Finance
To Boost Crypto, Break The Federal Grip On Americans’ Financial Rights
Despite the efforts of a few members of Congress, U.S. cryptocurrency policy remains a mess. For years, the Securities and Exchange Commission, most federal banking agencies, and many members of Congress have been outright hostile toward crypto.
But due to several new proposals, many crypto supporters are hopeful this hostility will fade. Over the last few weeks, Sen. Cynthia Lummis (R-WY), former President Donald Trump, and presidential candidate Robert F. Kennedy Jr., all announced proposals for the U.S. to create a bitcoin reserve.
Given the sad current state of U.S. crypto policy, however, it is doubtful these kinds of proposals would get things on track. Still, they provide a great opportunity to have a more fundamental conversation about how to improve crypto policy. To paraphrase my colleague George Selgin, there’s surely a good policy somewhere between the status quo and these reserve proposals.
And it’s vital that Congress finds it.
Crypto enables new forms of digital payments, where users can bypass traditional third-party intermediaries, such as banks and broker-dealers. In other words, it allows for person-to-person electronic transfers of digital assets, including money.
In theory, allowing people to spend money electronically in ways resembling how they’ve been spending cash shouldn’t be controversial, especially in America. Nonetheless, this feature, along with the potentially disruptive nature of crypto, has proven too much for politicians to overcome.
Some people don’t like that crypto is a competitive threat to companies in the traditional payments industry. Others don’t like that it’s a threat to the existing anti-money laundering regime. (That’s an especially big problem because the federal government has drafted traditional financial institutions to act as an extension of law enforcement.) Other critics see bypassing these systems as a threat to the U.S. dollar itself.
The specter of these threats has made it difficult to develop sound cryptocurrency policy, but there are two basic principles—principles that have been foundational to the United States—that can help Congress address these concerns.
The first one relates to the Fourth Amendment to the U.S. Constitution, which protects Americans against warrantless searches and seizures by the government. Thanks to the Bank Secrecy Act and its many amendments, Fourth Amendment protections have been all but eliminated when it comes to Americans’ financial records. The BSA gives law enforcement warrantless access to Americans’ financial records when they use a bank or any other financial institution.
Rather than adapt to the technology, many policymakers want to force crypto to adapt to a system that was designed to work with financial intermediaries. But crypto often upends the traditional role of intermediaries, thus forcing Congress to deal with how it has used those intermediaries to end-run the Fourth Amendment.
Many members of Congress (and the financial industry) now view the Fourth Amendment as a relic, somewhere between overly burdensome and an afterthought, unapplicable to modern America. But the Fourth Amendment was never supposed to be perfect. It represents, instead, the necessarily imperfect balance between the competing interests of individuals’ financial privacy and the government’s ability to gather evidence of a crime.
Reaffirming Americans’ Fourth Amendment rights, as Congress should do, would not be a license to commit crime. It would simply mean that law enforcement must demonstrate probable cause to a judge before accessing Americans’ financial records, just as they do for other searches.
The second principle—limited government—dictates that people, not government officials, are generally the best judges of which economic transactions are in their own best interest. Yet, the federal government now dictates which methods of payments are acceptable, which special institutions may facilitate those payments, and how those institutions may operate. Some members of Congress even want cryptocurrency banned because it doesn’t fit into this government regime.
The principle of limited government also answers the critics who see crypto as a threat to the U.S. dollar. The federal government is not supposed to be the provider of Americans’ money precisely because governments tend to debase currency. The U.S. government is supposed to refrain from debasing people’s money, and to protect people’s right to use money as they see fit. The government is not supposed to control every aspect of how people use their money or even what they use for money.
Critics of crypto assume that the government’s existing monopoly on money issuance maintains the dollar standard itself, but that’s incorrect. The prevalence of the U.S. dollar grew when gold and silver were recognized as money, and it does not depend on a specific type of paper currency or digital entries. The prevalence of the U.S. dollar derives from the country’s relatively strong legal and economic systems, especially as they pertain to protecting individual property rights.
