Weekly Roundup

McHenry Exits: U.S. Rep. Patrick McHenry (R-NC) announced this week that he will not seek re-election in 2024. The Financial Services Committee chair and former speaker pro tempore released a statement laying out his reasons for retirement, saying, “This is not a decision I come to lightly, but I believe there is a season for everything and—for me—this season has come to an end.”

Crypto Lobbying Intensifies: According to data from OpenSecret, crypto companies spent $18.96 million on lobbying efforts in the first three fiscal quarters of 2023. Coinbase led the sector-wide lobbying efforts, spending $2.16 million on initiatives to seek regulatory clarity for the industry, followed by Foris DAX, the Blockchain Association, and Binance Holdings.

Thriving Money Market Funds: Money market fund managers are witnessing an unprecedented influx of cash in 2023, with nearly $1.19 trillion pouring into US money market funds since January 1. This surge is attributed to the Federal Reserve’s aggressive interest rate hikes, which have attracted investors seeking the highest yields in recent memory. While the focus on money market funds has been driven by retail investors, industry experts anticipate that institutional investors will also join in 2024 as the easing cycle begins.

Gensler’s Agenda: In a statement released this week, SEC Chair Gary Gensler emphasized his focus on enacting an agenda that focuses on shaping a regulatory landscape that accounts for the technological and business model advances of this decade. Specifically, Gensler said that his priorities when proposing any new rule will be bolstering the “efficiency, integrity, and resiliency of the markets.”

Cash-Flow Statements Face New Regulations: U.S. regulators are closely examining cash-flow statements and their impact upon investors. Specifically, the SEC is reviewing how companies address errors in these statements and the Financial Accounting Standards Board is considering expanded disclosure requirements on cash-flow statements.

Republican Candidates Address Crypto: At this week’s  Republican presidential debate, crypto policy became a focal point as Vivek Ramaswamy addressed the need for regulatory updates in response to recent high-profile cases, such as former Binance CEO Changpeng Zhao’s fraud conviction. Others on the debate stage mentioned reducing the SEC’s workforce, exempting bitcoin from capital gains tax, and supporting the right to self-custody bitcoin.

AI Investment Opportunities: Numerous market strategists have recently highlighted that the most promising investment opportunity over the next two to three years might lie in U.S. large-cap stocks that leverage AI to enhance their services rather than investing directly in AI developers. These leading analysts, such as Ron Temple, chief market strategist at Lazard, acknowledge the revolutionary potential of generative AI and machine intelligence but highlight the challenges of justifying the high valuations of existing AI developers.

In the Mix: This Week’s Top FinTech Thought Leader

  • At a conference hosted by The Messenger, SEC Chair Gary Gensler spoke about the number of issues associated with businesses making false claims related to artificial intelligence, which sector experts have dubbed as  “AI washing.” Gensler compared this practice to greenwashing and made clear that the SEC will be cracking down on bogus AI claims. “Don’t do it,” said Gensler, “One shouldn’t greenwash and one shouldn’t AI wash.”

  • During a Senate Banking Committee hearing this week, Jamie Dimon, CEO of JPMorgan Chase, warned lawmakers about what he views are the dangers cryptocurrencies pose to the wider global economy. “I’ve always been deeply opposed to crypto, bitcoin, etc.,” said Dimon. “The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance.”