February 4, 2022

Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams delivered her final remarks as FDIC chair. She discussed, among other things, the importance of promoting innovation, competition, and inclusion. She called for supporting  third-party partnerships for community banks, further exploring policymaking for cryptoassets and stablecoin innovation, and highlighting the FDIC’s accomplishment of driving capital investment to support low- and moderate-income, minority, and rural communities. 

The Federal Reserve Bank of Boston and the Digital Currency Initiative at the Massachusetts Institute of Technology released the findings of their initial technological research into a potential central bank digital currency (CBDC). The published research describes a theoretical high-performance and resilient transaction processor for a CBDC that was developed using open-source research software, OpenCBDC. 

Members of Congress introduced legislative proposals impacting digital assets:  

  • Congressman Jim Himes (D-CT) proposed that the House narrow a financial crimes provision he submitted in the Democrats’ version of the China competitiveness bill, after cryptocurrency advocates warned the proposal threatened the industry and its users.

  • An amendment by Congressman Darren Soto (D-FL) to the America COMPETES Act passed, requiring the Director of the Office of Science and Technology Policy (OSTP), within The White House, to establish a blockchain and cryptocurrencies advisory specialist position within the Office to advise the President on matters related to blockchain and cryptocurrencies.

  • Congresswoman Suzan DelBene (D-WA) introduced the Virtual Currency Tax Fairness Act of 2022. If signed into law, the bill would create a $200 de minimis threshold regarding the application of capital gains taxes on dispositions of cryptocurrency used for purchases.

The Securities and Exchange Commission (SEC) published its annual Staff Report on Nationally Recognized Statistical Rating Organizations (NRSROs), providing a summary of the SEC staff’s examinations of NRSROs and discussing the state of competition, transparency, and conflicts of interest among NRSROs.

The Consumer Financial Protection Bureau (CFPB) issued a request for public comment related to fees imposed by providers of consumer financial products and services. Comments must be received on or before March 31, 2022.

The CFPB published a report entitled Justice-Involved Individuals and the Consumer Financial Marketplace. The report outlines some of the financial challenges faced by individuals within the criminal justice system, including those who are detained, incarcerated, and released from incarceration, and raises questions about the transparency, fairness, and availability of consumer choice in markets associated with the justice system. 

The Office of the Comptroller of the Currency (OCC) announced that it will host virtual Innovation Office Hours on March 16-17. Office Hours are an opportunity to discuss with OCC staff matters regarding fintech, new products and services, partnering with a bank or fintech, or any other matter related to responsible innovation in financial services.

The Brookings Institution held a webinar on how fintech firms can help address the racial wealth gap and strengthen majority Black communities. Read our summary here

The Conference of State Bank Supervisors (CSBS) sent a letter to Senate leadership stressing the importance of confirming a member of the Federal Deposit Insurance Corporation (FDIC) Board of Directors with state bank supervisory experience, 

On Thursday, February 3, the Senate Banking Committee held a hearing on the nominations of Sarah Bloom Raskin to be Vice Chairman for Supervision and a Member of the Board of Governors of the Federal Reserve System; Dr. Lisa DeNell Cook to be a Member of the Board of Governors of the Federal Reserve System; and Dr. Philip Nathan Jefferson to be a Member of the Board of Governors of the Federal Reserve System. Senator Sherrod Brown (D-OH) outlined his support for the nominees while Ranking Member Senator Pat Toomey (R-PA) rallied against Raskin and Cook. Read our full hearing summary here

The U.S. Department of the Treasury released a study on the facilitation of money laundering and the financing of terrorism through the trade in work of high-value art. The study acknowledges NFTs and the associated risks they may present, and outlines recommendations for non-regulatory and regulatory options to address the identified risks. 

Alexis Goldstein, Director of Financial Policy at the Open Markets Institute, a non-profit focused on competition in financial markets, will join the Consumer Financial Protection Bureau (CFPB). Goldstein will work on a range of issues including digital assets, She previously has been a vocal skeptic of cryptocurrencies. Read our intel report on Goldstein from last year that alerted clients to her move to the CFPB here

Global Digital Finance (GDF) released their 2021 annual reportDigital Money and Nextgen Market Infrastructure: Macro And Regulatory Headwinds Prevail, which includes insights on the digital asset sector from US Securities Exchange Commission, FSB, IMF, OECD, R3, Coinbase, Huobi, Visa, Hogan Lovells, Standard Chartered, ConsenSys, Crypto Compare, and many more. 

February 11th-February 20th: Partner John Collins will speak at ETHDenver. 

February 20th-22nd: Partner John Collins will speak at the Conference for Community Bankers. 

February 24th: Senior Advisor Amy Friend will speak on a panel for the Alliance for Innovative Regulation’s webinar entitled “Make Money Green: Climate, ESG and Financial Regulation.” 

February 8 at 10:00 AM ET: The House Financial Services Committee will hold a virtual hearing entitled “Digital Assets and the Future of Finance: The President’s Working Group on Financial Markets’ Report on Stablecoins.” Read a memo prepared by the Committee on the hearing here

February 9 at 10:00 AM ET: The Senate Committee on Agriculture, Nutrition, and Forestry will hold a hearing entitled “Examining Digital Assets: Risks, Regulation, and Innovation.” Witnesses for the hearing will include: 

  • Panel 1: The Honorable Rostin Behnam, Chairman, CFTC
  • Panel 2: 
    • Sam Bankman-Fried, CEO, FTX
    • Perianne Boring, Founder and President, Chamber of Digital Commerce
    • Sandra Ro, CEO, Global Blockchain Business Council – USA 
    • Kevin Werbach, Professor, The Wharton School, University of Pennsylvania