NCFAs innovation and funding ecosystem

Category Archives: Legal Issues and Regulation

Cryptoassets as National Currency? A Step Too Far

IMF Blog | Tobias Adrian and Rhoda Weeks-Brown | Jul 26, 2021

cryptoassets - Cryptoassets as National Currency? A Step Too FarNew digital forms of money have the potential to provide cheaper and faster payments, enhance financial inclusion, improve resilience and competition among payment providers, and facilitate cross-border transfers.

But doing so is not straightforward. It requires significant investment as well as difficult policy choices, such as clarifying the role of the public and private sectors in providing and regulating digital forms of money.

Some countries may be tempted by a shortcut: adopting cryptoassets as national currencies. Many are indeed secure, easy to access, and cheap to transact. We believe, however, that in most cases risks and costs outweigh potential benefits.

Cryptoassets are privately issued tokens based on cryptographic techniques and denominated in their own unit of account. Their value can be extremely volatile. Bitcoin, for instance, reached a peak of $65,000 in April and crashed to less than half that value two months later.

See:  Ripple Pilots a Private Ledger for Central Banks Launching CBDCs

And yet, Bitcoin lives on. For some, it is an opportunity to transact anonymously—for good or bad. For others, it is a means to diversify portfolios and hold a speculative asset that can bring riches but also significant losses.

Cryptoassets are thus fundamentally different from other kinds of digital money. Central banks, for instance, are considering issuing digital currencies—digital money issued in the form of a liability of the central bank. Private companies are also pushing the frontier, with money that can be sent over mobile phones, popular in East Africa and China, and with stablecoins, whose value depends on the safety and liquidity of backing assets.

Cryptoassets as legal tender?

Bitcoin and its peers have mostly remained on the fringes of finance and payments, yet some countries are actively considering granting cryptoassets legal tender status, and even making these a second (or potentially only) national currency.

If a cryptoasset were granted legal tender status, it would have to be accepted by creditors in payment of monetary obligations, including taxes, similar to notes and coins (currency) issued by the central bank.
Countries can even go further by passing laws to encourage the use of cryptoassets as a national currency, that is, as an official monetary unit (in which monetary obligations can be expressed), and a mandatory means of payment for everyday purchases.

See:  Moody’s says Crypto regulation a plus for banks, fintechs

Cryptoassets are unlikely to catch on in countries with stable inflation and exchange rates, and credible institutions. Households and businesses would have very little incentive to price or save in a parallel cryptoasset such as Bitcoin, even if it were given legal tender or currency status. Their value is just too volatile and unrelated to the real economy.

Even in relatively less stable economies, the use of a globally recognized reserve currency such as the dollar or euro would likely be more alluring than adopting a cryptoasset.

A cryptoasset might catch on as a vehicle for unbanked people to make payments, but not to store value. It would be immediately exchanged into real currency upon receipt.

Then again, real currency may not always be readily available, nor easily transferable. Moreover, in some countries, laws forbid or restrict payments in other forms of money. These could tip the balance towards widespread use of cryptoassets.

Continue to the full article --> here

 


NCFA Jan 2018 resize - Cryptoassets as National Currency? A Step Too Far 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

Latest news - Cryptoassets as National Currency? A Step Too FarFF Logo 400 v3 - Cryptoassets as National Currency? A Step Too Farcommunity social impact - Cryptoassets as National Currency? A Step Too Far

FFCON21 ON-DEMAND VIDEOS NOW AVAILABLE!



FFCON21 on demand videos - Cryptoassets as National Currency? A Step Too Far

Support NCFA by Following us on Twitter!






 

Biden’s ‘Antitrust Revolution’ Overlooks AI—at Americans’ Peril

Wired | | Jul 27, 2021

AI - Biden’s ‘Antitrust Revolution’ Overlooks AI—at Americans’ PerilA handful of companies have outsize influence on the world’s artificial intelligence. Policymakers must act now to stem the rise of powerful monopolies.

