US CLARITY act has interesting provision. This is about reclassification mechanism. It seems US administration is paving path for companies to Tokenize their stock and trade on crypto market rather than stock market. They can also get out of purview of SEC. Not sure what’s the purpose of this and how does this help anyone
„Under the House bill, a publicly traded company like Meta or Tesla could simply decide to put its stock on the blockchain and - poof! - it would escape all SEC regulation,” said Warren
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Summary from Perplexity
The provision of the CLARITY Act that allows what Senator Warren is describing relates to how the Act classifies and regulates tokenized assets. Specifically, under the bill’s current language, assets that are moved onto a blockchain and tokenized could potentially be reclassified from traditional securities (regulated by the SEC) to digital commodities, which fall under the purview of the CFTC or receive much lighter regulation if they meet certain criteria1246.
Key points from the relevant provisions:
The Act creates a category called “investment contract assets”: Tokens or assets that start as securities can later be reclassified as commodities if the underlying blockchain network is deemed “sufficiently decentralized.” This process could allow companies to argue that once their assets are on a mature, decentralized blockchain, they are no longer securities and fall outside full SEC oversight1.
Regulatory split: The Act splits oversight based on how the digital asset is used: if it’s primarily a commodity or utility, the CFTC regulates it; if it’s still functioning as a security, the SEC does135. Critics, including Senator Warren, argue this opens a regulatory loophole.
Loophole concern: Warren’s concern is that a publicly traded company could issue tokenized versions of its stock on a blockchain and, by meeting the Act’s decentralization criteria, those tokens would escape SEC regulation—removing key investor protections and disclosure requirements246.
The Act’s language about allowing tokens or other assets to migrate out of SEC oversight when they’re placed on blockchain networks and treated as “decentralized commodities” is the legal hook Warren highlights as enabling this potential bypass of traditional securities laws126.
This concern is specifically about the reclassification mechanism—not one section of the Act, but rather the combined definitions and regulatory splits for when assets are considered “digital commodities” versus “securities,” and the criteria for a blockchain to be deemed “mature” or “decentralized”13.
Well. I am not saying EU doesn’t have a leverage. US & EU both will suffer in trade war but US is willing to burn down the village & its tough to fight with suicide bombers.
I meant EU doesn’t have choke point. ASML is unique but it mainly ships to Taiwan and Asia. Don’t know how much chips production US have
And let’s not forget EU is not digitally independent. One stroke of pen and EU is shutdown
I think the big problem with ASML is that it doesn’t lead directly to empty shelves, just to lack of expansion. Furthermore, AFAIU ASML is in a bit of a slump right now, and for a lot of US fab capacity not sure how much it really is needed vs. is just US reshoring industrial policy. (of course it being industrial policy with priority does help, but not sure how TSMC stands and Intel doesn’t exactly look like they have money to buy a bunch of machines right now )
Also the US closing down services to the EU is powerful and short term very damaging, but also the strongest impulse to local industry you could give. And people are already increasingly looking in e.g. governments …
Services, there’s a surplus in favor of US and that’s where US makes a ton of money. And there’s no way US would restrict access to US services (that’s suicide for US tech companies the EU market is the only other market where they make large amount of money).
There will never be political support for a trade war. But this are negotiations and Trump does negotiate quiet rational while the EU has apparently not the slightest idea how to negotiate.
Oh boy, I don’t know whether I’ll ever not shiver from Trump-normalizing phrases.*
If you think this further than ‘X wants Y so he bullies Z until he gets Y’ (which sounds rational to some), the rational thing would be to be reliable and predictable. And current administration is IMO neither of that.
And to close the loop to forum-related topics: Neither do most in the market think they are. Basically their actions are just ignored at this point, as everything will change anyway the next day.
*Even though I agree with most of the interview answers otherwise.
“Bullying” as you call it is a negotiation tactic. You build up pressure and just wait what happens… It did not work with China let’s see what happens with Europe.
I assume same as US tariffs, depending on sector some is absorbed by consumers some goes to reducing profit margin, some move to local sourcing (hetzner, OVH, etc).
If they just raise the price they can still lose business (if some companies can’t afford it, they’ll stop paying for it), so it can be rational to absorb the cost through lower margins.
I think cloud providers are a market where the EU could relatively quickly scale up its own options. There are small providers that are currently overshadowed by the big ones (Infomaniak in Switzerland, for example, I have no doubt there are similarily good ones in various EU countries). With the proper incentives, some of them would probably be willing and able to scale up.
He did a prelude with Canada that indicated the negociating target changes with his mood/will at the time.
He took on everybody (but Putin) at once, creating multiple fronts his administration is having trouble to handle while simultaneously encouraging new trade blocks to develop away from the US.
relating to 1: he has shifting targets that make it hard for a country to :
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a - understand what he’s really after in order to put it on the table as a tool of negociation.
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b - consider that any trade agreement will last. You may expend a lot of time and attention to get a deal and the next month, it gets ripped off and you can start again. He also mixes political (think Brazil) and economical targets and what constitutes a political grief for the US president can change depending on the time of day.
He may win a few individual deals but globally, what he’s doing is pushing all other countries, including natural trade partners and legacy allies, away from the US when it comes to trade. Maybe that’s his goal (complete isolationism) in which case, his negociation tactics are indeed cunning.
Ultimately I believe any dip will be smaller than the April one because there’s way more clarity now, and the market has had ages to digest scenarios that may come up.
It’s also politically complacent and lazy. Our leaders in Europe have shown to be very focused in the short-term. If any country has shown to have its head screwed on properly it’s France, in my opinion, other than CH.
I have come to conclusion that there is no way Tariffs won’t be there. These are Trump‘s desire since many decades and he will like them to be fulfilled . But since it’s not a shock anymore, markets are getting used to such news.
However it seems that impact on prices locally is still to be seen. This might not yet be priced in.
But if inflation doesn’t move up in US, then earnings would need to move down (either in US or in other countries). So still a net negative for equities. Though not clear which equities. For global equity investor , it would not matter as they will be impacted anyways.
In my opinion it makes for a mega bull case in a few years’ time, first potential upside in the mid-term elections in the US, and particularly in the next presidential elections. So good time to accumulate at whatever prices we get, as always.
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