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    The Rise of the Crypto Mayors

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    This new political breed accepts paychecks in Bitcoin. The mayors also want to use buzzy new tech like NFTs to raise money for public projects.Scott Conger, the mayor of Jackson, Tenn., campaigned on a modest promise to improve local infrastructure. He planned to build sidewalks, open a senior center and repair the aging storm-water disposal system in his city of 68,000, about halfway between Nashville and Memphis.But as he begins his fourth year in office, Mr. Conger, 38, has adopted a new favorite cause: cryptocurrencies. He has pledged to give city employees the option of converting their paychecks into Bitcoin and has outlined plans to install a digital mining network in a deserted wing of City Hall. The aim, he said, is to make Jackson a Southeastern tech center.Like many Americans, Mr. Conger discovered crypto during the pandemic and soon fell down an internet rabbit hole. His plans have turned him into something of a celebrity in the crypto world, a strange distinction for the leader of a midsize industrial hub where Pringles potato chips are manufactured.“Bitcoin is a great financial equalizer,” Mr. Conger declared this month in an interview at City Hall. “It’s a hedge against inflation. It can bridge that wealth gap.”The ballooning popularity of Bitcoin and other digital currencies has given rise to a strange new political breed: the crypto mayor. Eric Adams, New York’s new mayor, accepted his first paycheck in Bitcoin and another cryptocurrency, Ether. Francis Suarez, Miami’s mayor, headlines crypto conferences. Now even mayors of smaller towns are trying to incorporate crypto into municipal government, courting start-ups and experimenting with buzzy new technologies like nonfungible tokens, or NFTs, to raise money for public projects.Their growing ranks reflect the increasing mainstream acceptance of digital currencies, which are highly volatile and have fallen in value in recent days. The mayors’ embrace of crypto is also a recognition that its underlying blockchain technology — essentially a distributed ledger system — may create new revenue streams for cities and reshape some basic functions of local government.“Mayors rationally want to attract high-income citizens who pay their taxes and impose few costs on the municipality,” said Joseph Grundfest, a business professor at Stanford. “Crypto geeks fit this bill perfectly.”But as with many ambitious crypto projects, it’s unclear whether these local initiatives will ultimately amount to much. So far, most are either largely symbolic or largely theoretical. And the mayors’ aims are partly political: Crypto boosterism has a useful bipartisan appeal, garnering popularity among both antigovernment conservatives and socially liberal tech moguls.Mr. Conger has outlined plans to install a digital mining network in a deserted wing of Jackson’s City Hall.Houston Cofield for The New York Times“You can do these things because you want to be associated with dudes with AR-15s, or you want to be associated with Meta,” said Finn Brunton, a technology studies professor at the University of California, Davis, who wrote a 2019 book about the history of crypto. “A lot of it is hype and hot air.”In Jackson, Mr. Conger has become a frequent guest on crypto podcasts, where he is hailed as a leader in “the army of Satoshi,” a reference to Bitcoin’s shadowy founder, Satoshi Nakamoto. A broad-shouldered former college football player, Mr. Conger sometimes goes to work wearing socks emblazoned with tiny orange Bitcoins.But his crypto ambitions have already encountered obstacles. While he’s close to establishing a system for city employees to invest a portion of their paychecks in Bitcoin, his mining proposal has proved impossible to institute under existing laws.Mr. Conger wants to use public money to plug a bank of computers into the Bitcoin network, an energy-guzzling process that could generate new coins for the city. He has even found a place to put the hardware: a suite of rooms in City Hall that have remained unfinished since the building opened in 1998. But a state law limits the types of assets that cities can invest in, partly to protect residents from market volatility. Mr. Conger and other local officials are working on new legislation to add Bitcoin to the list of permissible investments.In many ways, Mr. Conger is following in the footsteps of Miami’s Mr. Suarez, who has emerged as the crypto-bro-in-chief of mayors. (The two men occasionally text; Mr. Conger’s communications director calls it a “Bitcoin bromance.”) Mr. Suarez has positioned Miami as a “crypto capital” and thrown his support behind MiamiCoin, a crypto token that anyone can buy or mine, with a portion of the proceeds flowing into city coffers. He recently jousted on Twitter with Mr. Adams of New York over which of them loves crypto more.