Many advocates of cryptocurrency are frustrated because the federal government has failed to uphold these limited government principles and debased the currency. Americans now have effectively one choice for money, and even the person-to-person transfer of that currency is now highly regulated and surveilled.
So, it makes sense that so many crypto proponents are cheering on these reserve proposals in the hope that they will gain wider acceptance for Bitcoin. Unfortunately, these proposals do not directly address the underlying problems that have kept U.S. crypto policy such a mess.
Cryptocurrency will remain of limited use until Congress pares back the overly invasive regulatory framework that currently governs U.S. financial markets. To do so, Congress need only reaffirm the importance of the Fourth Amendment and a limited government.
Finance
A new blueprint for financing community development – Part III
Hegseth, a Fox News host who served in the Army National Guard, was named by President-elect Donald Trump on November 12 as his pick for defense secretary. Since then, Hegseth has been the subject of a number of allegations of sexual misconduct, alcohol abuse and financial mismanagement. The most recent spate of news stories have detailed allegations, which Hegseth has denied, related to excessive alcohol consumption and appear to be the main topic of concern on Capitol Hill.
“It’s just been very troubling to see how unconcerned many members of Congress are with men who are accused of sexual assault,” said Rep. Veronica Escobar of Texas, a member of the House Armed Services Committee. While the House does not vote to confirm Cabinet nominees, Hegseth met with Republican House members on Wednesday to shore up support.
“The issue that apparently, I heard, came up in his meetings was his alleged alcohol abuse,” she said. “But I guess his abuse of women doesn’t seem to bother as many folks.”
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Credible allegations of impropriety have often been cause for withdrawal or disqualification. Hegseth is one of a number of Trump’s Cabinet-level nominees who face accusations of sexual misconduct.
In 2020, Hegseth paid a confidential settlement to a woman who filed a police report accusing him of raping her in 2017 at a Republican women’s conference in Monterey, California. No charges were filed against Hegseth in connection with the encounter, which he and his lawyer maintain was consensual. The New Yorker and other outlets have reported on additional allegations that Hegseth mismanaged funds and abused alcohol while leading two veteran-focused nonprofits, and that his colleagues at Fox News witnessed him drinking to excess while he was a weekend co-host at “Fox and Friends.” Hegseth has strenuously denied those claims, including in an op-ed published in the Wall Street Journal, and told Megyn Kelly in an interview on her SiriusXM show that he wouldn’t drink alcohol as defense secretary.
Representatives for Fox News and the Trump transition did not immediately return requests for comment. Several of Hegseth’s current and former Fox News colleagues, including current “Fox & Friends Weekends” co-host Will Cain, have spoken up in his defense.
“The press is peddling anonymous story after anonymous story, all meant to smear me and tear me down. It’s a textbook manufactured media takedown,” Hegseth wrote in the Journal. “They provide no evidence, no names, and they ignore the legions of people who speak on my behalf. They need to create a bogeyman, because they believe I threaten their institutional insanity. That is the only thing they are right about.”
Democratic women serving on the House and Senate Armed Services Committees argued that Hegseth getting confirmed would not only undercut years-long bipartisan efforts in Congress to address sexual assault and abuse in the military but also the armed services’ efforts to recruit more women.
“This is very concerning,” said Escobar, a Democrat. “We have been trying to address recruitment for a long time, and women are a key component of that. This is the last thing we needed, and it is my hope that those members of the Senate who are committed to these reforms and who know how important women are in the military will have very candid conversations with him, and he will drop out.”
Nearly 1 in 4 women in the military report having experienced sexual assault and more than half report harassment, according to a 2016 analysis of articles published in the peer-reviewed journal Trauma, Violence and Abuse. The vast majority of incidents go unreported, according to the RAND Corporation, which provides research to the U.S. Armed Forces. In 2018 alone, about 6,000 sexual assaults were reported to the Department of Defense, but surveys suggested more than 20,000 service members were sexually assaulted. And amid a broader military recruitment crisis, a 2020 government study found that women were leaving the military at higher rates than men and citing sexual assault as a major factor.
