Fintech, regtech, suptech and central bank decision making

Ashraf Khan and Majid Malaika

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

T. Rabi Sankar, Deputy Governor of the Reserve Bank of India, noted in a virtual seminar that “CBDCs [central bank digital currencies] are likely to be in the arsenal of every central bank going forward … [E]very idea will have to wait for its time. Perhaps the time for CDBC is nigh.” (Bhat, 2021). When looking at the chapters in this book, it is clear that it is not just CBDC but financial technology (fintech) in general that is here to stay.

How could it not be? The various authors have reflected on advanced artificial intelligence (AI) and machine-learning (ML) applications from a perspective of enhancing supervision and regulation, and by ensuring enhanced compliance from a financial institution and fintech perspective. Others have outlined the pros and cons of virtual currencies, highlighting the benefits this might bring by allowing easier and safer cross-border transfers, especially for worker remittances that many low-income countries and emerging markets depend on.

Many have also shared country-specific experiences: South Africa, Hong Kong SAR, Tunisia, Bermuda and China. Some have covered digital assets and stablecoin, others have looked at CBDCs. Organisational

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