“Every time I would talk about crypto, my analytics would go through the roof,” Mr. Suarez, 44, said in an interview. “The analytics went crazy.”Mr. Suarez now styles himself as a kind of crypto diplomat. After taking over this month as president of the U.S. Conference of Mayors, a nonpartisan coalition of city mayors, he urged members to sign a “crypto compact” calling on the federal government to eschew overly aggressive regulation of the industry.Last month, Mr. Suarez had a private Zoom call with Gary Gensler, chairman of the Securities and Exchange Commission, who has called for increased scrutiny of crypto.“It was kind of funny,” Mr. Suarez said. “He said, ‘I think I should have done a little bit more homework.’ It was his own way of saying that I really knew what I was talking about.” (The S.E.C. declined to comment.)Mr. Conger said he wanted to make Jackson a place where his children would be comfortable settling down after college.Houston Cofield for The New York TimesMr. Suarez’s vice chair at the Conference of Mayors is a fellow crypto enthusiast, Hillary Schieve, who’s in her second term as the mayor of Reno, Nev. Last year, she announced plans to turn a popular whale sculpture in downtown Reno into an NFT, a unique digital item that can be traded by crypto investors. The goal, Ms. Schieve said, was to funnel the profits into Reno’s arts scene.“It would be great to cut out the middleman,” Ms. Schieve said of her embrace of crypto. “I’m not a big fan of banks.”A Guide to CryptocurrencyCard 1 of 7A glossary. More

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    Why Washington Worries About Stablecoins

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    Stablecoins might be the most ironically named innovation of the cryptocurrency era, at least in the eyes of many Washington regulators and policymakers.These digital currencies promise to maintain their value, which is generally pegged to a government currency like the dollar or euro, by relying on stable financial backing like bank reserves and short-term debt. They are exploding in popularity because they are a practical and cheap way to transact in cryptocurrency. Stablecoins have moved from virtual nonexistence to a more than $120 billion market in a few short years, with the bulk of that growth in the past 12 months.But many are built more like slightly risky investments than like the dollars-and-cents cash money they claim to be. And so far, they are slipping through regulatory cracks.The rush to oversee stablecoins — and the industry’s lobbying push to either avoid regulation or get on its profitable side — might be the most important conversation in Washington financial circles this year. How officials handle sticky questions about a relatively new phenomenon will set the precedent for a technology that is likely to last and grow, effectively writing the first draft of a rule book that will govern the future of money.The debate over how to treat stablecoins is also inescapably intertwined with another hot conversation: whether the Federal Reserve ought to offer its own digital currency. A Fed offering could compete with private-sector stablecoins, depending on its features, and the industry is already bracing for the possibility.Below is a rundown of what stablecoins are, why they may be risky, the possible regulatory solutions and the government’s likely next moves when it comes to policing them.What is a stablecoin?A stablecoin — stablevalue coin, if you’re feeling proper — is a type of cryptocurrency that is typically pegged to an existing government-backed currency. To promise holders that every $1 they put in will remain worth $1, stablecoins hold a bundle of assets in reserve, usually short-term securities such as cash, government debt or commercial paper.Stablecoins are useful because they allow people to transact more seamlessly in cryptocurrencies that function as investments, such as Bitcoin. They form a bridge between old-world money and new-world crypto.But many stablecoins are backed by types of short-term debt that are prone to bouts of illiquidity, meaning that they can become hard or impossible to trade during times of trouble. Despite that somewhat shaky backing, the stablecoins themselves promise to function like perfectly safe holdings.That makes them the type of financial product “macroeconomic disasters usually come from,” said Morgan Ricks, a professor at Vanderbilt University Law School and former policy adviser at the Treasury Department. “The stakes are really, really high here.”That said, some people — including George Selgin, director of the Center for Monetary and Financial