January retail sales data released at 8:30 a.m. … House Financial Services hearing on federal support for minority depository institutions and community development financial institutions at 10 a.m. … Federal Open Market Committee minutes released at 2 p.m. TREASURY: REGULATORS CAN’T FULLY OVERSEE STABLECOINS — Our Sam Sutton: “Regulators don’t have enough authority to fully oversee stablecoins, and no action from the Financial Stability Oversight Council can change that, Treasury undersecretary for domestic finance Nellie Liang said on Tuesday.” “FSOC has some tools but it is not a substitute. It would not provide a comprehensive, consistent framework that legislation could provide,” Liang said at a Senate Banking Committee hearing. —In an op-ed in Barron’s this morning, Circle CEO Jeremy Allaire and Stellar Development Foundation CEO Denelle Dixon argue the government should help set clear rules of the road for stablecoins to protect monetary policy, consumers and innovation. “These rules will create stability through the use of strong U.S. dollar stablecoins, which in turn support the government's goal of having a strong dollar.” POLITICO PRO Q&A: BROCK PIERCE, CRYPTO TITAN — Our Amanda Eisenberg sat down with Brock Pierce, the cryptocurrency titan who co-founded Tether and is exploring a run for Sen. Patrick Leahy's (D-Vt.) seat, to discuss the “future economy” in New York. How do you convince someone who’s unbanked to convert that money to crypto, Amanda asked. “You don't even need to be a crypto sort of currency person to benefit from these technologies,” Pierce said. “It's driving accessibility in dollars and allowing people to receive a yield on their dollars. The interest rates, with completely securitized environments with smart contracts, code-is-law kind of thing, you're getting between 5 and 15 percent interest on your digital dollars with near-zero risk.” SENATE TO SETTLE FOR SYMBOLIC REBUKE AS RUSSIA SANCTIONS TALKS FIZZLE — Our Andrew Desiderio: “The Senate’s ambitions to sanction Russia shrank so quickly this week that instead, Vladimir Putin is being confronted only with a sternly worded statement. “As the U.S. warns of a potentially imminent Russian invasion of Ukraine, senators paused their flailing negotiations over punishments for Moscow — designed to deter military action that some see as inevitable — and instead released a symbolic bipartisan statement affirming Ukraine’s sovereignty as they prepare for a week-long recess.” —Meanwhile: Behind the scenes, U.S. and European officials are still hammering out the details of how hard to hit Moscow with sanctions, and when, our Nahal Toosi, Andrew Desiderio and Jacopo Barigazzi report. US ACCUSES ZERO HEDGE OF SPREADING RUSSIAN PROPAGANDA — AP’s Nomaan Merchant — “U.S. intelligence officials on Tuesday accused a conservative financial news website with a significant American readership of amplifying Kremlin propaganda and alleged five media outlets targeting Ukrainians have taken direction from Russian spies. “The officials said Zero Hedge, which has 1.2 million Twitter followers, published articles created by Moscow-controlled media that were then shared by outlets and people unaware of their nexus to Russian intelligence. The officials did not say whether they thought Zero Hedge knew of any links to spy agencies and did not allege direct links between the website and Russia. “Zero Hedge denied the claims and said it tries to ‘publish a wide spectrum of views that cover both sides of a given story.’” DEMOCRATS VOW TO CURB INFLATION, AS GOP SAVORS TOLD-YOU-SO MOMENT — Bloomberg’s Laura Litvan: “Congressional Democrats grappling with surging inflation nine months before the midterm elections are lining up legislation to address rising gas, medical and food costs — or at least show voters they’re trying. “Democrats, particularly those in hotly competitive races, just introduced legislation that would suspend the federal 18-cents-per-gallon gas tax until next year and are drafting a bill that would reduce insulin prices. Other options include pulling out popular pieces of President Joe Biden’s stalled economic agenda addressing prescription drug prices and child care costs.” MORGAN STANLEY’S PASSI FACES BLOCK TRADING PROBE — Bloomberg’s Gillian Tan, Katherine Burton and Sridhar Natarajan: “U.S. authorities are examining the involvement of one of Morgan Stanley’s top equities executives in block trades as part of an investigation into whether banks improperly alerted certain clients to market-moving transactions, according to people with knowledge of the matter. “Pawan Passi, who ran Morgan Stanley’s U.S. equity syndicate desk and led the firm’s communications with investors for equity transactions, is among people whose activities are facing scrutiny, the people said, asking not to be identified describing the confidential inquiry. Bloomberg reported in November that Morgan Stanley had put Passi on leave.”
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