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| | After weeks of hype, Donald Trump’s family is rolling out its new cryptocurrency startup. Democrats on Capitol Hill are taking notes. The former president used a prime-time livestream on X on Monday evening to help launch World Liberty Financial, a crypto company that is being led by his sons and real estate investor Steve Witkoff. The venture is a new twist in Trump’s embrace of the crypto world, which he has promised to give a big boost if he's elected in November. Now, House Democrats are signaling they'll take aim at his family's crypto project, which has triggered conflict-of-interest concerns as he's wrapped it into his pro-crypto policy messaging. If Democrats win back the House, they'll have subpoena power next year — an authority they used to target his financial records during his first term. “For those of us who care about preventing money laundering and protecting investors, it is imperative that we apply the highest scrutiny to this most recent Trump family grift,” said Rep. Sean Casten of Illinois, a Democrat on House Financial Services. Trump's potential foes this time around include Reps. Maxine Waters, the top Democrat on Financial Services, and Jamie Raskin, the top Democrat on House Oversight. “The basic problem is that the presidency is not a money-making venture, or it should not be, and Trump from the beginning has regarded it as an extension of his business enterprises,” Raskin told MM last week. “This just multiplies the conflicts of interests and the exposure to more criminal and constitutional problems.” The Trump campaign did not respond to a request for comment. Campaign spokesperson Steven Cheung said last month that ethics watchdog groups that have raised ethics concerns with the project “are led by Democrat donors and partisans who clearly suffer from Trump Derangement Syndrome.” The former president, who spoke in a Q&A at the beginning of the stream, did not address World Liberty, but attacked Vice President Kamala Harris for the Biden administration’s approach to crypto and vowed again to enact industry-friendly policies. “It’s a very hostile environment right now. The SEC has been extremely hostile, and really going after people,” he said. “I view it differently. I just view it that we have to be the top, no matter what we do.” Waters called out the Trump crypto venture for attracting fraud during a recent hearing at the House Financial Services Committee, which she is poised to chair if Republicans lose the House. Other Democrats on the panel are eager to dig in. They say that promising pro-crypto policies as his family launches a digital asset company is unethical. “This makes Clarence Thomas look like Mother Teresa,” said Rep. Brad Sherman, a senior Democrat on the committee. If he wins, the crypto venture would likely become the latest financial services firm to be caught up in congressional oversight of Trump. As committee chairs in 2019, Waters and Rep. Adam Schiff subpoenaed Trump's bank records, sparking a protracted legal standoff over their authority. The comments illustrate the risks Trump is taking by embracing a business venture his sons are launching less than 50 days before the election. It’s opening up new lines of attacks for Democrats who have long sought to paint Trump as corrupt. Trump’s sons rolled out fresh details about the crypto startup during the X livestream late last night. Witkoff said during the virtual event that he helped initiate the project about nine months ago after his son introduced him to the project’s developers — Chase Herro and Zak Folkman — and he initiated a meeting with Trump, Eric Trump and Donald Trump Jr. “What, I think, we’re doing here is really a game-changer,” Trump Jr. said on the livestream. “This is the start, I think, of a financial revolution.” IT’S TUESDAY — Have a tip about Trump’s new crypto venture? Let me know at jgoodman@politico.com. And as always, email Sam at ssutton@politico.com.
| | | | A message from Synchrony: Small and mid-sized businesses, from auto shops to home contractors to veterinarians and more, rely on consumer financing to serve their customers and keep their businesses running. Credit continues to be a critical piece of the American economy. For 100 years, Synchrony has continued to connect tens of millions of people and thousands of businesses to fuel economic growth. Credit is key for businesses and the economy; learn more here. | | | | | | U.S. retail sales data for August will be out at 8:30 a.m. … Georgetown University’s Psaros Center for Financial Markets and Policy Financial Markets Quality Conference kicks off at 9 a.m. Featured speakers include CFTC Chair Rostin Behnam, House Financial Services Chair Patrick McHenry (R-N.C.), Sen. Cynthia Lummis (R-Wyo.) and JPMorgan Chase CEO Jamie Dimon … The FDIC will meet at 10 a.m. to consider a proposed rulemaking on custodial deposit accounts and guidance on bank merger policy … Senate Banking has a hearing on the student loan servicing market at 2:30 p.m. … TODAY: POLITICO’s AI & TECH SUMMIT: American Leadership, Security and Democracy — Join us today, from 12 p.m. ET, for exclusive conversations on U.S. global competitiveness, election security, AI rulemaking, TikTok-era campaigning, and what policies to expect from a Harris or Trump administration. Keynote guests include Homeland Security Secretary Alejandro Mayorkas, National Economic Adviser Lael Brainard, billionaire philanthropist Frank McCourt, Divergent CEO Kevin Czinger and Cohere CEO Aidan Gomez, Congress’s AI rule-writers Sen. Mike Rounds (R-S.D.) and Rep. Jay Obernolte, (R-Calif.), Deputy Attorney General Lisa Monaco, Biden’s chief science and tech advisor Arati Prabhakar, CISA’s election security adviser Cait Conley, Scale AI’s Michael Kratsios, Lindsey Schuh Cortes, CEO, TargetSmart, and former CTO of the DNC, and more. RSVP required to attend or watch here. The Fed’s election dilemma — Our Victoria Guida’s latest Capital Letter column looks at why Federal Reserve Chair Jerome Powell can’t escape having to worry about