Alternatives at the Cato Institute — argue that because stablecoins are used as a niche currency and not as an investment, they may be less prone to runs in which investors try to withdraw their funds all at once. Even if their backing comes into question, people will not want the potential taxes and paperwork that come with changing stablecoins into actual dollars.Given that the technology is so nascent, it is hard to know who is correct. But regulators are worried that they may find out the hard way.Are they all equally risky?Stablecoins are not all created equal. The largest stablecoin, Tether, says it is roughly half invested in a type of short-term corporate debt called commercial paper, based on its recent disclosures. The commercial paper market melted down in March 2020, forcing the Fed to step in to fix things. If those types of vulnerabilities strike again, it could be difficult for Tether to quickly convert its holdings into cash to meet withdrawals.Other stablecoins claim different backing, giving them different risks. But there are big questions about whether stablecoins actually hold the reserves that they claim.The company Circle had said its U.S.D. Coin, or U.S.D.C., was backed 1:1 by cashlike holdings — but then it disclosed in July that 40 percent of its holdings were actually in U.S. Treasurys, certificates of deposit, commercial paper, corporate bonds and municipal debt. A Circle representative said U.S.D.C. will, as of this month, hold all reserves in cash and short-term U.S. government Treasurys.The New York attorney general investigated Tether and Bitfinex, a cryptocurrency exchange, alleging in part that Tether had at one point obscured what the stablecoins had in reserve. The companies’ settlement with the state included a fine and transparency improvements.Tether, in a statement, noted that it has never refused a redemption and that it has amended its disclosures in the wake of the New York attorney general’s investigation. The common thread is that, without standard disclosure or reporting requirements, it is hard to know exactly what is behind a stablecoin, so it is tough to gauge how much risk it entails.It is also difficult to track just how stablecoins are being used.Stablecoins “may facilitate those seeking to sidestep a host of public policy goals connected to our traditional banking and financial system: anti-money-laundering, tax compliance, sanctions and the like,” Gary Gensler, who heads the Securities and Exchange Commission, told Senator Elizabeth Warren in a letter this year.What can regulators do?The trouble with stablecoins is that they slip through the regulatory cracks. They aren’t classified as bank deposits, so the Fed and the Office of the Comptroller of the Currency have limited ability to oversee them. The S.E.C. has some authority if they are defined as securities, but that is a matter of active debate.State-level regulators have managed to exert some oversight, but the fact that significant offerings — including Tether — are based overseas could make it harder for the federal government to exercise authority. Regulators are looking into their options now.What are the government’s next steps?Treasury, the Fed and other financial oversight bodies have a few choices. It’s not obvious what they will choose, but the issue is clearly top-of-mind: The President’s Working Group on Financial Markets, anchored by Treasury, is expected to issue a report on the topic imminently. An upcoming Fed report on central bank digital currencies could also touch on stablecoin risks.A few of the top regulatory options include:Designate them as systemically risky. Because stablecoins are intertwined with other important markets, the Financial Stability Oversight Council could designate them a systemically risky payments system, making them subject to stricter oversight.While the market may not be big enough to count as a systemic risk now, the Dodd Frank Act gives regulators the ability to apply that designation to a payments activity if it appears to be poised to become a threat to the system in the future. If that happened, the Fed or other regulators would then need up to come up with a plan to deal with the risk.Treat them as if they were securities. The government could also label some stablecoins securities, which would bring bigger disclosure requirements. Mr. Gensler told lawmakers during a recent hearing that stablecoins “may well be securities,” which would give his institution broader oversight.Regulate them as if they were money market mutual funds. Many financial experts point out that stablecoins operate much like money market mutual funds, which also act as short-term savings vehicles that offer rapid redemptions while investing in slightly risky assets. But money funds themselves have required two government rescues in a little more than a decade, suggesting their regulation is imperfect.