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Category Archives: Blockchain, Crypto, Digital Assets, Tokens, Meta, NFTs

X-Border Payments: European Central Bank Report says CBDCs Could Be ‘Holy Grail’

PYMNTS | Aug 2, 2022

ECB Towards holy grail of cross border payments - X-Border Payments:  European Central Bank Report says CBDCs Could Be ‘Holy Grail’A central bank digital currency (CBDC) could be the “holy grail” for cross-border payments, offering a solution that is “immediate, cheap, universal in terms of reach, and settled in a secure settlement medium,” the European Central Bank (ECB) said in a recent report on identifying the ultimate cross-border payment medium.

“... the interlinking of domestic payment systems and the future interoperability of CBDCs are the most promising avenues,” according to the report, which also concluded that “... Bitcoin is least credible.”

The report points to the greater compatibility CBDCs have with forex exchange (FX) conversions, the upholding of monetary sovereignty, and easy instant payments via intermediaries such as central banks, the report indicated.

See: 

PBOC White Paper: e-CNY’s Path to Cross-Border Payments

Half of Multinational Firms Use Digital Currency for Cross-Border Payments (or Plan to)

Some central bankers from the G20, however, have hinted that digital currencies issued by the private sector may have more utility than those issued by central banks. Australian central bank Governor Philip Lowe said at a panel discussion that he’s in favor of a private sector solution over the central bank.

The promise of using CBDCs for cross-border payments depends on the progress made regarding anti-money laundering and counter-terrorist financing compliance measures to ensure straight-through-processing (STP) for the large majority of cross-border payments, according to the report.

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NCFA Jan 2018 resize - X-Border Payments:  European Central Bank Report says CBDCs Could Be ‘Holy Grail’The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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SoFi Launches Web3 Themed ETF on Nasdaq

ETF Strategy | James Lord | Aug 12, 2022

SoFi - SoFi Launches Web3 Themed ETF on NasdaqOnline personal finance and investment company SoFi Technologies has launched a thematic equity ETF targeting companies powering ‘Web 3’, a future iteration of the internet characterized by blockchain technology, artificial intelligence, and the metaverse.  The SoFi Web 3 ETF (TWEB US) has been listed on Nasdaq with an expense ratio of 0.59%.

Web 1, 2, 3

  • Looking back at the historical development of the internet, Web 1 represented the initial collection of links and homepages which could be viewed by users but lacked meaningful interaction. This version of the internet was primarily about businesses being able to share essential information.

See:  How will Web3 impact the future of work?

  • Web 2 refers to the period when users not only consumed content but created their own through channels such as blogs, media platforms, and marketplaces. While Web 2 created many ‘free’ services such as search engines, email, e-commerce, and social media, the primary criticism of this version is the privacy and security concerns for users whose data has been harvested at scale by large tech firms.
  • Indeed, the notion of Web 3 is being driven by a desire to combat these privacy and security concerns, shifting power back towards individuals and away from the dependency on large tech companies like Amazon, Alphabet, Facebook (Meta), Twitter, and Netflix.

By utilizing decentralized operational structures, blockchain technologies, and cryptocurrencies, Web3 aims to put the ownership and control of peoples’ data back into their own hands. Users will be able to engage with Web 3 through their crypto wallets, allowing them to monetize their data or take it with them when they log off.

Anthony Noto, CEO of SoFi Technologies, said:

“SoFi has a unique perspective on how the next generation spends, saves, and invests their money given our breadth of products. With this next phase of ETF launches, we’re focusing on funds that help people get their money right while also allowing them to invest in what they are most passionate about right now. We know many of our members look at Web 3 as an important part of the future, and we are thrilled to be providing a low-cost investment vehicle designed to meet those interests.”

Investment approach

The fund is linked to the SoFi Solactive ARTIS Web 3.0 Index which selects its constituents from a universe of developed market stocks with market capitalizations above $100 million and average daily trading volumes greater than $1m.

