BitOoda Global & Regulatory Analysis, 12/16/2019: Signs of Optimism for Regulatory Advancement?

As our readers know, we at BitOoda remain vigorously optimistic about the sustained advancement of digital assets and their continued global growth, even though we typically are not brimming with positivity about regulatory developments both here and abroad. However, several actions and statements this week gave us a glimpse of a potential future where regulators at every level — global bodies, U.S. executive branch agencies, U.S. Congress, and state-level authorities — understand the complex issues surrounding digital assets and address them in increasingly logical ways.

  • The Basel Committee on Bank Supervision, which sets global banking standards, conducted a survey and issued a discussion paper on “designing a prudential treatment for crypto-assets.” The Committee, while focusing heavily on risks, does three things that we think make the paper’s publication a positive development: (1) it is coordinating its work with other international standard-setting bodies “to help develop a holistic approach to the regulatory treatment of crypto-assets;” (2) it lays out a planned way ahead — the development of proposed standards for banks’ treatment of digital assets; and (3) it recognizes the “meaningful” and growing significance of crypto-assets in the global economy.
  • The biggest news of the week for us on the regulatory front was SEC Chair Jay Clayton’s statements of optimism about blockchain, and his recognition of the inevitable digitization of the U.S. economy. Could this signal an increasing openness by the leader of the most important U.S. regulatory agency to more actively promoting domestic digital asset markets? We think it’s way too early to make that call, but we are encouraged to hear Clayton discuss issues other than unregistered ICOs and crypto market manipulation.
  • It’s looking increasingly likely that Congress will soon pass its first piece of legislation addressing digital assets in a meaningful way, with the CFTC Reauthorization Act calling for dedicated rules for crypto derivative products. While limited in its scope to the CFTC, this is still an important first step toward establishing a modern legislative foundation for governance of digital assets here in the U.S.
  • Four years after the establishment of New York’s BitLicense regime, the Department of Financial Services is proposing two new mechanisms to streamline the approval process for new services and coin listings by BitLicense holders. The first would be a website listing all coins pre-approved by DFS, and the second would be to allow firms to use a DFS-approved coin-listing policy to self-certify any new assets it wants to handle. These are the first such proposals from DFS on the BitLicense process, and we hope they signal a genuine desire by DFS to encourage the growth of digital asset markets.

Taken together, these developments represent a series of positive steps at the global, national, and state levels, including tangible actions that could demonstrably impact the state of U.S. markets. While we retain a realistic perspective on the long road ahead for regulatory improvement for the space, we welcome these actions and statements and will continue to closely follow developments that could further enhance BitOoda’s ability to provide our clients with the best products and services.

A global digital asset financial technology & services platform providing next-gen risk management solutions, best-execution brokerage & expert market analysis.

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