“Stablecoins don’t look new,” said Gregg Gelzinis, who focuses on financial markets and regulation at the Center for American Progress. “I see them either as an unregulated money market mutual fund or an unregulated bank.”Treat them as if they were banks. Given flaws in money fund oversight, many financial regulation enthusiasts would prefer to see stablecoins treated as bank deposits. If that were to happen, the tokens could become subject to oversight by a bank regulator, such as the Office of the Comptroller of Currency, Mr. Gelzinis said. They could also potentially benefit from deposit insurance, which would protect individuals if the company backing the stablecoin went belly up.Try to compete with central bank digital currency. Jerome H. Powell, the Fed chair, has signaled that outcompeting stablecoins could be one appeal of a central bank digital currency — a digital dollar that, like paper money, ties back directly to the Fed.“You wouldn’t need stablecoins, you wouldn’t need cryptocurrencies, if you had a digital U.S. currency. I think that’s one of the stronger arguments in its favor,” Mr. Powell said during testimony this year.But how a central bank digital currency is designed would be critical to whether it succeeded at replacing stablecoins. And industry experts point out that since stablecoin users prioritize privacy and independence from the government, a new form of government-backed currency might do little to supplant them.Cooperate internationally. If there’s one point everyone in the conversation agrees on, it’s that different jurisdictions will need to collaborate to make stablecoin regulation work. Otherwise, coins will be able to move overseas if they face unattractive oversight in a given country.The Financial Stability Board, a global oversight body, is working on establishing stablecoin-related standards and plans for cooperation, aiming for final adoption in 2023. More

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    My Strange Journey in the Crypto World Creating a Hype Coin

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    I created a hype coin to show how risky an investment can be. The coin had other plans.Times Insider explains who we are and what we do, and delivers behind-the-scenes insights into how our journalism comes together.When I conducted a little experiment recently for an article to highlight a corner of the cryptocurrency world, I knew I was creating something that would live on after the piece was published. But what happened still took me by surprise.As a business reporter based in London, I have been riveted in recent months by the booming popularity of so-called hype coins. These are the down-market, volatile cousins of Bitcoin, the graybeard of the cryptocurrency world. There are more than 70,000 of these coins — with names like Klaytn, Chiliz, Helium and others you’ve never heard of — and a few dozen new ones are created each day.On its face, the hype coin phenomenon is one of the most baffling financial crazes in history. At least if you went bust during the tulip mania in the 17th century, you could end up with some tulips. Hype coins have no intrinsic value. But investors and venture capitalists have swooned for them. More than 80 have a market value in excess of $1 billion.To enlighten readers, and myself, I made my own hype coin. I spent about $1,000 of The New York Times’s money — yes, I first cleared this outlay with editors, and we discussed the legal issues of this project with Times lawyers — to create and promote it.I christened it Idiot Coin. The name was just one part of an effort to dissuade anyone from hoping it would “moon,” or soar in value. I wanted this thing to flop, and for very solid legal reasons. Two lawyers who specialize in cryptocurrency law explained to me that hype coins are securities and that anyone who markets one with the intent to get rich could earn some unwanted attention from the Securities and Exchange Commission.I made 21 million Idiot Coins and put seven million up for sale. Here’s where I really tried to sabotage this enterprise. Developers of new crypto will kick-start trading by putting money into a “liquidity pool.” The details here get complicated, but suffice it to say, most coin makers pour about $10,000 into their pools. I put up $30.I had essentially created a car that had two sips of gas, max. The point was to demonstrate how easy it is to make and promote an utterly useless commodity. Then, I would watch that commodity wobble into oblivion. That’s not what happened.After the article was published online, a few dozen people showed up in the Idiot Coin account on Telegram, an encrypted messaging platform. A handful started making very