Michelle Simpson Tuegel, a Texas-based lawyer who does not practice in the military justice system but has represented survivors in several high-profile sex abuse cases, said Hegseth’s nomination marks “a scary moment” for women service members.
“I get calls every year from women who have faced sexual assault and sexual harassment in the military, I’ve represented people on the bases when I used to do criminal defense,” Tuegel said. “There’s a lot of violence on our military bases.”
Reports of sexual assault in the military have risen by an estimated 25 percent since 2018, according to the military’s own data, which include both anonymous surveys and formal reports.
Military justice reform advocates have gained ground in recent years, particularly in regards to how military sexual assault and harassment investigations are handled. After the end of World War II, one Supreme Court ruling — known as the Feres doctrine — barred service members from suing the government over any injuries incurred while on active duty. Though typically applied to cases of medical malpractice, this ruling had expanded to include sexual assault allegations. However, the high-profile murder in 2020 of Vanessa Guillén, a soldier who was sexually harassed by a supervisor and violently murdered while stationed at Fort Hood, Texas, acted as a catalyst for reform. Guillén’s death led to major changes in the National Defense Authorization Act, guaranteeing that certain crimes like sexual assault and domestic violence would be prosecuted outside the chain of command.
Democratic Sen. Tammy Duckworth of Illinois, a veteran, called it “insane” that Trump would nominate someone like Hegseth after the “decades” of efforts within the Armed Services.
“There are simply too many reasons proving that Pete Hegseth is not the right person to lead our military men and women, and he will not have my vote,” she said in a statement to The 19th. “Republicans confirming him to this position wouldn’t just be an insult to our men and women in uniform—it would be dangerous for our national security and military readiness.”
Rep. Mikie Sherrill of New Jersey was a student at the Naval Academy 30 years ago as part of the first class of women eligible for combat ships. She served for nearly a decade, including a stint in London when she worked for a Navy fleet commander overseeing the deployment of troops to Iraq, at a time when she said the culture was not great for women.
When young women interested in the service academies come to her office, Sherrill said, “they’re not interested in going into a force as second-class citizens, and they’re not interested in being given special treatment.”
“What they want is the challenge that all people that go into our military service want. What they want to do is to serve the public, to protect and defend the Constitution of the United States and to make sure that people here can sleep at night,” said Sherrill, who is also running for governor of New Jersey. “And so, why you would ever put someone in charge that didn’t respect that, that didn’t respect the service of about 20 percent of our armed forces, is shocking to me.”
The implications stretch beyond the ranks of the Armed Forces, said Democratic Rep. Chrissy Houlahan of Pennsylvania, who served in the Air Force and Air Force Reserve. Changes that enabled women like her, Sherrill and others to serve in the military put them on the path to public service in Congress, she said.
“They served because we made some real reforms that mattered in how women are able to serve and what kind of roles they’re able to serve in,” Houlahan said. “And I think it’s not a coincidence that you then see those people, decades later, showing up in places like Congress, because they’ve had equal opportunity.”
The U.S. Senate vets and confirms the president’s nominees to Cabinet posts and other high-level positions. In some ways, Hegseth’s nomination and the scandal surrounding it are not new. The first time a new president’s initial Cabinet nominee was rejected was in 1989 when the Senate failed to confirm John Tower, former President George H.W. Bush’s pick for defense secretary, after he was accused of being an alcoholic womanizer.
Then Sen. Sam Nunn, a Democrat and Senate Armed Services Committee Chairman at the time, led the charge against Tower’s nomination on the grounds that his character was unfit for the position.
“The committee is also concerned about the personal example the secretary of defense must set for efforts of the Department of Defense to end discrimination toward, and any sexual harassment of, women. … Mr. President, leadership must be established from the top down,” Nunn said during the 1989 Senate debate.
