U.S. pressure on Russia, Syrian clashes and policy shifts in China and Washington

Off Leash update 15July CRYPTOCURRENCY •The main factor driving crypto prices to record highs over the weekend was optimism about a trio of crypto-friendly bills that the U.S. House will consider this week (which House Republicans have dubbed "Crypto Week." Here are the headlines for each: oThe GENIUS Act establishes a rather light regulatory stance on stablecoins like Tether (USDT) that are pegged to fiat currencies. The Senate has already approved it, and the House is expected to pass it this week. oThe CLARITY Act would split regulatory authority for cryptocurrencies between the Securities and Exchange Commission (SEC), which would regulate security-like tokens, and the Commodity Futures Trading Commission (CFTC), which would regulate commodity-like tokens - presumably with a lighter touch. oThe Anti-CBDC Surveillance State Act would preemptively ban the Federal Reserve from issuing a central bank digital currency (CBDC). Crypto advocates like this because it keeps the government out of the industry.

RUSSIA AND UKRAINE •Pres. Trump has made no secret of his frustration with his Russian counterpart's recalcitrance lately. Yesterday, he said the U.S. would aid the other side of Pres. Putin's war by helping Europe send more weapons to Ukraine. He also threatened "very severe tariffs" if Putin doesn't agree to a peace deal within 50 days. •The most severe tariffs that Trump could slap on Putin aren't direct levies: Russia exports little to the U.S., thanks to increasingly severe sanctions over Putin's war with Ukraine. •Rather, the most punishing new tariffs Trump could impose on Russia are indirect ones that penalize other countries that are still trading with it, leaving Moscow with even fewer willing trading partners. •Meanwhile in Ukraine, Pres. Zelensky said he plans to nominate first deputy prime minister Yulia Svyrydenko to replace longstanding prime minister Denys Shmyhal, who will become defense minister. Zelensky cited the need to "renew" the government amidst stalled peace talks and mounting public cynicism about the government.

SYRIA •Over 50 people have now died in Druze-Bedouin violence in Sweida, southern Syria. •Syria's new government has repeatedly pledged to protect the rights of minority groups like the Druze, but its critics say those pledges are either a disingenuous effort to rebrand the ex-jihadists' image or an excuse to grab power in southern Druze areas where they lack control. Or both. •Interior Minister Anas Khattab added weight to the latter criticism in a social media post citing "the absence of state institutions" in Sweida as "a primary reason for the ongoing tensions," and concluding that "[t]here is no solution to this except by imposing security" on the region. •Thus, the government moved troops south to "quickly and decisively" quash the violence, siding mostly with the Bedouin (who share Syria's leaders' Sunni faith) and against the Druze. Instead, armed Druze quickly and decisively attacked the government troops, who comprised nearly half of yesterday's casualties. •Israel joined the Druze in firing at the incoming Syrian tanks. Israel's defense minister said the airstrikes sent a "clear warning" that Israel - which is home to a large and militarily active Druze minority - "will not allow harm to come to the Druze in Syria." Israel's quieter secondary motive is to prevent Syrian forces it doesn't trust from filling the power gap in the south and amassing arms and troops along the Israeli-Syrian border.

CHINA •New Chinese data showed 5.2% year-on-year GDP growth in the second quarter. That was better than analysts had expected, suggesting that Beijing's consumer subsidies, monetary easing, and infrastructure spending successfully offset the negative effects of higher U.S. tariffs. •Separately, China introduced a new "digital ID" program today. The government says the program will improve "information security," but privacy advocates say it will facilitate 1/2