Global Digital Asset Digest: December 2023

Welcome to the final Global Digital Assets Digest of the year. In this edition, we have a raft of consultations from the EBA in relation to the implementation of MiCA. There are also important speeches from officials at BIS. In the UK, there is an important report on fund tokenisation, as well as the consultation outcome in relation to the Digital Securities Sandbox. Following on from the Fintech festival in Singapore, MAS has put out a number of important communications. To cap off an eventual year, we have testimonies from officials at federal banking agencies before US congressional committees.

Updates and Guidance: International Bodies

1. EBA: Consultation paper on the requirements for policies and procedures on conflicts of interest for issuers of ARTs

On 7 December 2023, the EBA published aconsultation paperon draft RTS concerning policies and procedures for managing conflicts of interest by issuers of ARTs. These concern those conflicts that could arise between the issuers of ARTs and a defined list of connected parties, as well as between the issuers of ARTs and the holders of ARTs.

Areas covered include:

• conflicts of interest concerning the issuer's management of the reserve of assets; and
• the role of the management body in defining and adopting conflicts of interest policies and procedures.

2. EPC: Blog: The Finnish payment landscape: a digitalised society with one of the most developed payments ecosystem in the world

On 1 December 2023, the EPC published ablogin relation to the payments sector in Finland. The blog describes Finland as a frontrunner in payment digitalisation, citing key statistics.

Key areas covered:

• Main characteristics of current payment landscape of Finland.
• Barriers to fostering instant payments in Finland.
• Development of Finnish payment landscape over the next five years.

3. FSB: The Financial stability implications of multifunction cryptoasset intermediaries

On 28 November 2023, the FSB issued areporton financial stability implications on multifunction cryptoasset intermediaries (MCI). The term relates to firms/groups of affiliated firms combining crypotasset services products and functions. The report states that many MCIs operate their platforms primarily via a single entry point, but often have affiliated entities and subsidiaries in a number of countries and are often incorporated in offshore financial centres. The report: considers the structure and functioning of MCIs, assessing the relevant financial stability risks.

Key points

• Vulnerabilities associated with MCIs can be found in traditional finance, and include liquidity mismatch, technology and operational vulnerabilities and interconnections.
• Combinations of functions can heighten vulnerabilities; MCIs undertaking proprietary trading, market making on their own trading venues can lead to higher leverage.
• 注意力应该放在linkag的潜力es between MCIs and financial institutions through reliance on each other's services and through MCI-issued stablecoins backed by traditional financial assets.
• The FSB should assess: whether existing standards and rules adequately cover risk posed by MCI functions being combined; and the lack of proper governance and conflicts of interest issues.

4. BIS: Speech by Cecilia Skingsley "Shaping the future financial system in the public interest"

On 28 November 2023, BIS published a keynote speech by Ms Cecilia Skingsley, Head of the BIS Innovation Hub, concerning innovation and the future of CBDCs, as well as the role of international standards.

Key points

• Digitalisation of societies presents risks as well as opportunities.
• Designing the future financial system poses issues around privacy, choice, inclusion and innovation. Current infrastructures need to be upgraded and objectives such as financial inclusion, efficiency and resilience need to be met.
• A dismissive attitude towards CBDCs might result in missed opportunities to provide better and cheaper services.
• BIS Innovation Hub is looking on several aspects of the CBDC.
• With the right infrastructure in place, CBDCs should not worsen the type of bank digital runs experienced during 2023.
• Wholesale CBDCs are at a more advanced stage than retail CBDCs when it comes to cross-border payments. Benefits from issuing wholesale CBDC include operational transparency; faster settlement and less risk.
• BIS is advocating for a unified ledger, a common platform bringing together central bank money as the settlement asset, tokenised deposits and tokenised assets.
• Tokenisation offers the possibility to encode policy and regulatory requirements into a common protocol for cross-border use cases e.g. for AML.

Existing standards relevant for CBDCs are: legal and regulatory standards; payments-specific technology and operational standards (e.g. message format and communication protocols); and cross cutting technology standards with general application beyond just digital currencies.