Secretary of Defense Lloyd J. Austin III, who was appointed by President Joe Biden, has made it a priority of his tenure to combat sexual assault in the military, establishing a commission early on to make recommendations to the military. Meanwhile, Hegseth has signaled a different set of values and priorities when it comes to women and people of color. He wrote a book arguing that military standards have been lowered for women, that “America’s white sons and daughters” are walking away from the military because of ideology that is too “effeminate” and that diversity, inclusion and equity efforts are bad for national security.
“I’m straight up just saying we shouldn’t have women in combat roles,” Hegseth said in November during a podcast interview. “It hasn’t made us more effective. It hasn’t made us more lethal. It has made fighting more complicated.”
On Wednesday, Hegseth mounted another lobbying blitz on Capitol Hill, meeting with several key Republican senators. GOP Sen. Joni Ernst of Iowa, an Army veteran and a sexual assault survivor herself who has been outspoken against sexual assault in the military, posted on X that she had a “frank and thorough” conversation with Hegseth.
His mother, Penelope Hegseth, is also doing a media tour on behalf of her son after The New York Times reported on an email she sent him in 2018, in the midst of his contentious divorce from his second wife, excoriating Hegseth as an “abuser of women.” It is against military law to commit adultery, which could result in dishonorable discharge. Penelope Hegseth, who said she since apologized for and disavowed the contents of the email, took to Fox News with her hopes that lawmakers, “especially our female senators,” to “not listen to the media and that you will listen to Pete.”
Houlahan said she’s using the influence she has as a woman veteran in Congress to register her concerns with her colleagues in the Senate about Hegseth’s nomination.
“To the degree I can, I’m trying to have conversations, and directly have conversations with my Senate companions, to do my best to explain that I am really worried about this,” she said. “And I’m hoping that me being really worried is an indicator, a canary in the coal mine, of other people who are worried about it, who don’t have the voice that I have.”
Finance
Accelerating AI for financial services: Innovation at scale with NVIDIA and Microsoft
Always on the cusp of technology innovation, the financial services industry (FSI) is once again poised for wholesale transformation, this time with Generative AI. Yet the complexity of what’s required highlights the need for partnerships and platforms calibrated to fast-track solutions at scale to capitalize on AI-era change.
Financial institutions have an unprecedented opportunity to leverage AI/GenAI to expand services, drive massive productivity gains, mitigate risks, and reduce costs. Across financial services markets, GenAI can play a role in several areas, including:
- Optimizing product and service innovation
- Enhancing contact center interactions
- Delivering personalized banking experiences
- Modernizing code
- Detecting fraud
- Creating predictive analytics and forecasting for investment insights
- Empowering agent and advisors
According to NVIDIA’s State of AI in Financial Services 2024 Trends report, 43% of respondents are already using GenAI in their organization. What’s more, three quarters consider their AI capabilities to be ahead of or right in line with their peers. More than half (51%) say they are confident that AI will be critical to their companies’ future success.
GenAI-powered financial services use cases
Across the sector, GenAI is empowering innovation and enabling new work patterns. Among them:
- Banking: Organizations are delivering personalized solutions with recommendations and enhancing customer service operations with avatar-assisted services and Natural Language Processing (NPL) chatbots that fulfill service requests promptly. GenAI is also helping to improve risk assessment via predictive analytics. In one example, BNY is deploying NVIDIA’s DGX SuperPOD AI supercomputer to enable AI-enabled applications, including deposit forecasting, payment automation, predictive trade analytics, and end-of-day cash balances.
- Trading: GenAI optimizes quant finance, helps refine trading strategies, executes trades more effectively, and revolutionizes capital markets forecasting. Using deep neural networks and Azure GPUs built with NVIDIA technology, startup Riskfuel is developing accelerated models based on AI to determine derivative valuation and risk sensitivity. GenAI can also play a role in report summarization as well as generate new trading opportunities to increase market returns.