amusing memes. Someone named DragonX posted an image of a wide-eyed toddler, tonguing a window, under the words “Wen [sic] I’m not licking windows I’m buying Idiot Coin!”Others were eager for the coin to earn a fortune. “Let’s get on that idiot moon!” IceMaster0x wrote. It will never moon, I kept replying to would-be boosters. That didn’t stop a few dozen people from snapping up coins, often by the hundreds of thousands.On the morning of Aug. 10, the total market value of the coin stood at about $6,000. By that evening, it had gone up 10 fold. The next afternoon, nearly all of the coins were sold and the market value had reached $108,000. It went down, then to a new high. On Monday afternoon, it stood at $68,000.Selling the coins would probably crater the price. This modest pot could vanish in a few frenzied minutes. But if the increase persists, the money will go to charity.For now, a curious kind of camaraderie has taken shape in the Telegram account for Idiot Coin, with voices and opinions from all around the world. (Shout out to Rusty from Kazakhstan.) “Only buy if you are an Idiot,” reads a meme that keeps getting posted. Some urge stratagems that might cause the coin to appreciate. Others argue that such a notion is way off brand for a currency named Idiot Coin.As I type this, I have no idea what will happen next. What’s certain is that some people will invest in just about any venture, even one designed for failure. More

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    Digital Currency Is a Divided Issue at the Federal Reserve

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    Officials at the Federal Reserve seem to be increasingly divided over whether it ought to issue a digital dollar — a digital currency that traces straight back to the central bank rather than to the private banking sector.Speeches by several Fed officials show they have yet to align on the issue, even as the Fed’s peers in China, parts of Europe and smaller economies like the Bahamas have created digital currencies or are working toward issuing them. The Fed plans to release a report on the potential costs and benefits of a digital dollar this summer.Lael Brainard, a Fed governor appointed during the Obama administration, made it clear during remarks last week that she envisions a future in which America’s central bank explores and issues a digital currency. But Christopher Waller, her colleague on the Fed’s Board of Governors and a Trump nominee, made it equally obvious during a speech on Thursday that he questions whether that is necessary.“The dollar is very dominant in international payments,” Ms. Brainard said during remarks in Aspen, Colo., adding that she could not imagine a situation in which other countries issue digital currencies and the United States doesn’t have one.“I just, I can’t wrap my head around that,” she said. “That just doesn’t sound like a sustainable future to me.”Mr. Waller, by contrast, suggested that there is little a central bank digital offering could do that the private sector cannot and that the potential benefits of a digital dollar are most likely overstated, while the risks are substantial. He added that the United States need not worry about the U.S. dollar’s being supplanted by China’s digital offering.“I am left with the conclusion that a C.B.D.C. remains a solution in search of a problem,” Mr. Waller said on Thursday, referring to a central bank digital currency. He also voiced concerns that a central bank currency would give the Fed too much information about private citizens.Randal K. Quarles, the Fed’s vice chair for supervision, has also sounded dubious about the need for a central bank digital currency, painting the idea as a passing fad. Jerome H. Powell, the Fed chair, has at times questioned whether such an offering is necessary, but he has more recently stressed that it is important to investigate the idea and has called himself “legitimately undecided.”Supporters of central bank digital currency say it is critical for the United States to stay on top of the technology, even if it is not yet clear what benefits such currencies will offer in practice. Some suggest that a Fed digital dollar could prevent stablecoins — private digital assets backed by a bundle of currencies or other assets — from becoming dominant and creating a big financial stability risk.But opponents worry that a central bank digital currency would not offer benefits that the private sector did not or could not provide and that it might introduce cybersecurity vulnerabilities, issues that Mr. Waller raised Thursday.Commercial banks have also pushed back on the idea, worrying that their consumer banking services will be supplanted by Fed accounts and warning that such a situation would cause them to cut back on their lending. Mr. Waller — despite his overall skepticism — sounded unsympathetic to that argument.“There’s a lot of ways that banks could raise funds,” he said, noting that it might hit bank profit margins but that he wouldn’t have an issue with that. “The whole idea is that if they compete, then the funds don’t flow out, so it could be the case that just the existence of a C.B.D.C. causes fees to go down, deposits to go up.” More