5. EBA: Consultation paper: Guidelines on Travel Rule for cryptoasset transfers under the recast Wire Transfer Regulation

On 24 November 2023, the EBA issued aconsultation paperon guidelines preventing the abuse of funds and certain cryptoasset transfers for money laundering and terrorist financing under the recast Wire Transfer Regulation. The Recast Wire Transfer Regulation brings transfers of crytpoassets within scope of the FAFT rules. The Regulation also brings CASPs within scope of the same AML/CFT system and control requirements under MLD4

概述的步骤是通过私人参建的指导方针, Intermediary PSPs, CASPs and Intermediary CASPs, to detect missing or incomplete information accompanying transfer of funds or cryptoassets.

The closing date for comments is 26 February 2024.

6. BIS: Keynote speech by Mr Agustín Carstens, General Manager of the BIS, at the CBDC & Future Monetary System Seminar

On 23 November 2023, BIS published aspeechby Augustín Carstens, General Manager of the BIS, at the CBDC & Future Monetary System Seminar, Seoul, Korea. The speech focuses on the financial system of the future.

Key points

• Some of the issues facing the financial system are a result of the siloed and piecemeal approach to change, consisting of tweaks to existing processes and systems. A quantum leap is needed, rather than incremental fixes.
• 未来的货币体系需要批发中心bank money at its core, complemented by tokenised commercial bank money and potentially other tokenised assets.
• BIS considers its unified leger proposal as a vehicle for bringing together transactions and operations among markets and financial services onto shared programmable platforms.
• The Bank of Korea's CBDC project fits with the vision of the future monetary system

7. UK-Japan Financial Dialogue and Financial Regulatory Forum Joint Statement

On 27 November 2023, the UK-Japan Financial Dialogue and Financial Regulatory Forum Joint Statement published ajoint statementin respect of the 5th Financial Dialogue and the 2nd Financial Regulatory Forum held in November 2023. A range of topics were discussed including commitment by both UK and Japan to implement sets of recommendations fromIOSCOand theFSBin relation to crypotassets. Also discussed was the UK’s proposed regulatory framework for stablecoins (see Ashurst briefinghere); Japan’s regulatory framework for stablecoins; retail CBDCs; and the IMF Handbook on CBDC.

8.国际货币基金组织的博客:央行数字货币发展ment Enters the Next Phase

On 20 November 2023, the IMF published ablogon development of CBDC. The blog refers to a recent speech by IMF Managing Director, Kristalina Georgieva, at the Singapore Fintech Festival arguing for systematic and careful approach to exploring a CBDC. The blog notes that more than 100 countries are in the exploration stage of a CBDC. It refers to the IMFCBDC handbook, which is intended to serve as a source of knowledge and insights in relation to CBDCs.

Chapters published

• How Central Banks Explore Central Bank Digital Currency
• A Guide to Central Bank Digital Currency Product Development.
• Implications of Central Bank Digital Currencies for Monetary Policy Transmission.
• Implementing Capital Flow Management Measures with CBDC.
• Central Bank Digital Currency's Role in Promoting Financial Inclusion.

The IMF confirms that its engagement with central banks will continue and that the impact of CBDC on areas such as cybersecurity and cross border payments will continue to be assessed.

9. ECB: Slides: The digital euro: a digital form of cash

On 17 November 2023, the ECB published aset of slideson the digital euro. These set out background to the digital euro; the key stages; the unique characteristics of the digital euro; and digital money. A legislative proposal in respect of the digital euro was published in July 2023 (please see our briefinghere).

10. IOSCO: Policy recommendations for crypto and digital asset markets

On 16 November 2023, IOSCO published itsfinal reportpolicy recommendations aimed at the activities of CASPs. The recommendations, which are intended to complement existing IOSCO guidance cover six areas: conflicts of interest arising from vertical integration of activities and functions; market manipulation, insider trading and fraud; custody and client asset protection; Cross-border risks and regulatory cooperation; operational and technological risk; retail distribution. CASPs and all participants in cryptoasset sector are advised to observe the guidance when carrying out their activities.

