Good morning. Andrew here. The crypto world thought it was on the verge of getting the regulatory framework it has so long desired — but the vote was postponed at the last minute. We break down why. We’re also focused on an escalating battle between President Trump and Wall Street over capping credit card interest rates. And make sure to take our quiz today about the wave of millionaires being minted in Silicon Valley. (Was this newsletter forwarded to you? Sign up here.)
Crypto setbackBitcoin investors are accustomed to market volatility. But what about regulatory uncertainty? In a surprise move, Senator Tim Scott, Republican of South Carolina and chair of the Senate Banking Committee, postponed a vote scheduled for today on a draft bill that would establish a regulatory framework for cryptocurrencies. Among the opponents of the bill: Coinbase, the big and politically influential crypto exchange. “After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can’t support the bill as written,” Brian Armstrong, the company’s C.E.O., wrote on X, drawing both support and criticism. A recap: The legislation, known as the Clarity Act, would determine regulatory authority over crypto between the S.E.C. to the less-aggressive Commodity Futures Trading Commission. Crypto executives, who have become major political donors, have pushed for significantly lighter oversight. The measure once had bipartisan support. But Senate Democrats have pushed for ethics rules limiting U.S. officials from “issuing, endorsing or profiting” from crypto — an attempt to restrict the Trump family’s growing financial ties to the industry. Then Armstrong raised his objections. The Coinbase C.E.O. argues that the current version would:
The future of stablecoins, a fast-growing segment of digital finance, has become a major sticking point. Issuers of those tokens, including Circle, want a legal framework that will let them pay interest on those assets, as banks do with many deposit accounts, to attract more customers. That would also be a big deal for Coinbase, which offers some customers who hold Circle’s USDC token the chance to earn 3.5 percent in “rewards.” Banks have stepped up their lobbying efforts in recent days as well. They’ve pushed back on blessing stablecoin rewards programs, which Armstrong suggested was an effort by traditional lenders to “ban their competition.” What’s next? Bitcoin was trading around $96,800 this morning, but it has declined from the two-month high it reached yesterday. It’s unclear what the next steps are for the Clarity Act. But Senator Cynthia Lummis, Republican of Wyoming and an avowedly pro-crypto member of the banking committee, bemoaned the bill’s forestalling in a statement. She added that the recent “response from some in the industry proves they just are not ready” for legislation to help the sector.
President Trump says he has no plan to fire Jay Powell, for now. Trump, when asked by Reuters whether he would seek to remove the Fed chair amid a federal criminal investigation, said, “I don’t have any plan to do that.” But he added, “It’s too soon.” Separately, Stephen Miran, a Fed governor and onetime Trump economic adviser, chided central bankers who defended Powell. Goldman Sachs and Morgan Stanley report bumper results. A rise in investment banking revenue helped bolster both Wall Street giants’ bottom lines: Goldman reported $4.38 billion in quarterly profit attributable to shareholders, while Morgan Stanley disclosed $4.4 billion in net income. Both firms also benefited from strong trading results. Grok is no longer allowed to digitally undress people. Elon Musk’s xAI said last night that it would no longer let the chatbot create certain sexualized images, after weeks of uproar over users applying the feature to pictures of women and children. Musk said on X that Grok would “refuse to produce anything illegal.” Some advocacy groups have called on Apple and Google to bar Grok and the X social network from their app stores. C.E.O.s’ Trump two-stepLenders face one of the biggest challenges to their business from Washington in some time, in the form of President Trump’s proposed 10 percent cap on credit card interest rates. Yet their leaders have offered only carefully worded pushback. The cautious response underscores the dilemma corporate America faces during the second Trump administration. How can C.E.O.s defend their interests when the president is so active in regulating private enterprise and has taken shots at those who disagree? Consider what bank executives have said so far about a proposed credit card rate cap, a move that many analysts and academics say could whack a big part of their business:
