On January 20, 2022, the Federal Reserve Board published a discussion paper on the potential for a US central bank digital currency, or CBDC.  Entitled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” the paper provides further insight into the public policy concerns guiding the Fed as it deliberates whether to adopt a US CBDC.
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On November 23, 2021, the Senate Committee on Banking, Housing, and Urban Affairs sent a series of letters to prominent stablecoin issuers and cryptocurrency exchanges. Citing the recent President’s Working Group on Financial Markets report on stablecoins, the letters seek to clarify basic operational features of various stablecoins which the Committee believes is critical to improving its understanding of digital assets.
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On 25 October 2021, the Dubai Financial Services Authority, the regulatory body of the Dubai International Financial Centre (DIFC), announced that it implemented a regulatory framework for investment tokens issued or traded within the DIFC, which follows from the Consultation Paper No. 138 (Regulation of Security Tokens) it issued earlier in March this year.
Continue Reading Dubai Financial Services Authority Recently Launched Its Framework for Regulating Digital Assets

On November 1, 2021, the President’s Working Group released a long-awaited report on stablecoins. The Report outlines a number of significant legislative recommendations for Congress to consider as well as a number of interim measures that agencies should adopt under their existing authorities to protect against prudential risks in the near-term.
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As we previously reported, the New York Attorney General has been in protracted litigation with crypto exchange Bitfinex and affiliated stablecoin-issuer Tether. On February 23, 2021, the Attorney General announced a definitive settlement of the matter. The settlement cements the New York Attorney General’s intention aggressively to police the virtual currency marketplace using the expansive anti-fraud authority granted under the Martin Act
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The Office of the Comptroller of the Currency issued Interpretive Letter 1174 on January 4, 2021, clarifying the authority of national banks and federal savings associations to buy, sell, and issue stablecoins and participate in independent node verification networks in order to conduct payment activities and other bank-permissible functions.
Continue Reading OCC Authorizes Banks to Leverage Cryptocurrency Payment Networks

Newly-proposed federal legislation would require all issuers of stablecoins and certain other digital asset companies to obtain a bank charter as a condition to operation. Referred to as the Stablecoin Tethering and Bank Licensing Enforcement Act, the draft legislation is intended to shift certain digital currency activities into the regulated banking framework.
Continue Reading New Legislation Proposes to Merge Crypto and Banking

On Monday, September 21, 2020, the Office of the Comptroller of the Currency issued an interpretive letter on the authority of national banks and federal savings associations to hold stablecoin reserves. That same day, the Securities and Exchange Commission’s Strategic Hub for Innovation and Financial Technology issued a statement on the OCC’s interpretive letter. While not an official joint statement, the federal agencies were clearly aligned as FinHub’s statement on the OCC Interpretive Letter was posted on its website before the OCC published its letter.
Continue Reading OCC and SEC’s FinHub Issue Guidance on Stablecoins

In a recent speech entitled “Reinventing the Wheel (with More Automation)”, Andrew Bailey, Governor and chief executive of the Bank of England, discussed the future of digital currencies. According to Governor Bailey, we have reached the point in the cycle of innovation in payments where it is essential that we set the standards and thus the expectations for how innovation will take effect. It should not, in his opinion, happen the other way round, with the standard setting playing catch up.
Continue Reading Bank of England’s Governor Discusses Digital Currencies