11. BIS: Speech "The future of money: a possible role for central bank digital currencies and their implications"

On 9 November BIS published aspeechdelivered by Alexandre Tombini, Chief Representative, Representative Office for the Americas, on the possible role for CDBCs. With a special focus on the Caribbean and the Americas, the speech examines: the potential role of CBDCs in a continually changing financial landscape; the benefits that digital payments offer to society; the role of CBDCs in supporting policy objectives; and initiatives in the Caribbean and across the Americas.

Key issues

• Digital payments are rapidly increasing in the Americas and are driven by private sector innovation. The cost of domestic payments is still high.
• There has been ground-breaking work in the Caribbean in relation to CBDCs, with the launch of the world’s first live CBDC, the Sand Dollar, in 2021. Underlying drivers vary across regions.
• Some CBDCs launched in the region have sought to minimise associated risks (such as disintermediation and digital runs) by introducing transaction limits. This is a feature of CBDCs such as the DCash, the Sand Dollar and JAM-DEX.
• Many stakeholders view retail CBDCs and retail fast payment systems as complementary choices.

12. EBA: Consultations on RTS for liquidity requirements and draft guidelines on liquidity stress testing under MiCA

On 8 November 2023, the EBA issued three consultations on draft RTS, as well as guidelines under MICA. These form part of deliverables under MICA relating to prudential aspects.

• RTS on liquidity requirements of the reserve of assets．Article 38(1) of MICA requires the investment of the proceeds received from the issuance of the tokens to be done inhighly liquid financial instrumentscarrying minimal market risk, credit risk and concentration risk. The highly liquid financial instruments must allow for rapid liquidation with minimal adverse price effect, so as be to able respond rapidly to redemption requests from token holders. The RTS builds on the 2022 Basel standards on the prudential treatment of cryptoassets exposures, as well as the LCR Delegated Regulation.
• RTS on highly liquid financial instruments in the reserve of assets．Under MICA, issuers of asset-referenced tokens are required to have a reserve of assets. TheEBAsuggests minimum percentage rates of the reserve of assets with a maturity of no longer than between 1 and 5 working days. The EBA also proposes overall techniques for liquidity management of the reserve of assets (including minimum creditworthiness), as well as the specific amount of deposits with credit institutions to be held by issuers.
• RTS on the minimum content of the liquidity management policy and procedures of relevant issuers of tokens．Under MiCA, issuers of significant ARTs are required to have a liquidity management policy and procedure. TheseRTSensure relevant issuers properly monitor their liquidity needs, and that reserve assets have a resilient liquidity profile.
• Guidelines to establish the common reference parameters of the stress test scenarios to be included in their liquidity stress testing．Theseset outthe risks to be covered in the liquidity stress testing, as well as the methodology for identifying the common reference parameters of the stress test scenarios to be included in the liquidity stress testing.

The deadline for consultations is 8 February 2024.

13. EBA: Consultations on RTS on own funds requirements under MiCA

On 8 November 2023, the EBA issued consultations on respect of own fund requirements and stress testing of issuers under the under MiCA. Own funds requirement for issuers of ARTs under MiCA require own funds equal to an amount of at least the highest of: EUR 350.000; 2% of the average amount of the reserve assets; a quarter of the fixed overhead of the preceding year.

• Draft RTS on own funds requirements and stress testing of issuers of ARTs and EMTs under MiCA．云母授权主管机关增加own funds requirements for an issuer deemed to have higher degree of risk. Thefirst RTSspecify the adjustment of own funds requirements and stress testing of issuers. The draft RTS also provide general rules to be followed by issuers for the design, implementation and use of stress testing programmes and methodology. The rules aim to ensure a minimum level of consistency between issuers while maintaining proportionality.
• Timeframe RTS．These RTSspecifythe procedure and timeframe for an issuer to adjust to higher own funds requirements when this is deemed to have a higher degree of risk, the criteria for competent authorities to follow during the assessment of such a higher degree of risk and the minimum requirements for the design of the stress testing programmes.

