US – Page 4 – FinTech and Blockchain Law Watch

On Heels of Crypto Legislative Activity, NYDFS Follows Up With Crypto Stablecoin Guidance

Jun 21 2022

By 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.

New York Legislators Address Crypto Head-On

Jun 14 2022

By 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.

Let Me In: Wyoming Special Purpose Bank Sues Fed for Access to Payments System

Jun 10 2022

By 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.

10 Impactful Provisions of the Lummis-Gillibrand Bill

Jun 07 2022

By 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:

California Soliciting Comments on Potential Regulation of Crypto Products and Services

Jun 02 2022

By 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.

California’s Executive Order Embraces Crypto

May 10 2022

By 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.

The Fed Wants Your Input On A Potential Digital Dollar

Jan 26 2022

By Jeremy M. McLaughlin and Daniel S. Nuñez Cohen

Last week the Federal Reserve Board (the “Fed”) issued a discussion paper entitled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation” (the “Paper”). The Paper explores the advantages and disadvantages of the Fed issuing a central bank digital currency (CBDC or digital dollar); key design considerations of such a currency; and seeks feedback from the public on 22 specific questions directed at those topics. Comments are due by May 20, 2022. Given that Congress has indicated its interest in the Paper, digital asset and financial services industry participants should use this opportunity to have their voices heard by the Fed and members of Congress.

California Imposes Additional Requirements on Money Transmitters

Oct 06 2021

By Jeremy M. McLaughlin

Under a newly-enacted law, money transmitters licensed in California must comply with new customer service requirements starting on July 1, 2022. Under the requirements, a licensee must “prominently display on its internet website a toll-free telephone number through which a customer may contact the licensee for customer service issues and receive live customer assistance.” The line must be operative at least 10 hours a day, Monday through Friday. In addition, California law currently requires a money transmitter to provide a receipt for transactions. Under the new requirements, the receipt must also provide the telephone number through which the customer may contact the licensee for customer service issues.

ASIC enters into bilateral cross border cooperation agreement with US regulator

Oct 08 2018

By Jim Bulling, Felix Charlesworth and Edwin Tan

On 4 October 2018, the Australian Securities and Investments Commission (ASIC) entered into the ‘Cooperation Arrangement on Financial Technology Innovation’ bilateral agreement (Agreement) with the US Commodity Futures Trading Commission (CFTC) to cooperate and exchange information in the fintech and regtech industries in each jurisdiction. Broadly, the Agreement seeks to enhance mutual understanding, identify market developments and trends, facilitate fintech innovation and foster the use of more efficient and effective regtech.

A Regulatory Sandbox for FinTech Innovation Emerges on the U.S. Playground: What It Means for Money Transmitters

May 11 2018

By Eric A. Love and Judith Rinearson

Many FinTechs have benefited from government-established regulatory sandboxes in diverse jurisdictions such as Australia, the UK and Singapore. However, the U.S. has been noticeably slow to adapt these innovation-friendly programs. That is now changing.

Arizona recently enacted a new law (H.B. 2434) to create a Regulatory Sandbox Program (the “Program”) that will allow FinTech companies to temporarily test innovative financial products and services without being subject to money transmitter and similar licensing requirements in that state. The Program will be administered by the Arizona Attorney General (the “AG”) and is the first of its kind among U.S. states.

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