US regulatory certainty versus uncertainty for crypto and blockchain

Jason Brett and Whitney Kalmbach

Contents

Foreword

Preface

Preface

Introduction: Suptech/regtech defined: Payments, sandboxes and beyond

1.

The uncertain prudential treatment of cryptoassets

2.

US regulatory certainty versus uncertainty for crypto and blockchain

3.

Bermuda: Suptech and regtech supporting the risk-based approach

4.

Suptech: A new era of supervisory philosophy

5.

Cloud computing in the financial sector: A global perspective

6.

DeFi protocol risks: The paradox of cryptofinance

7.

IT transformation in the Prudential Authority of South Africa: A case study

8.

Making the vision a reality: Perspectives from the Monetary Authority of Singapore

9.

Lessons from Hong Kong through the lens of the HKMA

10.

Technological change: Is it different this time?

11.

The ECB’s suptech innovation house: Paving the way for digital transformation of banking supervision

12.

China’s financing opening up and regulatory convergence with the world

13.

Disclosures and market discipline: The promise of regtech

14.

Regtech and new derivatives developments

15.

Fintech and regtech: Leading the evolution and regulation of alternative investments

16.

The role of artificial intelligence and big data in investment management

17.

The promise and challenges of machine learning in finance

18.

Data privacy and alternative data

19.

Digital ID and financial inclusion

20.

Strategic technology: Regulation and innovation of CBDCs

21.

Regulatory sandboxes: Innovation and financial inclusion

22.

Technology and sandbox development innovation in a transitional market: A case study

23.

Developing the regulatory ecosystem: The evolution of stablecoin

24.

Central bank digital currency, regtech and suptech

25.

Digital dollar: Cryptocurrency for everyday commerce

26.

CFTC regtech implications for virtual currency trading

27.

Fintech, regtech, suptech and central bank decision making

This chapter will provide an overview of the key regulatory decisions as well as the legislative bills that impacted the cryptocurrency and blockchain industry in the US in 2020. Regulatory and supervisory technical developments in the US have included the introduction of HR2211. The Digital Currency Study Act 2021 provided congressional support for the Federal Reserve to actively evaluate alternatives to paper currency, including a Central Bank Digital Currency.

REGULATORY UPDATES OF NOTE FOR DIGITAL ASSETS

2020 was a dynamic year for regulatory updates related to cryptocurrency. On July 22, the Office of the Comptroller of the Currency (OCC), the regulator for all national banks that is part of the US Department of the Treasury, published OCC Interpretive Letter 1170 (OCC, 2020), which clarified that national banks and federal savings associations have the authority to provide cryptocurrency custody services for customers. The letter explained how the OCC has authorised custody of both physical objects and electronic assets. They specifically recognised the importance of digital assets and the authority for banks to provide safekeeping for such assets since 1998. Providing

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