Without intervention, AI could also help undermine democracy–through amplifying misinformation or enabling mass surveillance. The past year and a half has also underscored the impact of algorithmically powered social media, not just on the health of democracy, but on health care itself.

The overall direction and net impact of AI sits on a knife's edge, unless AI R&D and applications are appropriately channeled with wider societal and economic benefits in mind. How can we ensure that?

A handful of US tech companies, including Amazon, Alibaba, Alphabet, Facebook, and Netflix, along with Chinese mega-players such as Baidu, are responsible for $2 of every $3 spent globally on AI. They’re also among the top AI patent holders. Not only do their outsize budgets for AI dwarf others’, including the federal government’s, they also emphasize building internally rather than buying AI. Even though they buy comparatively little, they’ve still cornered the AI startup acquisition market.

See:  Nobel-winning Psychologist: ‘Clearly AI is going to win. How people are going to adjust is a fascinating problem’

Many of these are early-stage acquisitions, meaning the tech giants integrate the products from these companies into their own portfolios or take IP off the market if it doesn’t suit their strategic purposes and redeploy the talent. According to research from my Digital Planet team, US AI talent is intensely concentrated. The median number of AI employees in the field’s top five employers—Amazon, Google, Microsoft, Facebook, and Apple—is some 18,000, while the median for companies six to 24 is about 2,500—and it drops significantly from there. Moreover, these companies have near-monopolies of data on key behavioral areas. And they are setting the stage to become the primary suppliers of AI-based products and services to the rest of the world.

Biden's antitrust revolutionaries need a four-step plan to confront the AI revolution.

Antitrust authorities must first be forward-looking. They must recognize that the AI chess pieces being moved today will shape tomorrow’s endgame–particularly in a tech industry with high barriers to entry and early moves that are hard to reverse after scale. Tech antitrust action often occurs after it’s too late. Policymakers should also trace the outlines of multiple future AI scenarios, including a dystopian one. They must imagine, for example, a society that suffers from “algorithmic poverty,” in which users generate data as unpaid “labor,” which is used to train algorithms that in turn displace wage-producing labor.

See:  Lawmakers Take Aim at Big Tech with Push for Sweeping Overhaul of Antitrust

Policymakers must also separate AI applications that are value-enhancing for society, like speeding up scientific research, from others that might be value-destroying, like rapidly creating misinformation echo chambers, even if such developments are valuable for the firms bringing them to market. The economic impact can be broken down into the ways in which AI augments and substitutes existing activities and where it imposes negative social costs.  Such a framework can help regulators provide guidance and guardrails to AI development. Selective taxes, tax breaks, and credits and subsidies can nudge corporate decisionmakers in their investment choices.

Continue to the full article --> here


NCFA Jan 2018 resize - Biden’s ‘Antitrust Revolution’ Overlooks AI—at Americans’ Peril 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

Latest news - Biden’s ‘Antitrust Revolution’ Overlooks AI—at Americans’ PerilFF Logo 400 v3 - Biden’s ‘Antitrust Revolution’ Overlooks AI—at Americans’ Perilcommunity social impact - Biden’s ‘Antitrust Revolution’ Overlooks AI—at Americans’ Peril

FFCON21 ON-DEMAND VIDEOS NOW AVAILABLE!



FFCON21 on demand videos - Biden’s ‘Antitrust Revolution’ Overlooks AI—at Americans’ Peril

Support NCFA by Following us on Twitter!






 

Request for Comments by Oct 26, 2021: Canadian securities regulators propose streamlined capital raising option for Canadian-listed issuers

CSA | Jul 28, 2021

Raising capital burden reduction - Request for Comments by Oct 26, 2021:  Canadian securities regulators propose streamlined capital raising option for Canadian-listed issuersVancouver – The Canadian Securities Administrators (CSA) is proposing to introduce a new prospectus exemption for issuers listed on a Canadian stock exchange that is expected to provide a more efficient way for them to raise capital.

“We’ve heard from market participants that the time and cost to prepare a short form prospectus is a barrier to capital raising for many smaller issuers,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “The proposal would reduce regulatory burden, while maintaining robust investor protection.”

