January 21, 2022

The Federal Reserve Board (the Fed) released a discussion paper that examines the pros and cons of a potential U.S. central bank digital currency, or CBDC. It invites comment from the public and is the first step in a discussion of whether and how a CBDC could improve the safe and effective domestic payments system. The paper does not favor any policy outcome.

Senate Banking Chair Sherrod Brown (D-OH) said he plans to hold a confirmation hearing in early February for the three FedGovernor nominees. In a virtual press conference, he said that he expects Sarah Bloom Raskin, Lisa Cook, and Philip Jefferson, if confirmed, to be tough on Wall Street and “to make sure the economy actually works for working people.” With respect to the other federal banking regulators, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), whose leaders are serving in an acting capacity, Chair Brown said, “The difference here is these other two jobs have good acting directors, acting administrators . . . With Marty at FDIC, with Michael at OCC, I think that we can move forward without full-time directors or confirmed directors.”

Securities and Exchange Commission (SEC) Commissioner Allison Herren Lee said the SEC does not need to update its rulebook to oversee digital assets, arguing that it has ample authority to bring the market in line with existing securities laws. “Rather than pursuing approaches that would single out digital assets for special treatment under SEC regs — treatment that other asset classes don’t receive — in my view we should continue to work together to bring these emerging assets and markets into compliance,” she said during an appearance at a D.C. Bar event on cryptocurrency regulation.

The California Department of Financial Protection and Innovation led 41 other states in bringing an action alleging that 400 mortgage loan originators got fake certifications for completing mandatory continuing education courses.

The Federal Reserve Bank of New York announced that Michelle Neal has been named Head of the Markets Group. In this role, she will also be a member of the Bank’s Executive Committee. Notably, she will join after serving as the Chief Executive Officer of U.S. operations at LedgerEdge, a distributed ledger technology-powered trading platform initially focused on corporate bonds.

Erik Thedéen, vice-chair of the European Securities and Markets Authority, told the Financial Times that bitcoin mining had become a “national issue” for his native country Sweden and warned that cryptocurrencies posed a risk to meeting climate change goals in the Paris agreement. Thedéen said that European regulators should consider banning a mining method known as “proof of work” and instead nudge the industry towards the less energy-intensive “proof of stake” model to cut down on the sector’s vast power usage.

The National Credit Union Administration (NCUA) identified among its 2022 Supervisory Priorities a focus on payment systems. This comes after the NCUA stated federally insurance credit unions (FICUs) could partner with third-party service providers to offer digital asset services to FICU members.

Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam announced the following executive leadership and communications appointments as he begins his chairmanship: David Gillers, Chief of Staff; Laura Gardy, Deputy Chief of Staff; John Dunfee, Chief Counsel; Alicia L. Lewis, Special Counsel; Abigail S. Knauff, Special Counsel; Steven W. Adamske, Public Affairs Director. “I have worked with all of these individuals as a Commissioner and as Acting Chairman and have utmost respect for each of them,” said Chairman Behnam. “I am confident in their knowledge, expertise and commitment to public service and the CFTC’s mission to work diligently alongside me, with each other, and the excellent staff at the CFTC on critical priorities confronting the agency.”