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    Cryptocurrency Seeks the Spotlight, With Spike Lee’s Help

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    The filmmaker’s commercial for a crypto company is one of many recent marketing efforts to make digital cash palatable for newbies.Before Spike Lee accepted cryptocurrency, he turned down Crocs.Years ago, the filmmaker rejected an offer to buy into the Colorado company that makes perforated foam clogs, a decision that caused him to miss out when its stock soared on the strength of the footwear fad.“I wish I would’ve given some money back then,” Mr. Lee said in a recent interview. “Anytime something is new, you’re going to have people who are going to be skeptical. With some of the best ideas, people thought the inventors were crazy.”Now he has taken a leap into another cultural craze, having agreed to direct and star in a television commercial for Coin Cloud, a company that makes kiosks for buying and selling Bitcoin and other virtual currencies. Although cryptocurrency is not widely used for transactions, an increasing number of merchants now accept it as payment.The commercial, which he shot last month, is one of several recent marketing efforts meant to broaden the audience for a form of currency that can intimidate people accustomed to cash and credit cards.Mr. Lee, outfitted nattily in a straw hat and gold-tipped cane while filming part of the commercial on Wall Street, led a diverse cast that included his daughter Satchel, the “Pose” actress Mj Rodriguez and the drag queen Shangela. Other shoot locations included Fort Greene Park and the Chillin’ Bar and Grill in Washington Heights, where breakfast patrons craned to catch a glimpse of the director as he filmed a Coin Cloud machine on the sidewalk.“Old money is not going to pick us up; it pushes us down,” Mr. Lee says in the commercial, which portrays the cryptocurrency system as a more accessible and equitable alternative to traditional, discriminatory financial institutions.“The digital rebellion is here,” he says.Cryptocurrency has also been known to intimidate investors, with its extreme volatility and the overwhelming number of virtual alternatives, known as coins. The marketing of this relatively new money has so far been limited mostly to ads on trade websites and targeted pushes on social media, where aficionados swap meme-fueled in-jokes about coin values rocketing to the moon.The industry is increasingly betting that celebrities can help demystify cryptocurrency for the uninitiated.The actor Alec Baldwin offered crisp definitions of cryptocurrency in a series of online ads for the crypto trading platform eToro, and the National Football League star Tom Brady signed on as a brand ambassador for FTX, a crypto exchange that also has a deal to sponsor Major League Baseball.Alec Baldwin is advertising for the cryptocurrency trading platform eToro.eToroThe actor Neil Patrick Harris recently appeared in a TV commercial for the digital currency kiosk operator CoinFlip. “Now anyone, anywhere, can turn cash into crypto!” he declares.EToro and Coinbase, another exchange, collectively spent $22.8 million on advertising last year, nearly double the $12.4 million they shelled out in 2019, according to the research firm Kantar. In recent months, Coinbase hired the Martin Agency, the advertising company behind GEICO and DoorDash.As Madison Avenue fields more inquiries from cryptocurrency clients, agency executives are feeling pressure to better communicate the investment risks, rather than romanticize the industry.“I get very nervous because I start looking at the way that some of the platforms are specifically targeting younger investors,” said Alex Hesz, the chief strategy officer of the advertising giant DDB Worldwide. In the face of frenzied cryptocurrency trading, ad agencies should push for moderation and diversification, he said. “Maximizing is what’s being encouraged here — the idea that this is an amazing asset, and as much as you want to put in, come on and jump on in, the Bitcoin’s lovely,” Mr. Hesz said. “We would never feel comfortable for an alcohol client, or a high-salt or high-sugar or high-fat client, to encourage that level of unequivocal behavior.”Some celebrity endorsements of cryptocurrencies have run into trouble. In 2017, the Securities and Exchange Commission cautioned that some famous people were hyping the virtual currency sales known as initial coin offerings without disclosing that they had been paid to promote them. The commission has since settled charges against the boxer Floyd Mayweather Jr., the music producer DJ Khaled and the actor Steven Seagal.Social media influencers and e-sports stars have also been linked to shady cryptocurrency schemes, accused of pumping up coins just before their value crashes.Coin Cloud’s chief marketing officer, Amondo Redmond, said he hoped Mr. Lee’s stature would help elevate the industry by delivering something “more than just cool creative, but that is really at the forefront of digital currency becoming mainstream.”