Today in crypto: Galaxy Digital said the latest draft crypto market structure bill would give the US Treasury new powers to freeze transactions and deploy Patriot Act–style measures, corporate crypto accumulation has outpaced Bitcoin mining production by three times over since July, and JPMorgan executives warned that some stablecoin designs could threaten the regulated banking system.
Galaxy says Senate crypto bill risks expanding Treasury surveillance authority
Galaxy Digital warned that a draft crypto market structure bill released by the US Senate Banking Committee would hand the Treasury Department sweeping new surveillance and enforcement tools, describing it as the biggest expansion of financial oversight authority since the US Patriot Act.
In a research note published Tuesday, Galaxy said the Senate proposal goes far beyond the House-passed CLARITY Act, particularly on illicit finance provisions. At the center of Galaxy’s warning is a new crypto-specific “special measures” authority.
The authority would allow the Treasury to designate foreign jurisdictions, financial institutions or entire classes of digital asset transactions as primary money-laundering concerns, giving it the power to restrict or condition certain crypto fund transfers. Galaxy compared this to tools created under the Patriot Act, noting that it could be applied broadly across offshore venues and transaction rails.
The Patriot Act is a law passed after the 9/11 attacks to enhance national security by expanding government surveillance powers, giving law enforcement new tools like easier wiretapping and tracking digital communications to combat terrorism. The law has faced significant controversy over civil liberties.
Crypto treasury buying outpaces Bitcoin supply at 3-to-1
Corporate digital asset treasuries (DATs) added a net 260,000 Bitcoin to their balance sheets over the past six months, far outpacing the estimated 82,000 coins mined over the same period.
Over the past six months, Bitcoin treasuries held by public and private companies have increased from approximately 854,000 BTC to 1.11 million BTC, on-chain analytics provider Glassnode reported on Tuesday.
This equates to an expansion of around 260,000 BTC, worth roughly $25 billion at current market prices, or 43,000 BTC per month.
Bitcoin miners, which produce on average 450 BTC per day, mined around 82,000 coins over the same period, which could indicate a favorable supply-demand dynamic at play.
Yield-bearing stablecoins risk “dangerous” parallel banking system: JPMorgan CFO
Stablecoins emerged as a topic during JPMorgan Chase’s fourth-quarter earnings call on Tuesday, with executives expressing support for blockchain technology while warning that certain stablecoin designs could threaten the regulated banking system.
The comments came in response to a question from Evercore analyst Glenn Schorr, who asked about stablecoins in light of recent industry lobbying by the American Bankers Association and ongoing congressional markups related to digital asset legislation.
Responding to the question, JPMorgan chief financial officer Jeremy Barnum said the bank’s position aligns with the intent of the GENIUS Act, which seeks to establish guardrails around stablecoin issuance.
Barnum warned against the use of interest-bearing stablecoins that replicate traditional banking without the equivalent oversight.
“The creation of a parallel banking system that sort of has all the features of banking, including something that looks a lot like a deposit that pays interest, without the associated prudential safeguards that have been developed over hundreds of years of bank regulation, is an obviously dangerous and undesirable thing,” he said.
Barnum added that while JPMorgan welcomes competition and innovation, it remains firmly opposed to the emergence of a parallel banking system operating outside established regulatory protections.
As Cointelegraph reported last May, the US banking lobby views yield-bearing stablecoins as a major disruption to its business model, with one industry insider describing the response as a full-blown “panic.” The concern is not without merit.
Stablecoins have grown rapidly as tools for payments, onchain settlement and dollar access, offering faster transactions and lower costs. The prospect of yield-bearing versions only sharpens the threat, particularly as banks continue to offer depositors relatively modest interest rates.