The proposed Listed Issuer Financing Exemption is expected to reduce costs for issuers raising smaller amounts of capital through the public markets. It would also allow smaller issuers greater access to retail investors and provide retail investors with a broader choice of investments.

The prospectus exemption would not be available to issuers that have been a reporting issuer for less than 12 months, nor to issuers that have not filed all continuous disclosure documents required under Canadian securities legislation. Eligible issuers would file a short offering document and the securities they issue would be freely tradeable. Under the proposed exemption, issuers could raise up to the greater of $5 million or 10 per cent of the issuer’s market capitalization, to a maximum of $10 million, annually.

See:

The proposed exemption is in response to comments received from CSA Consultation Paper 51-404 Considerations for Reducing Regulatory Burden for Non-Investment Fund Reporting Issuers. It also reflects research on capital raising requirements in other countries and other stakeholder feedback about the prospectus system.

CSA Notice and Request for Comment Proposed Amendments to National Instrument 45-106 Prospectus Exemptions to introduce the Listed Issuer Financing Exemption is available on CSA members' websites. Comments should be submitted in writing by October 26, 2021.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

Continue to the original release --> here


NCFA Jan 2018 resize - Request for Comments by Oct 26, 2021:  Canadian securities regulators propose streamlined capital raising option for Canadian-listed issuers 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

Latest news - Request for Comments by Oct 26, 2021:  Canadian securities regulators propose streamlined capital raising option for Canadian-listed issuersFF Logo 400 v3 - Request for Comments by Oct 26, 2021:  Canadian securities regulators propose streamlined capital raising option for Canadian-listed issuerscommunity social impact - Request for Comments by Oct 26, 2021:  Canadian securities regulators propose streamlined capital raising option for Canadian-listed issuers

FFCON21 ON-DEMAND VIDEOS NOW AVAILABLE!



FFCON21 on demand videos - Request for Comments by Oct 26, 2021:  Canadian securities regulators propose streamlined capital raising option for Canadian-listed issuers

Support NCFA by Following us on Twitter!






 

Binance CEO says he’s willing to step down as world’s biggest crypto exchange welcomes regulation

CNBC | Ryan Browne | Jul 27, 2021

changpeng zhao binance - Binance CEO says he’s willing to step down as world’s biggest crypto exchange welcomes regulation

The boss of cryptocurrency exchange Binance says he’s willing to step down from his role as the company seeks to become a regulated financial institution.

Speaking at a virtual press conference Tuesday, Changpeng “CZ” Zhao said he had no immediate plans to quit his role but that the company does have a succession plan in place.

“We’re going to pivot to be a fully regulated financial institution going forward,” Zhao told reporters, adding that, during that pivot, he would be “very open” to finding a replacement CEO with more regulatory experience.

Binance is the world’s largest digital currency exchange by trading volume. However, it has come under intense regulatory scrutiny lately as authorities around the world seek to clamp down on the fast-growing crypto industry.

See:  Bitcoin rises as UK financial watchdog bans Binance cryptocurrency exchange

In the U.K., the Financial Conduct Authority banned Binance’s British unit from undertaking any regulated activity. Binance was one of many crypto firms that withdrew their applications to the U.K.’s temporary licensing regime due to failing to meet anti-money laundering requirements, the FCA said.

Regulators in Japan, Canada and Italy have also clamped down on the firm, warning it is not authorized to operate in the countries.

Planning for the future

Binance aims to set up a number of regional headquarters around the world and will seek licenses wherever they are available, Zhao said. He has previously said Binance has no official headquarters.

Zhao insisted there were no immediate plans for his succession, adding Binance was “keeping our options open.”

“I’ll be honored to continue to run Binance as a regulated financial institution until we find somebody who may do a better job,” he said.

In May, Bloomberg reported that Binance was facing a federal investigation by the U.S. Department of Justice and Internal Revenue Service.