“It’s more than just adding a celebrity face,” he said.Mr. Lee, who won an Oscar in 2019 in the best adapted screenplay category for “BlacKkKlansman,” has worked on ads for Capital One, Uber and, most famously, Nike. In the 1980s and 1990s, he directed and starred in commercials for Air Jordans, playing his cinematic alter ego Mars Blackmon opposite Michael Jordan.“That was lightning in a bottle,” Mr. Lee said from a flight bound for the Cannes Film Festival, where he is the first Black person to lead the festival jury.He declined to say how much he had been paid for the Coin Cloud commercial, but noted that “if anyone’s known my body of work over the last four decades, you kind of know about the way I see the world, and when they approached me, it fit in line.”As the coronavirus pandemic continues to highlight financial disadvantages for people of color, Mr. Lee hopes to promote cryptocurrency as neutral to race, gender, age and other identifying characteristics.But he was no expert before filming began, and had to take “a crash course” on crypto. He insisted that the commercial include a line urging viewers to do their own research on virtual money.Mr. Lee said he now planned to invest in virtual coins. He said he would not, however, go anywhere near the digital ownership certificates known as nonfungible tokens.“NFTs, I don’t understand that,” he said, laughing. “I’m old school, so sometimes my children have to turn on the TV — all those remotes and stuff.” More

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    Still Getting Your Head Around Digital Currency? So Are Central Bankers.

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    #styln-signup .styln-signup-wrapper { max-width: calc(100% – 40px); width: 600px; margin: 20px auto; padding-bottom: 20px; border-bottom: 1px solid #e2e2e2; } America’s Federal Reserve says it is in no rush to issue a digital currency, but it is coming under intense and increasing pressure to research and understand the design and potential of digital money. From the […] More

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    The Business Rules the Trump Administration Is Racing to Finish

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    #masthead-section-label, #masthead-bar-one { display: none }The Presidential TransitionLatest UpdatesHouse Moves to Remove TrumpHow Impeachment Might WorkBiden Focuses on CrisesCabinet PicksAdvertisementContinue reading the main storySupported byContinue reading the main storyThe Business Rules the Trump Administration Is Racing to FinishFrom tariffs and trade to the status of Uber drivers, regulators are trying to install new rules or reduce regulations before President-elect Joe Biden takes over.President Trump is rushing to put into effect new economic regulations and executive orders before his term comes to a close.Credit…Erin Schaff/The New York TimesJan. 11, 2021, 3:00 a.m. ETIn the remaining days of his administration, President Trump is rushing to put into effect a raft of new regulations and executive orders that are intended to put his stamp on business, trade and the economy.Previous presidents in their final term have used the period between the election and the inauguration to take last-minute actions to extend and seal their agendas. Some of the changes are clearly aimed at making it harder, at least for a time, for the next administration to pursue its goals.Of course, President-elect Joseph R. Biden Jr. could issue new executive orders to overturn Mr. Trump’s. And Democrats in Congress, who will control the House and the Senate, could use the Congressional Review Act to quickly reverse regulatory actions from as far back as late August.Here are some of the things that Mr. Trump and his appointees have done or are trying to do before Mr. Biden’s inauguration on Jan. 20. — Peter EavisProhibiting Chinese apps and other products. Mr. Trump signed an executive order on Tuesday banning transactions with eight Chinese software applications, including Alipay. It was the latest escalation of the president’s economic war with China. Details and the start of the ban will