See:  5 Ingredients to Cook Up Your Own DAO

The methodology screens for Web 3 companies that derive at least 50% of their revenues from products and services in one of the following four industry categories: Big Data & Artificial Intelligence, Blockchain Technology, the Metaverse, and NFT & Tokenization.

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NCFA Jan 2018 resize - SoFi Launches Web3 Themed ETF on NasdaqThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Caution: Binance Chain Red Alarm System Flags 50 New Projects as Potential Scams

Cointelegraph | Arijit Sarkar | Aug 15, 2022

Binance platform red flags list - Caution:  Binance Chain Red Alarm System Flags 50 New Projects as Potential Scams

BNB Chain’s Red Alert system flags projects based on obvious features that have been historically used in scams, rug pulls and phishing.

BNB Chain, a blockchain network created by crypto exchange Binance, has identified over 50 on-chain projects that pose a significant risk to users. A mix of crypto spin-offs resembling Dogecoin (DOGE) and Binance and others dedicated to pandas, cyborgs and koalas made the list as untrustworthy and high-risk projects.

See:  Binance CEO Raises Red Flag on Massive Chinese Data Leak

BNB Chain’s Red Alarm feature, implemented to protect investors from potential rug pulls and scams, flags projects based on two main criteria: if the contract performs differently from what the project owners advertised and if the contract shows risks that might influence users’ funds.

Speaking to Cointelegraph, Gwendolyn Regina, investment director at BNB Chain, said that the Red Alarm system analyzed 3,300 contracts in July alone, adding that the company continues to develop further measures for highlighting deceptive practices in the ecosystem.

New projects that have not been tested and lack genuine products are flagged by the system based on apparent features that have been historically used in scams, rug pulls and phishing. Regina added:

“We will tend to put them on the ‘Red Alarm’ list to effectively warn users to steer clear or participate with caution.”

As a result, the real-time identification of risky projects serves as a proactive measure in helping to protect investor funds. Red Alarm also allows users to assess project risks by entering the contract address to discover if it has logical flaws or fraud risks.

See:  Crypto scams, DeFi hacks, and rug pulls: Why the crypto industry needs insurtech

In addition to BNB Chain’s measures, Regina recommended investors “do their own research” while engaging with projects within the BNB Chain ecosystem.

Continue to the full article --> here


NCFA Jan 2018 resize - Caution:  Binance Chain Red Alarm System Flags 50 New Projects as Potential ScamsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Want Institutional Adoption? You Have to Sacrifice Tornado Cash, says Kevin O’Leary

Cointelegraph | Brayden Lindrea  | Aug 14, 2022

Eye of a Tornado - Want Institutional Adoption? You Have to Sacrifice Tornado Cash, says Kevin O’Leary

Mr. Wonderful thinks that crypto needs more regulation and less “crypto cowboys” like Tornado Cash creator Alexey Pertsev, who he suggested was a necessary sacrifice to create stability for institutional inflows.

Kevin O’Leary, Shark Tank host and venture capitalist:

  • Ethereum-based crypto mixer Tornado Cash are a part of a “crypto cowboy” culture that shouldn’t have a place in the industry.  Instead, crypto needs a “rules-based environment” in order to attract real institutional capital into the digital-asset industry, and much of that regulation needs to stamp out protocols like Tornado Cash, which enables users to conduct anonymous transactions and therefore potentially engage in criminal activity.

“At the end of the day, it’s okay to arrest that guy. Why? He’s messing with the primal forces of regulation [...] If we have to sacrifice him, that’s okay, because we want to have some stability in that institutional capital.”

See:  Analysis: Into the Eye of a Tornado | Sanctions Compliance Best Practices for Crypto Businesses

Gnosis co-founder Stefan George:

  • he protocol brings “much-needed privacy” to Ethereum and that writing open-source software should be recognized as “an expression of free speech.”

Patrick Collins, Chainlink Lead Developer Advocate:

  • the decision to remove Tornado Cash’s GitHub account is “much worse than sanctioning a website,” as code is speech and, by doing so, the U.S. Treasury is violating the first amendment of the U.S. Constitution.

