By Giovanni Campi, Mathieu Volckrick, Paula Estaban Gomez
On 30 June, European institutions reached a provisional political agreement on the proposal for a regulation on Markets in Crypto-Assets, also known as MiCA.[1]
Read MoreBy Jeremy M. McLaughlin and Christian A. Zazzali
The Louisiana Office for Financial Institutions (“OFI”) has proposed administrative rules governing the licensing process for virtual currency businesses. Louisiana’s Virtual Currency Business Act (the “Act”) became effective in August 2020 and granted OFI broad supervisory and enforcement powers. The Act also required OFI to promulgate rules regarding licensing. Roughly two years later, OFI has done so. Those wishing to submit written comments on the proposed rules may do so through 5:00 pm on July 10, 2022. It’s expected the rules will be adopted later this year.
Read MoreBy Kai Zhang
Critical third party regime
This is to address the concentration issue where financial services firms outsource key functions/services to a few large service providers (e.g. cloud service providers). HM Treasury will designate which third party service providers are considered “critical”. Then the relevant regulators will be given power to make rules supervising them with respect to certain “material services”. See policy statement of 8 June.
Read MoreBy Judie Rinearson and Kai Zhang
The UK Payment System Regulator (“PSR”), which is becoming increasingly assertive, issued on 21 June 2022 two consultations taking a closer look at the Visa and Mastercard “schemes” in the UK.[1] The PSR proposes two market reviews: one into how Visa and Mastercard set the interchange fees; the other into how Visa and Mastercard set their scheme and processing fees. The market reviews will be conducted after the consultations close on 2 August 2022.
Read MoreBy Jeremy M. McLaughlin, Andrew M. Hinkes, and Christian Zazzali
On June 8, 2022, the New York State Department of Financial Services (“NYDFS”) released regulatory guidance applicable only to payment stablecoins that are backed by the U.S. Dollar and issued by entities regulated by NYDFS. The guidance comes one day after Senators Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) released a bill calling for dramatic changes to federal regulation of the cryptocurrency industry (see our quick analysis here) and less than a week after New York’s legislature passed two bills aimed at crypto regulation. Focusing on three criteria—redeemability, reserves, and attestation—the NYDFS stablecoin guidance is intended to ensure that payment stablecoin issuers remain solvent so holders of those payment stablecoins can timely exercise their right to redeem. This guidance does not address a stablecoin’s trading price and does not mandate that the issuer take any active measures to ensure the price of the asset on markets.
Read MoreBy Jeremy M. McLaughlin, Christian A. Zazzali, and Josh Durham
On Friday June 3, 2022, New York lawmakers passed two cryptocurrency bills, whose fate now lie in the hands of Gov. Kathy Hochul. Together, they would impose a moratorium on certain cryptocurrency mining operations and establish a cryptocurrency and blockchain task force. If successful, the mining ban would make New York the first state to enact such a moratorium.
Read MoreBy Grant F. Butler, Andrew M. Hinkes, and Robert M. Tammero, Jr.
Custodia Bank (“Custodia”) filed a complaint against the Federal Reserve Board (“FRB”) and the Federal Reserve Bank of Kansas City (“FRBKC”) in Wyoming federal court alleging that the FRB and FRBKC are unlawfully refusing to act on Custodia’s application for a master account. A Federal Reserve master account allows banks to directly access the Federal Reserve and utilize the Federal Reserve System’s payment, clearing and settlement services.
Read MoreBy Andrew Hinkes, Eden Rohrer, and Judie Rinearson
The “Lummis-Gillibrand Responsible Financial Innovation Act,” announced this morning, lays out a bold agenda for legal reform across multiple regulatory regimes aimed at clarifying legal requirements for regulated entities to issue, trade, and provide services related to certain digital assets. Although a point by point summary of the 69 page bill is beyond the scope of this post, here’s a brief summary of 10 impactful provisions from the Bill:
Read MoreBy Jeremy McLaughlin and Christian A. Zazzali
On May 4, 2022, California Governor Gavin Newsom issued an executive order on digital assets, which seeks sensible, transparent regulation through engagement with developers of digital asset-related products and services. For a detailed discussion on the executive order, see our prior blog here. In response, California’s financial regulator, the Department of Financial Protection and Innovation (DFPI), issued an invitation to submit comments on crypto-asset related products and services under the California Consumer Financial Protection Law (CCFPL). The deadline for submission is August 5, 2022.
Read MoreBy Jeremy McLaughlin and Christian A. Zazzali
On May 4, 2022, California Governor Gavin Newsom issued an executive order on digital assets largely echoing the positive sentiments of President Biden’s February executive order. The order looks to create transparent regulation around digital assets and drive innovation into the state. By directing state agencies to engage in a cooperative discussion with stakeholders and developers in web3, California seeks to create an informed supplement to the federal report on digital assets, which is due in September.
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