fall to Mr. Biden, who could decide not to follow through on the idea. Separately, the Trump administration has also banned the import of some cotton from the Xinjiang region, where China has detained vast numbers of people who are members of ethnic minorities and forced them to work in fields and factories. In another move, the administration prohibited several Chinese companies, including the chip maker SMIC and the drone maker DJI, from buying American products. The administration is weighing further restrictions on China in its final days, including adding Alibaba and Tencent to a list of companies with ties to the Chinese military, a designation that would prevent Americans from investing in those businesses. — Ana SwansonDefining gig workers as contractors. The Labor Department on Wednesday released the final version of a rule that could classify millions of workers in industries like construction, cleaning and the gig economy as contractors rather than employees, another step toward endorsing the business practices of companies like Uber and Lyft. — Noam ScheiberTrimming social media’s legal shield. The Trump administration recently filed a petition asking the Federal Communications Commission to narrow its interpretation of a powerful legal shield for social media platforms like Facebook and YouTube. If the commission doesn’t act before Inauguration Day, the matter will land in the desk of whomever Mr. Biden picks to lead the agency. — David McCabeTaking the tech giants to court. The Federal Trade Commission filed an antitrust suit against Facebook in December, two months after the Justice Department sued Google. Mr. Biden’s appointees will have to decide how best to move forward with the cases. — David McCabeAdding new cryptocurrency disclosure requirements. The Treasury Department late last month proposed new reporting requirements that it said were intended to prevent money laundering for certain cryptocurrency transactions. It gave only 15 days — over the holidays — for public comment. Lawmakers and digital currency enthusiasts wrote to the Treasury secretary, Steven Mnuchin, to protest and won a short extension. But opponents of the proposed rule say the process and substance are flawed, arguing that the requirement would hinder innovation, and are likely to challenge it in court. — Ephrat LivniLimiting banks on social and environmental issues. The Office of the Comptroller of the Currency is rushing a proposed rule that would ban banks from not lending to certain kinds of businesses, like those in the fossil fuel industry, on environmental or social grounds. The regulator unveiled the proposal on Nov. 20 and limited the time it would accept comments to six weeks despite the interruptions of the holidays. — Emily FlitterOverhauling rules on banks and underserved communities. The Office of the Comptroller of the Currency is also proposing new guidelines on how banks can measure their activities to get credit for fulfilling their obligations under the Community Reinvestment Act, an anti-redlining law that forces them to do business in poor and minority communities. The agency rewrote some of the rules in May, but other regulators — the Federal Reserve and the Federal Deposit Insurance Corporation — did not sign on. — Emily FlitterInsuring “hot money” deposits. On Dec. 15, the F.D.I.C. expanded the eligibility of brokered deposits for insurance coverage. These deposits are infusions of cash into a bank in exchange for a high interest rate, but are known as “hot money” because the clients can move the deposits from bank to bank for higher returns. Critics say the change could put the insurance fund at risk. F.D.I.C. officials said the new rule was needed to “modernize” the brokered deposits system. — Emily FlitterNarrowing regulatory authority over airlines. The Department of Transportation in December authorized a rule, sought by airlines and travel agents, that limits the department’s authority over the industry by defining what constitutes an unfair and deceptive practice. Consumer groups widely opposed the rule. Airlines argued that the rule would limit regulatory overreach. And the department said the definitions it used were in line with its past practice. — Niraj ChokshiRolling back a light bulb rule. The Department of Energy has moved to block a rule that would phase out incandescent light bulbs, which people and businesses have increasingly been replacing with much more efficient LED and compact fluorescent bulbs. The energy secretary, Dan Brouillette, a former auto industry lobbyist, said in December that the Trump administration did not want to limit consumer choice. The rule had been slated to go into effect on Jan. 1 and was required by a law passed in 2007. — Ivan PennAdvertisementContinue reading the main story More