Continue to the full article --> here


Protocol | Aug 15, 2022

Spinning Crypto Perspectives

Dutch authorities say there may be more arrests. The Netherlands’ Financial Advanced Cyber Team, part of the country’s Fiscal Information and Investigation Service, began investigating Tornado Cash in June.

See:  How do intellectual property rights apply to AI?

  • The arrested man’s name is Alexey Pertsev, his wife confirmed to the Block. He was apprehended last Wednesday in Amsterdam’s city center, two days after the United States issued sanctions against Tornado Cash. Pertsev is not a founder of Tornado Cash. The founders are Roman Semenov and Roman Storm. Neither has been arrested, and neither responded to Protocol’s requests for comment.
  • According to Dutch authorities, Pertsev is “suspected of involvement in concealing criminal financial flows and facilitating money laundering,” — not personally disobeying sanctions or making other illegal money transfers with his own funds.

Liability for contributing code is a complex question. Much depends on the specifics of a country’s law.

  • In the United States, for example, posting code on GitHub is legal in most cases so long as it’s not a violation of intellectual property law. That’s because code is viewed as speech protected by the First Amendment.
  • Jeffrey Blockinger, general counsel at Quadrata, says most developers don’t need to be concerned about an arrest. “While privacy concerns are legitimate, this arrest is reportedly focused on evidence of actual criminal activity,” he told Protocol. Quadrata, which provides an identity layer for blockchains, says it can help block people subject to sanctions and other bad actors from completing transactions.

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NCFA Jan 2018 resize - Want Institutional Adoption? You Have to Sacrifice Tornado Cash, says Kevin O’LearyThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Canadian Securities Regulators Expect Crypto Trading Platforms to Complete Pre-Registration Step

CSA | Release | Aug 15, 2022

CSA logo - Canadian Securities Regulators Expect Crypto Trading Platforms to Complete Pre-Registration StepTORONTO – The Canadian Securities Administrators (CSA) is providing an important update to crypto trading platforms that continue to operate in Canada while they take steps to comply with applicable securities legislation.

CSA members now expect such platforms to provide a pre-registration undertaking to their principal regulator to continue operations while their application is reviewed. By giving these undertakings, crypto trading platforms agree to comply with terms and conditions that address investor protection concerns and are consistent with requirements currently applicable to registered platforms.

The Ontario Securities Commission today published the first pre-registration undertakings, filed by Coinsquare Capital Markets Ltd. and Crypto.com. CSA members are in discussions with other crypto trading platforms about providing pre-registration undertakings. Once provided, these undertakings will be published on the CSA’s website.

See:  CSA Regulatory Sandbox / Crypto Asset Trading Platform Decisions

CSA members may take action if a crypto trading platform is not prepared to file an undertaking or does not abide by the terms of an undertaking.

On March 29, 2021, the CSA and the Investment Industry Regulatory Organization of Canada published a notice outlining securities law requirements that apply to crypto trading platforms.

All crypto trading platforms that are registered in Canada or that have provided a pre-registration undertaking to a CSA member are listed on the CSA’s website.

View the original release --> here


McCarthy Tetrault | Lori Stein and Rene Sorell| Aug 16, 2022

Select Analysis on Initial Pre-registration Undertakings by Coinsquare and Crypto.com

 

  • Coinsquare and Crypto.com agree to adopt policies and procedures to ensure that their advertising and social media use is fair, balanced and not misleading, having regard to CSA guidance and federal government guidance under the Competition Act. Registered CTPs are subject to such CSA and federal government guidance by virtue of their registrations.
  • Coinsquare and Crypto.com are prohibited from offering staking or lending services to Canadian clients without regulatory consent. Registered CTPs are not expressly prohibited from offering staking, but all registrants other than IIROC members are prohibited from lending money, extending credit or providing margin to clients, subject to certain limited exceptions. In addition, the CTP Orders include conditions which restrict each CTP’s business activities to spot crypto asset trading and custody services, and oblige the CTP to obtain regulatory approval for any expansion in the scope of its business activities.

