorities include establishing a federal framework with clear rules around stablecoins, providing clarity for the initial sale and distribution of tokens, creating pathways for the registration of centralized platforms for the trading of tokens, implementing strong protections against money laundering and terrorist financing, and ensuring fair competition.” (Op-ed)

• Sen. Kirsten Gillibrand (D-NY) published an op-ed in CoinDesk on Why We Need a Bipartisan Stablecoin Bill, calling for support for the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act she introduced with Sens. Bill Hagerty (R-TN), Cynthia Lummis (R-WY) and Tim Scott (R-SC).(Op-ed)(Press release)

Caucuses and Working Groups

• House Committee on Energy and Commerce Chair Brett Guthrie (R-KY) and Rep. John Joyce (R-PA) announced the establishment of a comprehensive data privacy working group and invited input from stakeholders. They said in a statement, “We strongly believe that a national data privacy standard is necessary to protect Americans’ rights online and maintain our country’s global leadership in digital technologies, including artificial intelligence. That’s why we are creating this working group, to bring members and stakeholders together to explore a framework for legislation that can get across the finish line. The need for comprehensive data privacy is greater than ever, and we are hopeful that we can start building a strong coalition to address this important issue.” (Press release)

Trump – Vance Administration

Commodity Futures Trading Commission (CFTC)

• President Trump nominated Brian Quintenz to be Chairman of the CFTC (Announcement)

Office of the Comptroller of the Currency (OCC)

• President Trump nominated Jonathan Gould to be Comptroller of the Currency for a term of five years. (Announcement)

Consumer Financial Protection Bureau (CFTC)

• President Trump nominated Jonathan McKernan to be Director of the Bureau of Consumer Financial Protection for a term of five years. (Announcement)

Noteworthy Quotes and Events

ADMINISTRATION

Federal Reserve

• During his appearance before the House Financial Services Committee, Fed Chair Jerome Powell said,
  • On CBDCs: “We’re not doing any work that is designed to lead to a retail CBDC. That’s just that’s not happening when we don’t we don’t support when we don’t have legal authority to do on. So no, the notion of a wholesale CBDC is really not one that we think about our except, you know, we have take Fedwire Fedwire is a real time, you know, digital process of trillions of dollars every day between between banks. Is that a CBDC? Some people would say.”
  • On debanking: “I think we’re all struck at the number of complaints and the breadth of them. And, you know, want to understand we want to take a fresh look at this at this area. It’s not something we’re not telling banks that they can’t bank, certain people from certain Institute, anything like that, nonetheless, we’re hearing these things and I take at least some of it is, is real. So we need to we need to understand it and stop it from happening, because and, you know, the, if you look at what the banks are saying, they’re really saying that a lot of this is that the enforcement of anti-money laundering is so tough, that at any sign any flag at all, it gets raised, they just cut people off. And they don’t and they can’t explain. So that may be part of it. But I think we need to do some work, get to the bottom of it and address this… Our banks are, you know, are doing business with crypto companies and they’re doing crypto inside the bank. Some of them are we’re we’ve been a little bit careful with it. But we I really don’t think we’ve been telling people they can’t do it.”

CONGRESS

House Financial Services Digital Assets Subcommittee Hearing

• In his opening statement Subcommittee Chair Bryan Steil (R-WI) said, “Where there are gaps in authorities, Congress can provide legislative solutions. Together, we can ensure that stablecoin issuers, digital asset firms, and blockchain developers can operate under fair, transparent, and predictable rules in the United States. That means working together—the Trump Administration, Congress, regulators, and market participants—to craft thoughtful policies that uphold our national security, protect investors, and encourage the responsible development of the digital asset ecosystem.”

• In his opening statement, Subcommittee Ranking Member Stephen Lynch (D-MA) said, “On the advent of this golden age of crypto, I remind my colleagues of the crypto winter in which major companies, including FTX, BlockFi, and Celsius collapsed, and Sam Bankman-Fried was convicted of massive fraud. Fortunately, because of our robust securities and consumer protection laws, most of the victims were not U.S. citizens. Similarly, the damage caused by the failures of Silicon Valley and Signature Banks did not spread to our broader financial system. I agree with most of my colleagues that a regulatory regime is needed, but not one that reflects a wish list from industry advocates. As this Committee considers legislation to address stablecoins and the market structure, I hope we can have collaborative and bipartisan discussions. We must seek input from law enforcement, the financial crimes enforcement network, academics and other experts to ensure robust consumer protection, anti-money laundering, and illicit finance safeguards are in place. I worry that by allowing the digital assets industry access to our banking system, we invite the next financial disaster. I served on this Committee during the 2008 financial crisis and watched American taxpayers bail out major financial institutions that made risky decisions in the name of innovation. The digital assets industry has had years to prove its use cases. Promises of financial inclusion, lower costs, and faster payments are better achieved through public policy solutions. This Subcommittee should focus its time on exploring legitimate innovations that have the potential to expand economic access.” (Press release)

• Lynch also tweeted, “As ranking member of the Digital Assets Subcommittee, I spoke to Chairman of the Federal Reserve, Jerome Powell regarding my concerns of the risks posed by crypto and the crypto industry on our economic stability, with scams and illicit finance costing Americans billions. The Trump Administration’s executive order to establish a Digital Assets Working Group which will be comprised of regulators handpicked by the crypto industry is concerning—and could be abused to further President Trump’s own financial interests. I will continue to work with my colleagues to prioritize consumer protections, support a new regulatory framework, and expand economic access and financial inclusion for all Americans.”