14. EBA: Consultations on the reporting of transactions with ARTs and EMTs denominated in a non-EU currency under MiCA

On 8 November 2023, the EBA issued consultations in respect of RTS and ITS concerning the reporting of transactions with ARTs and EMTs denominated in a non-EU currency under MiCA. To assist with the monitoring and supervising of the use of ARTs and of EMTs denominated in a non-EU currency, MICA imposes reporting obligations on issuers and on CASPs. The data assists the EBA in assessing whether an ART or EMT denominated in a non-EU currency meets the criteria in Articles 43(1) and 56(1) of MiCA to be classified as significant.

• RTS: Thedraft RTSoutline the methodology to be applied by issuers for reporting. This includes the method for estimating the number and value of transactions, and the criteria for reporting these transactions per single currency area.
• ITS: Thedraft ITSestablish standard forms, formats and templates for the purpose of reporting under article 22 of MICA and for reporting by CASPs to the issuer in accordance with article 22(3).

15. EBA: consultation on guidelines for recovery plans under MiCA

On 8 November 2023, the EBA issued aconsultation paper包含指南草案波形的恢复计划r MiCA. MiCA requires issuers to develop and maintain a recovery plan to assist in preparing for adverse scenarios that may affect their ability to comply with the regulatory requirements applicable to the reserve of assets. The guidelines recovery plan set out the format and contents of the recovery plan.

The deadline for comments is 8 February 2024.

16. EBA: Consultation on supervisory colleges under MiCA

On 8 November 2023, the EBA issued aconsultation papercovering RTS for supervisory colleges. MiCA requires the EBA to establish a consultative supervisory college for issuers of a significant ART and for issuers of EMTs.

The RTS: set out the criteria for determining the composition of supervisory colleges; and specify the general conditions for the functioning of supervisory colleges under MiCA.

The deadline for comments is 8 February 2024.

17. EU instant payments proposal: Provisional agreement reached

On 7 November 2023, EU co-legislatorsannounced在r中,他们已经达成了一项临时协议elation to the proposal for a regulation on instant credit transfers in euro. The proposal was introduced by the European Commission in October 2022 and seeks to modernise the single euro payments area (SEPA) Regulation. Among other things, the proposal seeks to make instant euro payments universally available and affordable, as well as remove friction in the processing of instant euro payments.

18. IMF: Report on central bank digital currency stakeholder engagement

The IMF has published a report in relation to CBDCs in Peru following its third engagement exercise with the Central Bank of Peru (BCRP) in relation to strategic and policy matters in relation to a CBDC. The BRCP should maintain an agile program, implementing effective change and risk management practices; BCRP should increase clarity on the baseline product design, achieved through further interactive engagements; and the CBDC strategy should be elevated to the national level.

Updates and Guidance: UK

19. Speech by Mark Pelling, KC: Issues in Crypto Currency Claims

On 7 December 2023, aspeechby HHJ Pelling KC was published in respect of current trends and issues in relation to claims concerning cryptoassets. The speech refers to important publications, such as the Legal Statement on Crypto assets and Smart Contracts published by the UK Jurisdiction Taskforce in November 2019; and the Law Commission Paper Digital Assets; Final report” (see our briefing here) The speech provides an overview of cryptofraud claims, discussing issues such as the identification and jurisdiction in respect of those that have engineered the fraud; and issues related to proprietary claims (e.g. location of the cryptoassets and service).

For more on issues concerning cryptoassets litigation.

20. FMLC: Minutes of FMLC Meeting – 12 October 2023

On 4 December 2023, the FMLC published theminutesin respect of a meeting it held in 12 October 2023. The meeting covered a number of areas including work by the FMLC Working Group in relation to law commission publications concerning digital assets; an update on the FMLC's Working Group on the treatment of DAOs under English law; and the response to HM Treasurys February 2023 consultation on the legislative framework for cryptoassets (see our briefingshereandhere).

21. Investment Association: Interim Report from the Technology Working Group to the Asset Management Taskforce on fund tokenisation

On 24 November 2023, Technology Working Group – a body established by the Economic Secretary to the Treasury’s Asset Management Taskforce to assess the impact of new technology on the asset management sector - published areporton fund tokenisation. Benefits of tokenisation cited in the report include: simplification of books and records, including reconciliations; reducing fund administration costs; and quicker settlement and reduced temporary liquidity funding.