See:  A Global Review Of The Regulatory Considerations Relating To Crypto-Asset Trading Platforms

  • Coinsquare and Crypto.com are not required to de-list a crypto asset based on a determination made by a court or securities regulator in Canada or the foreign jurisdiction with which the crypto asset has the most significant connection that the crypto asset is a security or derivative, or upon becoming aware of the view of a regulator that the crypto asset is a security or derivative. Registered CTPs have accepted this requirement as a condition of registration. However, like Registered CTPs, Coinsquare and Crypto.com may not list a crypto asset that is a security or derivative based on an internal review by the platform, or a crypto asset which is issued by or on behalf of a person or company that has been subject to an order, sanction, or administrative penalty relating to fraud, violation of anti-money laundering laws, violation of securities laws, or similar conduct in specified jurisdictions, including the United States, the United Kingdom and the member states of the European Union.
  • The definition of “Specified Crypto Assets” in the undertakings includes Bitcoin, Ether, Litecoin, Bitcoin Cash and any other Crypto Asset that has been designated in writing by the CSA as a Specific Crypto Asset for the purposes of the undertaking [paraphrase].  In all jurisdictions other than Alberta, British Columbia, Manitoba and Quebec (the “Investment Limit Jurisdictions”), Registered CTPs that are exempt from the suitability obligation may sell a maximum of C$30,000 worth of crypto assets other than Specified Crypto Assets to a client in any 12 month period.
  • In the Investment Limit Jurisdictions, Coinsquare’s undertaking limits a client’s investments in crypto assets other than Specified Crypto Assets in any 12 month period to C$30,000 for clients that do not qualify as “eligible crypto investors”, C$100,000 for clients that qualify as “eligible crypto investors” and unlimited for clients that qualify as “accredited crypto investors”.

 

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NCFA Jan 2018 resize - Canadian Securities Regulators Expect Crypto Trading Platforms to Complete Pre-Registration StepThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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What Happened to Cryptokitties? Blockchain’s First Blockbuster Game

IEEE Spectrum | Matthew S. Smith | Aug 10, 2022

Cryptokitties rise and fall - What Happened to Cryptokitties?  Blockchain's First Blockbuster GameThe rise and fall of CryptoKitties

CryptoKitties was among the first projects to harness smart contracts by attaching code to data constructs called tokens, on the Ethereum blockchain. Each chunk of the game’s code (which it refers to as a “gene”) describes the attributes of a digital cat. Players buy, collect, sell, and even breed new felines. Just like individual Ethereum tokens and bitcoins, the cat’s code also ensures that the token representing each cat is unique, which is where the nonfungible token, or NFT, comes in.

“Before CryptoKitties, if you were to say ‘blockchain,’ everyone would have assumed you’re talking about cryptocurrency”—Bryce Bladon

Launched on 28 November 2017 after a five-day closed beta, CryptoKitties skyrocketed in popularity on an alluring tagline: the world’s first Ethereum game.  “As soon as it launched, it pretty much immediately went viral,” says Bryce Bladon, a founding member of the team that created CryptoKitties.

See:  What Does The Financialization of Games Mean? GameFi

“That was an incredibly bewildering time.”  Sales volume surged from just 1,500 nonfungible felines on launch day to more than 52,000 on 10 December 2017, according to nonfungible.com, with many CryptoKitties selling for valuations in the hundreds or thousands of dollars. The value of the game’s algorithmically generated cats led to coverage in hundreds of publications.  Today, CryptoKitties is lucky to break 100 sales a day, and the total value is often less than $10,000. Large transactions, like the sale of Founder Cat #71 for 60 ether (roughly $170,000) on 30 April 2022, do still occur—but only once every few months. Most nonfungible fur-babies sell for tiny fractions of 1 ether, worth just tens of dollars in July 2022.

What went wrong?

