The Federal Reserve, OCC, and FDIC issued a joint statement asserting that banks are free to offer crypto “safekeeping” services but should be mindful of the risks involved, such as those associated with cryptographic key management, BSA/AML considerations, and contracting with a third-party. The regulators said in the statement that banks that contemplate providing safekeeping for crypto assets should consider the evolving nature of the crypto market, including the technology underlying the crypto assets. Additionally, firms must implement a risk-governance framework that appropriately adapts to relevant risks.

The Senate Agriculture Committee is scheduled to hold a hearing this afternoon on “Stakeholder Perspectives on Federal Oversight of Digital Commodities.” The Committee will receive testimony from witnesses representing the Crypto Council for Innovation, Georgetown University, Harvard University, the National Futures Association, and the Futures Industry Association.

Reps. Don Davis (D-NC), Josh Gottheimer (D-NJ), and Ritchie Torres (D-NY) sent a letter to their Democratic colleagues pressing them to support the CLARITY Act despite its “shortcomings,” warning that the US cannot “lag behind” on crypto development. They asserted that, "Although this bill is not without its shortcomings and may still be improved, inaction is not a viable option." They argued that the legislation will protect consumers and investors and promote responsible innovation.

House Financial Services Committee Chair French Hill (R-AR) and House Agriculture Committee Chair GT Thompson (R-PA) wrote an op-ed in The Hill advocating for passage of the crypto bills being considered this week. Hill and Thompson asserted that this week is "just the beginning of the journey for digital assets and their role in unlocking American economic growth, global competitiveness and financial opportunity for all. Under President Trump's leadership, and with congressional action, we are finally on track for regulatory clarity, market protection and innovation without fear of government overreach. House Majority Whip Tom Emmer (R-MN) and Rep. Tim Moore (R-NC) also voiced support for the bills in respective interviews with Punchbowl News and Fox Business.

The House is planning to vote Wednesday on crypto market structure legislation and a bill to ban CBDCs, before taking up the Senate-passed GENIUS Act on Thursday. The House is expected to pass the Senate stablecoin bill, which would make it the first major crypto regulatory overhaul ever adopted by Congress. House Republicans opted not to change the stablecoin bill, instead choosing to insert a handful of tweaks into House Financial Services Committee Chair French Hill's (R-AR) market structure measure, the CLARITY Act, which will head to the Senate if it is passed by the House.

The Cyprus Securities and Exchange Commission (CySEC) issued a formal update to CASPs and applicant CASPs regarding new regulatory guidance published by the EBA in June. The EBA opinion addresses the regulatory treatment of EMTs under both MiCA and the existing PSD2 Directive. CySEC encouraged all interested parties to consult the full EBA opinion to review the legal basis and specific advice provided on areas of interplay between MiCA and PSD2.

In an interview with The Times, Bank of England Governor Andrew Bailey warned against banks issuing stablecoins, citing financial stability risks. He also asserted that the UK's central bank should not adopt a CBDC or otherwise seek to launch a centrally-managed digital fiat token.

US District Judge Naomi Reice Buchwald dismissed a proposed class action against Dulce & Gabbana USA, ruling the company's US arm was not responsible for an allegedly failed NFT project that raised over $25 million from investors who were promised exclusive digital and physical merchandise. The judge ruled that the company was not an "alter ego" of its Italy-based parent company, Dolce & Gabbana SRL, which actually operated the DGFamily NFT project.

US District Judge Michael Kaplan approved an agreement from BlockFi and the Justice Department to end a case involving a proposed transfer of more than $35 million in crypto to the government. The lawsuit was originally filed in May 2023 and sought to transfer over $35 million in crypto assets from BlockFi to the US government. DOJ said it had warrants to seize the funds from the BlockFi accounts of two Estonian citizens in a criminal fraud case unrelated to BlockFi's bankruptcy. The company declared bankruptcy in November 2022.