The report outlines a staged approach to fund tokenisation, starting with baseline model in which FCA authorised funds, in scope of existing legal and regulatory regimes and holding traditional assets, use DLT for sales and redemption transactions. The IA notes that future stages may require legislative or regulatory rule changes. In respect of future stages, the Group recommends: industry develop the details of further stages of fund tokenisation; the industry looks into wider industry access to the RTGS service and enabling funds settlement in digital central bank money; collaboration with HMT to identify barriers in legislation for holding digital investible asset; building awareness of the digital identity legal framework set out in future UK legislation.

TheGovernmentand theFCAissued statements welcoming the report.

22. HM Treasury: Consultation Outcome: Consultation on the Digital Securities Sandbox

On 22 November 2023, HM Treasury published theoutcometo its July 2023 consultation on digital securities sandbox.

The DSS will be the first Financial Market Infrastructure Sandbox set up under the powers given to the Government in FSMA 2023 (see our briefinghere). The Government confirms that it intends to adopt the approach outlined in the consultation and will lay a statutory instrument to implement the DSS. The BoE and the FCA are expected to will set out the application process, as well guidance and rules for the DSS.

Notable points

• All relevant assets currently in scope of the regulatory perimeter, except for derivatives, are capable of being included in the DSS (derivatives are excluded from the DSS because derivatives-focused legislation does not form part of in-scope legislation under the DSS regime).
• 资产可以发布/交易/选定了一个规范ific entity in the DSS will be set out as part of the Sandbox Approval Notice issued to each Sandbox Entrant.
• The drafting of the SI leaves it open for a digital sovereign debt instrument to possibly be included in the future should the Government deems this to be desirable.
• The DSS is to be designed so that if can should be flexible enough to accommodate different structures. This will be achieved by providing the BoE with some powers in relation to the requirements for being a Digital Securities Depository, with some regulations in UK CSDR being converted into regulator rules within the DSS.
• For trading venues, the Government is not planning to widen the scope of activities beyond notary, settlement, maintenance and operating a trading venue.
• Digital assets issued/settled/traded in the DSS should in principle be capable of being utilised across markets, for example as collateral or as part of repo transactions.

23. Future of Payments Review: Report

On 22 November 2023, thereporton the future of payments was published. The report aims to provide a high-level, strategic view of the digital payments landscape. The report argues that UK has a fairly mature digital wallets environment, and a well-developed regulatory environment. The report's chief recommendation is that the Government develop a national payments strategy focusing on: the criticality of payments to consumers and the economy; and the highly interdependent nature of the payments arena.

24. House of Commons : Question on privacy and UK CBDC

On 13 November 2023, the House of Commons published aquestionposed by Conservative MP, David Davis, in relation to the potential impact of a UK CBDC on the right to privacy. The response stresses the importance of individuals’ privacy, user control and the proper use of data. It states that neither the Government nor the Bank of England would have access to personal data, nor be able to see how consumers use their money.

Updates and Guidance: Europe

25. Deutsche Bundesbank: Speech of Burkhard Balz on the project digital euro

On 30 November 2023, Burkhard Balz, Member of the Executive Board of the German Central Bank (Deutsche Bundesbank), delivered a speech on the digital euro at the European Finance Forum e.V.

Balz explained how the onboarding, i.e. the access to the digital euro, will be realized. Mr Balz notes that the current idea is that anyone who currently has a bank account could be eligible. The speech discusses the following options for the convenient use of the digital euro: banks and other payment service providers could integrate the digital euro into their existing mobile banking applications; or intermediaries could offer their customers an app specially developed by the Eurosystem. Payment would then be made contactless or using QR codes. Balz also emphasized the importance of digital participation and that financial inclusion should not be confused with digital inclusion. For this purpose, the app should be made as simple and inclusive as possible and an additional physical payment card should be provided for those who do not own a smartphone.

26. BaFin: Guidance notice on electronic securities registration business

On 23 November 2023, BaFin published a guidance notice on electronic securities registration business (Merkblatt für die Kryptowertpapierregisterführung (03/2023)).