Breeding, a core mechanic of the game, lets owners pair their existing NFTs to create algorithmically generated offspring. This gave the NFTs inherent value in the game’s ecosystem. Each NFT was able to generate more NFTs, which players could then resell for profit. But this game mechanism also saturated the market. Xiaofan Liu, an assistant professor in the department of media and communication at City University of Hong Kong who coauthored a paper on CryptoKitties’ rise and fall, sees this as a flaw the game could never overcome.  More players meant more demand, but it also meant more opportunities to create supply through breeding new cats. This quickly diluted the rarity of each NFT.

See:  Epic Games Raises $2 Billion From Lego Investors & Sony for Family-friendly Metaverse

“The price of a kitty depends first on rarity, and that depends on the gene side. And the second dimension is just how many kitties are on the market,” Liu says. “With more people came more kitties.”

“Players who wanted to buy CryptoKitties incurred high gas fees,” Mihai Vicol, market analyst at Newzoo, said in an interview. “Those gas fees were anywhere from $100 to $200 per transaction. You had to pay the price of the CryptoKitty, plus the gas fee. That’s a major issue.”

The high fees weren’t just a problem for CryptoKitties. It was an issue for the entire blockchain. Anyone who wanted to transact in Ethereum, for any reason, had to pay more for gas as the game became more successful.

Continue to the full article --> here


NCFA Jan 2018 resize - What Happened to Cryptokitties?  Blockchain's First Blockbuster GameThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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The OCC is Facing Calls to Pull Guidance That Allows Banks to Do Some Crypto Business

Protocol | Brian Deffenbaugh | Aug 11, 2022

Financial Banks and crypto - The OCC is Facing Calls to Pull Guidance That Allows Banks to Do Some Crypto BusinessA group of progressive senators including Elizabeth Warren and Bernie Sanders are calling on a federal banking regulator to pull Trump-era guidance that gives banks limited clearance to engage in crypto-related business.

In a Wednesday letter addressed to the Office of the Comptroller of the Currency, the senators pushed forward an ongoing debate over the role banks should play in the crypto ecosystem. Banking industry groups say the regulated institutions can bring stability to the volatile sector. But the lawmakers fear crypto could introduce systemic risk to the broader banking system without strict guardrails.

See:  BIS Limits Banks to Hold 1% of Reserves in Bitcoin –> “Banks Won’t HOLDL”

The OCC's current guidance was published in late 2020 and early 2021. It gives federally chartered banks clearance to provide crypto custody service, hold cash reserves backing stablecoins and use blockchain technology and stablecoins to verify bank-to-bank payments.

Inaction vs. limitation

A banking industry trade group recently argued that limiting banks’ participation in crypto is counterproductive to protecting consumers. A Monday letter from the American Bankers Association to the Treasury Department noted banks are facing restrictions that mostly keep them out of digital assets, while there is still little regulation for non-banks involved in crypto.

Brooke Ybarra, senior VP of innovation and strategy, American Bankers Assocation:

The combination of these two approaches — inaction on the one hand to bring into the regulatory perimeter non-bank crypto companies, and limitation on the other of banks’ ability to engage responsibly in the digital asset market — creates an environment that makes it nearly impossible for responsible financial innovation to occur in this space.

Next

The senators’ letter calls on the OCC to take up a new process with the Federal Deposit Insurance Corp. and Federal Reserve to clarify how the banks they oversee can engage with crypto. The letter also includes a series of questions about how many OCC-regulated banks are engaging in crypto activities.

See:  How the Big Five Banks Control Canada’s Payment Systems

The OCC, FDIC and Federal Reserve released a joint statement late last year promising further clarity would come for banks on crypto in 2022 — but guidance since then has been limited. The FDIC recently put out a statement warning banks they must monitor how the crypto firms they partner with advertise the availability of deposit insurance. That concern, plus Warren and Sanders’ attention, could be a signal of additional action coming.

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NCFA Jan 2018 resize - The OCC is Facing Calls to Pull Guidance That Allows Banks to Do Some Crypto BusinessThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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