See:  More regulation coming: SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swaps

Binance said it couldn’t comment specifically on any ongoing discussions with regulators, whether in the U.S. or elsewhere.

On Monday, the company said it was reducing the maximum leverage — or borrowed funds — users can use to trade futures contracts, amid concerns such high-risk bets were leaving clients with hefty losses.

Earlier this month, Binance said it would no longer offer “stock tokens,” digital digital versions of shares like Tesla, Apple and Coinbase, to shift its commercial focus to other products. German regulators had warned the instruments may have violated securities laws.

Continue to the full article --> here


NCFA Jan 2018 resize - Binance CEO says he’s willing to step down as world’s biggest crypto exchange welcomes regulation 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

Latest news - Binance CEO says he’s willing to step down as world’s biggest crypto exchange welcomes regulationFF Logo 400 v3 - Binance CEO says he’s willing to step down as world’s biggest crypto exchange welcomes regulationcommunity social impact - Binance CEO says he’s willing to step down as world’s biggest crypto exchange welcomes regulation

FFCON21 ON-DEMAND VIDEOS NOW AVAILABLE!



FFCON21 on demand videos - Binance CEO says he’s willing to step down as world’s biggest crypto exchange welcomes regulation

Support NCFA by Following us on Twitter!






 

More regulation coming: SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swaps

Market Insider | Camomile Shumba | Jul 22, 2021

gary gensler  - More regulation coming:  SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swapsThe US Securities and Exchange Commission's chair, Gary Gensler has indicated stablecoins and other security-backed tokens will not be exempt from the regulator's upcoming rule changes.

Gensler told the American Bar Association Derivatives and Futures Law Committee's virtual mid-year program on Wednesday that stablecoin issuers would need to register with the regulator and ensure certain levels of transparency in how they transact.

"Make no mistake: It doesn't matter whether it's a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities," Gensler said. "These platforms - whether in the decentralized or centralized finance space - are implicated by the securities laws and must work within our securities regime," he said.

Stablecoins, which are crypto coins pegged to an asset such as the dollar, such as Tether, have come under greater scrutiny from regulators given their potential for destabilizing payments systems.

See:  Moody’s says Crypto regulation a plus for banks, fintechs

Transparency is a big topic in the crypto-space as digital tokens are popular, in part because of their decentralized nature, and the relative anonymity they afford their users.

But the US regulator has started to clamp down on some aspects of the crypto market to prevent the use of these coins in illicit activities, such as money laundering. The SEC also sued Ripple Labs late last year over sales of its network's XRP token, which the regulator said should be treated as a security and not a currency.

Gensler said greater transparency would mean that, even for over-the-counter swaps deals, the public would be able to see both the price and the volume at which these transactions took place.

He said that for a company to register a stablecoin, it would have to have solid back-office controls and adequate cushions against losses, through both its own capital reserves and customer margin.

See:  Crypto in Canada: Where are we today, and where are we heading?

On top of that, the Genlser said the SEC will require companies to have a host of new counterparty requirements for capital and margin, including internal risk management systems, supervision and chief compliance officers, trade acknowledgement and confirmation, record-keeping and reporting procedures.'

Continue to the full article --> here


NCFA Jan 2018 resize - More regulation coming:  SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swaps 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

Latest news - More regulation coming:  SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swapsFF Logo 400 v3 - More regulation coming:  SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swapscommunity social impact - More regulation coming:  SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swaps

FFCON21 ON-DEMAND VIDEOS NOW AVAILABLE!



FFCON21 on demand videos - More regulation coming:  SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swaps

Support NCFA by Following us on Twitter!






 

Moody’s says Crypto regulation a plus for banks, fintechs

Investment Executive | James Langton | Jul 19, 2021

US federal reserve - Moody's says Crypto regulation a plus for banks, fintechsFederal Reserve’s plans for stablecoins could bring transparency and safety to the sector

U.S. banking regulators increasing their oversight of stablecoins would be a positive for banks and fintechs, says Moody’s Investors Service.