The guidance notice is addressed to all market participants and contains information on the interpretation and licensing requirements of electronic securities registration business. Since electronic securities registration business qualifies as a financial service under the German Banking Act (Kreditwesengesetz, KWG), the guidance notice helps to differentiate its interpretation from the other financial services and banking activities under the KWG.

Updates and Guidance: APAC

27. MAS: Statement on FinTech Festival 2023

On 24 November 2023, MAS published astatementin relation to the eighth Singapore FinTech Festival (SFF). This states that the event drew 66,000 participants with participants hailing from 150 countries and regions and attracted a line-up of over 970 speakers.

28. MAS: Response document on consultation concerning regulatory-measures-for-digital-payment-token-services

On 23 November 2023, MAS published aresponsein respect of its October 2022 consultation on proposed regulatory measures for licensees and exempt payment service providers providing a digital payment token service under the Payment Services Act 2019. The consultation focused on business conduct and measures to limit potential consumer harm. It also proposed minimum technology and cyber risk management requirements for DPT service providers. MAS confirms guidance in relation to business conduct includes: MAS confirms that it will issue guidance for DPT service providers concerning conflicts of interest; the listing of a DPT; and customer complaints. The regulatory measures on DPT services are to be implemented in a phased approach from 2024 via regulations and guidelines.

MAS published thefirst collection咨询回答并提出立法amendments concerning customer asset segregation and custody requirements in July 2023.

29. MAS: Launch of Cross-border QR Payments Linkage between Indonesia and Singapore

On 17 November 2023, MAS publisheddetailsin relation to a cross-border quick response (QR) payment linkage between Indonesia and Singapore. This initiative enables customers of participating financial institutions to make cross-border retail payments by scanning QRIS (Quick Response Code Indonesian Standard) or NETS QR codes displayed by merchants. The initiative forms part of wider efforts by the two countries to promote greater integration and increase economic connectivity.

The statement also confirms that a letter of intent has been signed between the Bank of Indonesia and MAS to establish a local currency settlement framework, with a view to facilitate the settlement of cross-border payments (including QR payments).

30. MAS: Launch of Cross-border Real-time Payment Systems Connectivity between Singapore and Malaysia

In November 2023, MAS published astatementin respect of the launch of the real-time payment systems linkage between Singapore’s PayNow and Malaysia’s DuitNow. MAS explains that PayNow-DuitNow linkage enables instant P2P fund transfers and remittances between the two countries and is the first to include the participation of non-bank financial institutions from both countries. The initiative is the result of collaboration between the central banks, payment system operators and participating financial institutions of both countries. MAS confirms that the initiative is aligned with the objectives of the ASEAN Payment Connectivity Initiative and the G20 Roadmap for Enhancing Cross-border Payments.

Updates and Guidance: Australia

31. Australian Government: New licensing framework for payment functions

In December 2023, the Australian Government released aproposal papertitled "Payment System Modernisation (Regulation of Payment Service Providers)". The paper follows thefirst consultation paperreleased in June 2023 that sought feedback on the proposed list of payment functions to be regulated under the Government's proposed new licensing regime.

The framework proposes that payment system providers who undertake the various functions will be captured under the current Australian Financial Services regime, including (but not limited to):

• Stored-value facilities (SVFs)– These are services that enable customers to load funds onto a facility for the purpose of making future payments. Customers can direct the movement of these funds for the purposes of paying for goods or services, transferring those funds to another person, or to withdraw funds.
  Examples: Digital wallets that store value, value stored on online accounts, virtual or physical pre-paid cards.
• Payment stablecoins (payment stablecoin SVFs)– Payment stablecoins are a subset of stablecoins that aim to maintain a stable value with reference to a fiat currency. The framework proposes that payment stablecoins will be regulated as a type of SVF.
  Examples: Payment stablecoin issuers.
• Payment initiation and facilitation services– These are services which facilitate the initiation of a payment transaction at the request of the customer with respect to a payment account or facility held by another payment service provider or some other source of value or credit facility.
  Examples: PayTo services, recurring payments initiated by a third party, direct debit/credit card services.
• Payment technology and enablement services– These are payment specific services provided by third parties that enable payments to be made. These services enable a transfer of funds to occur but do not enter possession or control of the funds.
  Examples: Passthrough digital wallets (i.e., where the "wallet" is acting as a proxy, such as with Google Pay or Apple Pay).