- Payments: GenAI enables synthetic data generation and real-time fraud alerts for more proactive, accurate, and timely fraud monitoring. As new fraud patterns are identified, GenAI is used to create synthetic data and examples used to train enhanced fraud detection models. GenAI also helps identify patterns that assist in Suspicious Activity Report generation for anti-money laundering, greatly reducing investigation time.
NVIDIA + Microsoft: Partnering for AI transformation at scale
Given the pace of change, FSI companies need to lean into the right partnerships and resources to enable innovation. NVIDIA and Microsoft have a longstanding relationship centered on AI, and over the last two years, the pair have aligned GenAI offerings built from the ground up on Azure and the NVIDIA AI-enabled GPU stack.
Microsoft’s Azure infrastructure and ecosystem of software tooling, including NVIDIA AI Enterprise, is tightly coupled with NVIDIA GPUs and networking to establish an AI-ready platform unmatched in performance, security, and resiliency. The NVIDIA DGX SuperPod is the fastest path to AI innovation at scale, delivering a full-stack, turnkey solution that eliminates design complexity and facilitates time to deployment.
The partners have a shared commitment to secure and responsible AI development, and experts and services are available to streamline capacity planning, provisioning, application performance testing, and user/DevOps training at each phase of the GenAI deployment cycle.
The bottom line
Microsoft and NVIDIA’s decades-long collaboration is unleashing a full spectrum of AI foundations and services that together will quick-start the AI revolution for financial services solutions.
Read more from NVIDIA and Microsoft
https://blueprintforai.cio.com/
Finance
Concurrent Partners with TIFIN @Work to Elevate Workplace Financial Solutions
Combining Advisory Expertise and AI-Driven Insights to Deliver Real Financial Impact
BOULDER, Colo. and TAMPA, Fla., Dec. 18, 2024 /PRNewswire/ — Concurrent, one of the fastest-growing RIA aggregators in the United States, has partnered with TIFIN @Work, an AI-powered workplace growth platform, to deliver a more focused and personalized approach to workplace financial solutions. The partnership combines TIFIN @Work’s AI-driven tools with Concurrent’s advisory expertise to deliver clear, actionable outcomes for employees, employers, and advisors.
“Concurrent’s rapid growth has been built on our ability to deliver personalized, scalable solutions that meet the unique needs of clients,” said Casey Bates, Managing Director of Strategy and Growth at Concurrent. “Our partnership with TIFIN @Work strengthens our offering, combining cutting-edge AI technology with our proven advisory strategies to create financial solutions with real impact.”
TIFIN @Work’s AI technology delivers tailored actions to employees, helping them optimize their financial strategies—whether it’s optimizing paycheck contributions or planning for long-term goals. Concurrent ensures these insights are put to work, providing the expertise needed to make decisions that benefit both employees and their employers.
“This partnership is about creating better wealth outcomes with tailored solutions that truly make a difference,” said Marc McDonough, CEO of TIFIN @Work. “By combining our technology with Concurrent’s advisory experience, we’re offering a solution that directly addresses the financial needs of the workplace, creating practical value for all involved.”
The integration of TIFIN @Work’s platform with Concurrent’s advisory services provides employers with a streamlined approach to supporting employees. The result is improved engagement, stronger financial confidence, and greater opportunities for advisors.
About Concurrent
Concurrent is a multi-custodial, hybrid registered investment adviser (RIA) created to give independent advisors all the resources they need to grow their businesses and adapt to the evolving financial needs of their clients. Headquartered in Tampa, Florida, Concurrent was established in 2017 by former advisors, business owners and industry leaders to cultivate a national network of independent providers of unbiased, fiduciary advice.
Investment advisory services through Concurrent Investment Advisors, LLC (“Concurrent”), an SEC Registered Investment Advisor. To learn more about Concurrent, visit www.poweredbyconcurrent.com.
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