None weighed in on the federal criminal investigation into Jay Powell, the Fed chair, a move that economists, former Fed chiefs and others said could imperil the central bank’s political independence, with potentially serious economic consequences. Jamie Dimon, the C.E.O. of JPMorgan Chase, may have illustrated why not to when he defended the Fed — and got a quick rebuke from Trump. (Darren Woods of Exxon Mobil drew Trump’s ire for a separate matter, after Woods expressed concern about investing in Venezuela.) It shows the perils of C.E.O.s putting their heads above the parapet, even for powerful leaders like Dimon who have Trump’s ear. Many C.E.O.s are struggling just to get access to the administration while also seeking to express disagreement over policy, according to The Wall Street Journal. That appears to have influenced an approach of staying largely quiet, at least publicly, per the outlet: Some C.E.O. members of the Business Roundtable and the trade group’s leader, Joshua Bolten, last year informally discussed making a statement opposing government equity stakes into companies and government interventionism, according to leaders familiar with the talks. Some of the executives ultimately felt speaking out publicly wouldn’t work and that it could be more effective to have private conversations with Trump or other government officials, the leaders said, who added that private discussions with the administration have taken place. They’re trying other ways as well, Bloomberg notes, including literal golden gifts. C.E.O.s still have their eyes on the prize, The Journal adds. Bank profits have increased amid major deregulation by the Trump administration. Dimon himself has pitched having JPMorgan lead the I.P.O.s of Fannie Mae and Freddie Mac, the housing giants that the Trump administration has weighed taking public. Tremors from IranThe international community is on tenterhooks over Iran. Protests pose a serious threat to the country’s authoritarian clerical rulers, and some fear that the instability and the government’s crackdown could result in U.S. military action. The anxiety can be felt in world markets today. The price of Brent crude, the global benchmark, soared more than 10 percent over the past week, only to plunge yesterday and this morning. That’s after President Trump, who has threatened military action, said he had it “on good authority” that Iran appeared to have stopped killing protesters. All of this has left traders and political leaders gaming out scenarios, including a disruption of global oil supplies and wider regional instability, Vivienne Walt writes. The latest: It was not entirely clear if Trump’s statement meant Washington has taken a military response off the table. (Allies in the region have been lobbying the administration to choose diplomacy instead.) Could unrest in Iran set off a global oil crisis? Iran produces about 3.5 million barrels of oil a day, and sits on the Strait of Hormuz, the waterway through which nearly a quarter of the world’s oil passes. Ayatollah Ali Khamenei, the country’s supreme leader, has vowed to defend Iran. One option traders fear would be trying to close off the Strait of Hormuz to ship traffic. “It would be the biggest oil shock in history,” Matt Gertken, the chief geopolitical strategist for BCA Research, told DealBook. He says that Tehran would explore that route “only if the regime believes they are collapsing and have nothing to lose.” If Iran’s oil exports are completely disrupted, the U.S. could look to regional allies — including Saudi Arabia, the United Arab Emirates and Kuwait — to bolster exports. That would be a true test of Trump’s connections with Gulf monarchs. And beyond? Trade experts and shipping companies could also be on high alert for more attacks on cargo ships. Iran-backed Houthi rebels carried out such moves in the Red Sea in recent years, sending shipping prices higher. DEALBOOK QUIZ A tsunami of new tech millionairesThis question comes from a recent Times article. Click an answer to see if you’re right. (The link will be free.) Despite all of the talk about an A.I. bubble, the past couple of years have been relatively tepid for Silicon Valley when it comes to high-profile moments of wealth creation. The biggest tech start-ups have mostly stayed private. But that may change in 2026, which could feature a slate of supersize initial public offerings. SpaceX (recently valued at $800 billion) and its artificial intelligence rivals OpenAI (recently valued at $500 billion) and Anthropic (currently in talks to raise money at a value of $350 billion) could all go public this year. Each I.P.O. would mint a small army of new millionaires, especially because A.I. companies pay their employees so handsomely in stock. OpenAI, for example, has already granted $80 billion in vested equity and just set aside another $50 billion for employee stock grants. According to an estimate by the research firm Sacra, how many millionaires could be created if SpaceX, OpenAI and Anthropic all have I.P.O.s this year? We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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