U.S. Federal Reserve Board Chair Jerome Powell discussed stepping up regulation of stablecoins in Congressional testimony last week. Among other things, he said  the Fed intends to publish a white paper in early September about digital assets including stablecoins, central bank digital currencies (CBDCs) and others.

See: 

Stablecoins are a form of digital asset whose value is linked to an underlying asset, such as U.S. dollars, in an effort to increase their appeal as a method payment and a store of value while providing the benefits of digital assets.

The prospect of greater oversight of stablecoins would be positive for banks, Moody’s said, “because it would help to increase safety and transparency around stablecoins and may limit some of the risks to financial stability and the potential competitive threats posed by the currently unregulated stablecoin industry.”

However, Moody’s said there’s little regulation around stablecoins. Without rules on disclosure or how the reserves that are backing stablecoins can be invested, “there is no guarantee that stablecoins are indeed backed by the equivalent value in assets,” it said.

The U.S. Office of the Comptroller of the Currency (OCC) has issued guidance for banks, which allows them to hold stablecoin reserves “if they can verify that the reserves are equal to outstanding stablecoin tokens to help withstand large client outflows,” it said.  “However, crypto currency firms issuing stablecoins are not required to follow OCC guidance, and no other enforceable regulation exists,” Moody’s said.

Continue to the full article --> here


NCFA Jan 2018 resize - Moody's says Crypto regulation a plus for banks, fintechs 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

Latest news - Moody's says Crypto regulation a plus for banks, fintechsFF Logo 400 v3 - Moody's says Crypto regulation a plus for banks, fintechscommunity social impact - Moody's says Crypto regulation a plus for banks, fintechs

FFCON21 ON-DEMAND VIDEOS NOW AVAILABLE!



FFCON21 on demand videos - Moody's says Crypto regulation a plus for banks, fintechs

Support NCFA by Following us on Twitter!






 

Bank of Canada (Aug 13 Deadline): Retail Payment Advisory Committee is Seeking New Members

Bank of Canada | Jul 22, 2021

Retail payment systems - Bank of Canada (Aug 13 Deadline): Retail Payment Advisory Committee is Seeking New Members

Retail Payment Advisory Committee

The Retail Payment Advisory Committee is seeking new members. Find out why, who is eligible and how to apply.

In 2020, the Bank of Canada established the Retail Payments Advisory Committee (RPAC) to solicit advice and expertise from industry members of the retail payments ecosystem. The Retail Payment Activities Act received Royal Assent on June 29, 2021, and the Bank of Canada is looking for new members for RPAC.

Read more about RPAC’s mandate and their past meetings.

Responsibilities

Members will attend approximately six meetings over a 12-month period, where they will be able to:

  • discuss supervisory topics
  • share best practices
  • raise organizational or industry concerns
  • provide potential solutions

See:  Bank of Canada to become new regulator of fintech companies doing payments processing

Eligibility

The Bank will choose RPAC members from a broad spectrum of the payments industry that represents different sizes, maturities and scopes. This will help the Bank gain advice and expertise from a representative selection of industry members. We invite payment service providers to submit an expression of interest to join RPAC for the upcoming term.

Deadline for submissions

Submissions will be accepted until August 13, 2021. The Bank will contact the entities selected for further information.

 


NCFA Jan 2018 resize - Bank of Canada (Aug 13 Deadline): Retail Payment Advisory Committee is Seeking New Members 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

Latest news - Bank of Canada (Aug 13 Deadline): Retail Payment Advisory Committee is Seeking New MembersFF Logo 400 v3 - Bank of Canada (Aug 13 Deadline): Retail Payment Advisory Committee is Seeking New Memberscommunity social impact - Bank of Canada (Aug 13 Deadline): Retail Payment Advisory Committee is Seeking New Members

FFCON21 ON-DEMAND VIDEOS NOW AVAILABLE!



FFCON21 on demand videos - Bank of Canada (Aug 13 Deadline): Retail Payment Advisory Committee is Seeking New Members

Support NCFA by Following us on Twitter!