• In her questioning of Fed Chair Jerome Powell in the Senate Banking Committee hearing on the Federal Reserve Semi-Annual Monetary Policy Report, Sen. Cynthia Lummis (R-WY) said, “Your fellow governors have personally misled me on at least two occasions with respect to Wyoming and digital assets. And in recent federal court filings former Senator Pat Toomey has accused your staff of lying to him while providing technical assistance on legislation that passed in The National Defense Authorization Act in 2022. Now I have behind me a statement by the Feds General Counsel, one of the staff that’s sitting behind you today, who said, quote, ‘the Fed generally resists legislative prescriptions.’ Now, to me that’s thumbing his nose at Congress, the very people that you and I just agreed, you are responsible to, and the people depend on. So this is why the American people think there’s a deep state, this is why they think there are faceless bureaucrats making policy to hurt the very people of this country. Just look at the mess the Fed made of Silicon Valley Bank. And I contend that there is a lack of understanding that is deliberate on the part of the Fed with respect to digital asset policy.”

• Rep. Sylvia Garcia (D-TX) tweeted, “The cryptocurrency industry talks a big game about inclusion, especially for the unbanked—but so far, it’s just talk. As a member of the USHouseFSC Digital Assets Subcommittee, I’m working to ensure sure real financial inclusion, so no one gets left behind.”

• Rep. Byron Donalds (R-FL) tweeted, “Digital assets and blockchain technology hold vast potential to revolutionize the American economy. This afternoon, I joined my colleagues on the FinancialCmte Digital Assets, Financial Technology, and AI Subcommittee to examine existing-use cases with key industry actors.”

• Rep. Ayanna Pressley (D-MA) tweeted, “On one hand, Donald Trump will steal from working class people through a crypto-scam. On the other hand, the hardworking staff at CFPB will fight to get people their money back. That’s why we need this essential agency to be reopened to finish its necessary work.”

• Financial Services GOP tweeted, “Digital Assets Subcommittee Vice-Chair GOPMajorityWhip delivers remarks at the Committee’s Hearing on ‘A Golden Age of Digital Assets: Charting a Path Forward’: ‘The right leadership – the Trump Admin – welcomes this transformation and will doing everything in their power to make the US the crypto capital of the world.’”

• Financial Services GOP also tweeted, “WATCH: krakenfx’s Jonathan Jachym to RepHuizenga: ‘There has just been a complete lack of policymaking and it has been a regulation by enforcement regime by SECGov, using a decades-old jurisdictional test to try to shoehorn the diverse set of digital assets in the market….’”

Miscellaneous

• Sen. Roger Marshall (R-KS) said on Fox Business, “We’re losing 200 people Americans every day from fentanyl poisoning, and the money used for that is being laundered by the Chinese triad, this Chinese organized crime group, and using a crypto a lot of at times as well. So we need to unleash all the resources we have to secure our borders, but then chase the bad guys, as they say.” (Press release)

• Sen. Cynthia Lummis (R-WY) tweeted, “The Subcommittee on Digital Assets will expose the nameless, faceless, unelected bureaucrats who control banking in our country at the Fed.”

• Rep. Tom Emmer (R-MN) tweeted a video, saying, “POTUS sees the opportunities crypto brings to Americans. Not even a month into office, he’s created a government-wide commitment to crafting the regulatory guardrails the crypto industry has begged for since Joe Biden was elected.”

• Rep. Byron Donalds (R-FL) tweeted, “Despite protest, stable coins, crypto, and blockchain technology are not going away. Congress must work to ensure that there is a framework for the proliferation of what Americans want to invest-in moving forward.”

• Rep. Betty McCollum (D-MN) tweeted, “There’s a reason why Trump wants to shut down the Consumer Financial Protection Bureau: It helps working people fight back against irresponsible and risky financial practices. Who’s helped by a shuttered CFPB? Crypto billionaires, the big banks, and scammers.”

• House Committee on Agriculture tweeted, “Congrats to Brian Quintenz on his nomination as Chairman of the CFTC! He has the vision and expertise to lead the Commission into the future. We are excited to work with him to advance President Trump’s agenda on financial innovation, digital assets, & American markets”

Highlights of the Week

• Join me at a luncheon and panel discussion on Policy, Innovation, and the Future of Crypto on February 19 in Washington, DC. This informal networking event will bring together policymakers, crypto industry leaders, investors, and academics to explore the evolving intersection of cryptocurrency, blockchain technology, and public policy.   

What I’m Reading This Week

• The Sweeping Reach of the DeFi Broker Reporting Regulations, Lee Sheppard, Tax Notes, which begins “Crypto is a tax on stupidity. Crypto is money destruction.”

About Zero One Strategies

Zero One Strategies is a boutique government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.

The practice focuses on key areas such as artificial intelligence, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.

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