Today in crypto: Republicans press for action on a market-structure bill amid debanking allegations. Michael Saylor’s Strategy set up a new reserve from stock sales to cover at least 12 months of dividends and expanded its Bitcoin holdings to 650,000 BTC. Meanwhile, China pledged to crack down on stablecoins and a renewed rise in crypto trading.
Republicans urge action on market structure bill over debanking claims
Republican lawmakers on the US House Financial Services Committee and House Oversight Subcommittee have released a final report on what they called “debanking of digital assets,” claiming that the previous administration was responsible for cutting off access to financial services for some crypto companies and individuals.
In a Monday notice, House Financial Services Chair French Hill and Oversight Subcommittee Chair Dan Meuser claimed that regulators under the administration of former US President Joe Biden “used vague rules, excessive discretion, informal guidance, and aggressive enforcement actions to pressure banks away from serving digital asset clients” — actions many Republicans have referred to as “Operation Choke Point 2.0.”
The report concluded that legislative action, among other measures, was necessary to provide clarity for the cryptocurrency industry. Hill and Meuser said, “Congress must enact digital asset market structure legislation,” known as the CLARITY Act, and other bills targeting the cryptocurrency industry.
“Overall, the CLARITY Act heads off a future Operation Choke Point 3.0 by reversing the SEC’s regulation by enforcement approach, enabling market participants to lawfully operate in the US under clear rules of the road, and making clear that banks may engage in the digital asset ecosystem,” said the report.
The Digital Asset Market Structure bill, which was passed by lawmakers in the House of Representatives in July, is under consideration in the Republican-led Senate Agriculture Committee and the Senate Banking Committee, both of which have released their versions of draft legislation.
Senate Banking Chair Tim Scott said in November that the committee planned to have the bill ready for signing into law by early 2026.
Strategy sets up $1.4 billion cash reserve, lifts Bitcoin stash to 650,000 BTC
Strategy, the world’s largest public Bitcoin holder, is creating a $1.44 billion US dollar reserve to support dividend payments on its preferred stock and interest on its outstanding debt.
Strategy on Monday announced the establishment of a US dollar reserve funded through proceeds from the sale of Class A common stock under its at-the-market offering program.
“Strategy’s current intention is to maintain a USD Reserve in an amount sufficient to fund at least twelve months of its dividends, and Strategy intends to strengthen the USD Reserve over time, with the goal of ultimately covering 24 months or more of its dividends,” the company said.
Alongside the launch of the reserve, Strategy disclosed an additional purchase of 130 Bitcoin (BTC) for $11.7 million, bringing its total holdings to a symbolic value of 650,000 BTC, acquired for $48.38 billion.
According to the Strategy’s company update on Monday, its US dollar reserve will be the primary source of funding dividends paid to holders of its preferred stocks, debt and common equity.
The update details that the $1.44 billion reserve is 2.2% of Strategy’s enterprise value, 2.8% of equity value and 2.4% of Bitcoin value.
“We believe this improves the quality and attractiveness of our preferreds, debt and common equity,” Strategy said, adding that it raised $1.44 billion in less than nine trading days by selling its common A stock MSTR.
China reaffirms crypto ban after noticing “speculation has resurfaced”
The People’s Bank of China, the country’s central bank, said on Saturday that it will refresh its 2021 crypto crackdown, after claiming that “virtual currency speculation has resurfaced” and noting stablecoins as a particular concern.
“Virtual currencies do not have the same legal status as fiat currencies, lack legal tender status, and should not and cannot be used as currency in the market,” it said after a meeting with 12 other agencies. “Virtual currency-related business activities constitute illegal financial activities.”
The bank added that stablecoins were of particular concern as they can’t meet customer identification and Anti-Money Laundering requirements, “posing a risk of being used for illegal activities.”
The bank said it would “persistently crack down on illegal financial activities” related to crypto to “maintain the stability of the economic and financial order,” and the 13 agencies that attended the meeting said they would “deepen coordination and cooperation” in tracking down crypto users by strengthening information sharing and enhancing monitoring capabilities.