- Top Lines
The Office of Science and Technology Policy (OSTP) released their report entitled “Climate and Energy Implications of Crypto-Assets in the U.S.” that follows from the Biden Administration’s Executive Order on Ensuring Responsible Development of Digital Assets. The report presents the OSTP’s findings and provides recommendations on how to minimize the climate, energy, and environmental impacts of crypto-assets.
Acting Comptroller of the Currency Michael Hsu discussed the long-term threats to trust in banking in remarks at the The Clearing House + Bank Policy Institute (TCH + BPI) Annual Conference in New York. His comments also included updates on his priorities of guarding against complacency, addressing inequality, adapting to digitalization, and managing climate-related risk in the federal banking system.
Acting Comptroller Hsu emphasized the need to maintain a “careful and cautious” approach to crypto activities, but said that he believes fintechs and big techs warrant much more attention. He expressed particular concern about bank-fintech partnerships, climate related risks, and economic inequality.
Securities and Exchange Commission (SEC) Chairman Gary Gensler discussed in a speech the SEC’s regulation of digital assets that are securities, guidance for innovators, stablecoins, and the activity of intermediaries in the space. Chair Gensler acknowledged calls for greater guidance from the crypto industry, but asserted that the Commission has spoken with a clear voice on crypto and that “not liking the message isn’t the same thing as not receiving it.”
He stated that stablecoins have features similar to, and potentially competing with, money market funds, other securities, and bank deposits, and raise important policy issues. Chair Gensler further asserted that many intermediaries should have to register with the SEC based on their activities.
Chair Gensler argued that crypto investors should get the protections they receive from companies performing activities that require SEC registration and said that he looks forward to working with Congress. Specifically, he said, “To the extent the Commodity Futures Trading Commission (CFTC) needs greater authorities with which to oversee and regulate crypto non-security tokens and related intermediaries, I look forward to working with Congress to achieve that goal consistent with maintaining the regulation of crypto security tokens and related intermediaries at the SEC.”
- Weekly Wrap Up
The Treasury Department will advise the federal government to press forward on work to issue a digital dollar, though it should only take the final step if there is sign-off that central bank digital currency is in the “national interest,” Coindesk reported.
The Treasury Department will warn the White House that “cryptocurrencies could pose significant financial risks that outweigh their benefits unless the government rolls out major new regulations,” the Washington Post reported. The Treasury is expected to state that cryptocurrency markets need strong oversight through four reports this month.
The Federal Trade Commission published a last call for comments to address “deceptive advertising and unlawful add-on sales in the auto industry by considering changes to the law that would give the agency better tools to protect consumers and honest dealerships.” The deadline for comments is September 12.
The Office of the Comptroller of the Currency (OCC) released its strategic plan for fiscal years (FY) 2023-2027. The strategic plan outlines the agency’s approach to achieve three strategic goals and fulfill its mission to ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations.
Deputy Secretary of the Treasury Wally Adeyemo delivered remarks at the TCH + BPI Annual Conference. Deputy Secretary Adeyemo discussed the clean energy transition and the need for a net zero economy, as well as steps needed to reduce economic inequality and promote economic inclusion.
Securities and Exchange Commission (SEC) Commissioner Mark Uyeda delivered remarks at the “SEC Speaks” Conference 2022. Commissioner Uyeda said that “without the benefit of comments from crypto investors and other market participants, the Commission is unable to consider their perspectives in developing an appropriate regulatory framework. To the extent that crypto assets raise unique issues not otherwise addressed in the current rule book, the Commission should consider proposing rules or issuing interpretive releases.”
The Senate Committee on Banking, Housing, and Urban Affairs held a listening session focused on Buy Now, Pay Later (BNPL) products and Training Repayment Agreement Plans (TRAP).
The SEC will establish a new office for cryptocurrency filings, the Block reported. The Office will be within the Division of Corporation Finance and will address “unique and evolving” filings around crypto assets.
The Federal Reserve Board announced that federal bank regulatory agencies have reaffirmed their commitment to implementing enhanced regulatory capital requirements that align with the final set of “Basel III” standards issued by the Basel Committee on Banking Supervision in December 2017.
The agencies plan to seek public input on the new capital standards for large banking organizations and are currently developing a joint proposed rule for issuance as soon as possible. Community banking organizations, which are subject to different capital requirements, would not be impacted by the proposal.
The Federal Deposit Insurance Corporation (FDIC) and Financial Crimes Enforcement Network (FinCEN) published the takeaways from their Digital Identity Tech Sprint earlier this year. Through the Tech Sprint, the FDIC and FinCEN challenged the teams to develop solutions to help measure the effectiveness of digital identity proofing. The Tech Sprint teams “proposed solutions that followed one of three distinct approaches: a) tools that would measure the effectiveness of identity proofing systems, b) development of a scoring methodology for remote identity proofing, and c) envisioning an identity provider consortium or platform. Several team solutions also attempted to combine more than one of the three elements, articulated roles for both the public and private sectors, called for partnerships, and identified funding mechanisms.”
- ICYMI
CA AB 2269, California’s legislation to regulate digital financial assets and digital financial asset activity, passed each chamber of the California legislature. Governor Newsom will have 30 days to sign or veto the legislation after it is delivered to his desk.
- Upcoming Hearings & Events
Thursday, September 22, at 3:30 PM ET
Brookings will hold an event entitled “Crypto, digital assets, and the future of payments system.” RSVP here.
Thursday, September 22, at 6:00 PM ET
Policymakers, crypto-experts, and community leaders will convene for cocktails and conversation at Sky Lounge. Registration for the reception is closed but you may join the waitlist here.
Friday, September 23
The Third New York Fed Conference on FinTech will bring together leading academics, policymakers, and industry leaders to further our understanding of the impact, implications, and direction of FinTech. The conference will cover recent developments in FinTech, including the perils and promises of stablecoins, the rise of decentralized finance, implications for cross-border payments, and countries’ experience with open banking and open finance. Register here.
Black Blockchain Summit
September 22nd to September 24th
The 2022 Black Blockchain Summit will be held at Howard University. Tickets can be purchased here.
Tuesday, September 27 at 10:00 AM ET
The OCC will host a virtual public meeting of the Minority Depository Institutions Advisory Committee (MDIAC). For more information and to register click here.
Wednesday, September 28, at 9:00 AM ET
Ceres will hold “Financing a Net Zero Economy,” a one-day event focused on senior bank leaders, bank investors and civil society establishing climate transition plans. Ceres Network members and NGO partners receive an additional discount. Register here.