Notably, the framework proposes different and separate treatment of Payment Stablecoin (PSC) arrangements compared to traditional SVF facilities. This is because, in relation to stablecoins (or any token-based system), the business responsible for the issuance and redemption of entitlements has no role in facilitating the transactions that take place in relation to the associated token. Rather, the transaction is facilitated by a third-party service provider. The framework therefore proposes that regulation of PSC arrangements will focus on those businesses and only to the extent that issuance and redemption of entitlements are involved.

The proposed regulations and obligations for PSC facilities will otherwise largely replicate those that apply to traditional SVFs, including the holding of client monies, disclosure obligations, and the general and conduct obligations that attach to Australian Financial Services Licence (AFSL) holders. The proposed framework for regulating PSC tokens will also rely on the digital asset facility framework, (as per theGovernment's consultation paper released in October 2023), which covers third-party intermediaries holding tokens on behalf of customers.

Consultations close 3 February 2024. The Australian Government intends to introduce legislation for the payments licensing regime in 2024.

Updates and Guidance: North America

32. OCC: Statement of official before House of Representatives committee

On 5 December 2023, the OCC published thewritten statementof Donna Murphy, Deputy Comptroller for Compliance Policy and Acting Deputy Comptroller for the Office of Financial Technology. Ms Murphy appeared before the Subcommittee on Digital Assets, Financial Technology and Inclusion, Committee on Financial Services of the U.S. House of Representatives. Ms Murphy refers to the Responsible Innovation Framework and the work of the OCC’s Office of Financial Technology, noting that the OCC’s current areas of focus include matters involving bank-fintech partnerships, digital assets and tokenization. She refers to the OCC's careful and cautious adopted by the OCC in relation to digital assets sector, noting that some OCC supervised banks have publicly launched cryptoasset products.

33. OCC: Testimonies of Michael J. Hsu, Acting Comptroller of the Currency, before the Congressional Committees

On 14 November 2023, the OCC published thewritten testimonyof Michael J. Hsu, Acting Comptroller of the Currency, before the US Senate's Committee on Banking, Housing, and Urban Affairs. The OCC also published thewritten statementprovided to the House of Representatives' Committee on Financial Services. The written statement provides an update on the state of the federal banking system, the OCC’s work to advance the four critical agency priorities initiated under Mr Hsu, and recent key regulatory developments. The statement notes increased attention being placed on the potential tokenisation holds for financial transactions. The statement confirms that the OCC will host a public symposium on tokenization to review developments and promote public debate.

The OCC published its 2023Annual Reporton the condition of the federal banking system in December 2023.

34. FDIC: Remarks by Chairman Martin J. Gruenberg Before the Committee on Banking, Housing, and Urban Affairs, United States Senate

On 14 November 2023, the FDIC published the testimony of FDIC Chairman Martin J. Gruenberg at the hearing of the Senate Committee on Banking, Housing, and Urban Affairs. The hearing brought representatives the heads of the four federal agencies from US regulatory authorities to discuss events in the financial services industry. Mr Gruenberg provided an overview of the FDIC's work protecting insured deposits and discusses the lessons learned from the regional bank failures in 2023. Mr Gruenberg also spoke about the risks posed by cryptoassets to the banking sector, noting that the FDIC and other federal banking agencies have adopted measures in this regard, including an April 2022letterfrom the FDIC seeking information from FDIC-supervised institutions engaged in, cryptoasset-related activities.

35. CFTC Releases FY 2023 Enforcement Results

On 7 November 2023, the CFTC published astatementon enforcement results for Fiscal Year 2023, confirming that the CFTC’s Division of Enforcement filed 96 enforcement actions on a number of areas, including digital assets. The CFC cites key events such as litigation victory against a DAO l and litigation involving cross-market manipulation in blockchains.

Update and Guidance: Middle East

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Press/ Articles

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Contributors: Julian Pipolo, Ankita Rao, Tobias Bauerfeind, Cornelius Hille, Victoria Meyer, Gréta Müller