this year’s election results. She writes that it’s “harder to answer the question of what will happen to the economy without some sense of who might occupy the Oval Office, and who will control Congress, come January. And while Powell has made clear that the central bank doesn’t make policy based on politicians’ campaign promises, the outcome of an election is another data point — more lasting than this month’s jobs numbers or inflation report — that provides a signal of where the country is headed. “Ultimately, the Fed’s decision is about risk management. Powell can’t predict the future, so he has to make a judgment both on what he sees as the likeliest economic outcome and what might give the central bank more flexibility to react in a range of different outcomes.” Pressure’s on — Federal Reserve policymakers are debating if they should slash interest rates by as much as half a percentage point. Some of Kamala Harris’s biggest allies on the Hill want Fed Chair Jerome Powell to go even bigger. In a letter, Democratic Sens. Elizabeth Warren (D-Mass.), John Hickenlooper (D-Colo.) and Sheldon Whitehouse (D-R.I.) urged the Fed chair to reduce borrowing costs by three-quarters of a percentage point. “If the Fed is too cautious in cutting rates, it would needlessly risk our economy heading towards a recession,” they wrote. First in MM: Steady as she goes — Treasury Undersecretary for Domestic Finance Nellie Liang’s speech at the Psaros Center’s conference today will make a case that Treasury market reforms implemented by the Biden administration in response to March 2020 volatility have worked. “Our indicators suggest continued robust demand for Treasury securities and the market remains the deepest and most liquid market in the world,” she’ll say, according to a copy of her remarks shared with MM. “For the past few years, Treasury and the financial regulators, consulting with industry, have made important changes to the market infrastructure, and I believe have made the Treasury market more transparent and more resilient, even as some work remains. Of course, markets will continue to evolve with new technologies and innovations, and regulators will need to keep abreast of changes, as always.” Vance, Walz to face top CEOs — Ohio Sen. JD Vance and Minnesota Gov. Tim Walz are both expected to address the Business Roundtable this week, our Hailey Fuchs scoops. Donald Trump spoke to the group earlier this year. The Roundtable initially invited Vice President Kamala Harris to speak at the quarterly meeting, according to a person familiar with the arrangements, granted anonymity to discuss private planning. But the campaign elected to send her running mate instead.
| | | First in POLITICO: Senators float derivatives for small business — Senate Small Business Chair Jeanne Shaheen and Sen. Bill Cassidy plan to introduce a bill today that would encourage small businesses to buy financial derivatives contracts to hedge the costs of energy and other commodities, our Zach Warmbrodt scoops. The bill would require the SBA to set up a program to facilitate the effort, which would allow employers to purchase futures contracts tied to the prices of physical commodities including gasoline and diesel. “Small businesses are the backbone of our economy and deserve a level playing field," Shaheen said in a statement. "By empowering them to lock in prices for key commodities, we can help small businesses compete with larger businesses, create good-paying jobs and expand their business." First in MM: Anti-ESG bills draw opposition — A coalition of left-leaning climate, financial reform and other groups penned a letter to congressional leaders Tuesday opposing a slate of bills aimed at pushing investors away from investment practices that consider environmental, social and governance — or ESG — issues. The letter, led by Americans for Financial Reform, said Republicans’ anti-ESG campaign “seeks to both force financial actors to ignore a slew of financial risks to the detriment of workers’ retirement security and the integrity of our financial system, and weaken tools of corporate accountability.” The ESG legislation is expected to receive a vote on the House floor this week. A new anti-ESG attack — House Financial Services Chair Patrick McHenry (R-N.C.) and Rep. Andy Barr (R-Ky.) are asking the Government Accountability Office to evaluate federal banking agencies’ involvement in global efforts to green the finance sector, our Jordan Wolman reports. They took aim at banking regulators’ engagement with the Network for Greening the Financial System.
| | | | A message from Synchrony:   | | | | | Former Harris adviser rejoins BlackRock — From our Sam Sutton: Former Kamala Harris aide Mike Pyle is rejoining the asset management firm BlackRock as deputy head of the investment behemoth’s $3.2 trillion portfolio management group. Pyle has been advising Harris's presidential campaign since this summer when President Joe Biden decided to step down from the top of the Democratic ticket.
| | | CBDC Update — There are now 134 countries exploring a central bank digital currency, or CBDC, according to The Atlantic Council’s CBDC Tracker. Within the G20, 19 countries are now in an “advanced stage” of CBDC development. The U.S. is participating in Project Agora, a cross-border wholesale project, alongside the Bank of France, Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank and the Bank of England.
| | | | A message from Synchrony: Access to credit creates a positive ripple effect for the U.S. economy. Small and mid-sized businesses, from auto shops to home contractors to dentists and veterinarians and more, rely on consumer financing to better serve their customers. Credit helps consumers manage their spend and pay over time, leading to higher customer satisfaction and loyalty.
Credit continues to be a critical piece of the American economy. For nearly 100 years, Synchrony has offered flexible financing for consumers, which in turn, helps business owners sustain and grow their businesses.
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