Clifford Chance

Welcome to this week's global fintech round-up, summarising fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events. Watch the video here to hear more.

Details of these and previous developments can also be found on our Fintech Topic Guide on the Clifford Chance Financial Markets Toolkit.

You are welcome to share the round-up with colleagues who may like to subscribe.

CLIFFORD CHANCE PUBLICATIONS AND MATERIALS

Clifford Chance briefing – New York Department of Financial Services issues ransomware guidance in wake of increased attacks

Clifford Chance briefing – Central bank digital currencies (CBDCs) and the theory of money

SPOTLIGHT: 

An introduction to Privacy-enhancing technologies (PETs)

Gartner's influential global Top 10 Strategic Technology Trends lists PETs (technologies that help mitigate privacy risk and ensure data protection compliance) as a key focus for 2021. In May, the UK Information Commissioner's Office launched a consultation on draft PETs guidance. But, what exactly are they and how are businesses using them?

GLOBAL LEGAL AND REGULATORY UPDATES

International

• (7 Jul 2021) Organisation for Economic Co-operation and Development consultation on proposed high-level guidance on policy considerations for responsible innovation and adoption of blockchain and distributed ledger technology. Responses are due by 31 August 2021. | Consultation webpage
• (5 Jul 2021) Bank for International Settlements report, which contains a cross-country analysis of the regulation of non-bank payment service providers, particularly in the context of the digital payment and e-money services they offer. | Press release
• (5 Jul 2021) Financial Action Task Force (FATF) report setting out the findings from its second annual review of the implementation of its revised standards on virtual assets and virtual asset service providers. | Press release
• (1 Jul 2021) FATF stocktake report on the use of data pooling and collaborative analytics by financial institutions to better understand and mitigate money laundering and terrorist financing (AML/CFT) risks. | Press release
• (1 Jul 2021) FATF report on the opportunities and challenges posed by new technologies for activities related to AML/CFT. Alongside the report, FATF has published its recommendations for the public and private sector on actions they can take to support positive and responsible use of new technologies for AML/CFT activities. | Press release

Americas

US:  

• (30 Jun 2021) Joint resolution signed by President Joe Biden, which revokes a regulation of the Office of the Comptroller of the Currency known as the 'true lender' rule, which was intended to make it easier for national banks to make and sell loans through non-bank entities, such as fintech firms. The rule introduced a test to determine who the 'true lender' is in partnerships between banks and non-banks, but was criticised for potentially allowing predatory lenders to unfairly benefit from banks' exemptions from certain state regulation and consumer protections laws. | Press release

APAC

Hong Kong:

• (30 Jun 2021) Materials from the Hong Kong Monetary Authority (HKMA)'s 'Unlocking the power of regtech' event. | Press release
  • opening remarks from Chief Executive, Eddie Yue, on the HKMA's banking technology goals and its upcoming activity under the regtech 2025 roadmap;
  • ​closing remarks from Deputy Chief Executive, Arthur Yuen, on why the HKMA is prioritising regtech and how it intends to overcome the barriers to its adoption; and
  • ​regtech adoption index​ which sets out an analysis of the current level of regtech adoption among banks in Hong Kong.

Japan:

• (2 Jul 2021) Singapore and Japan have signed a memorandum of cooperation under which the two jurisdictions agree to collaborate on the exchange of information and the promotion of joint initiatives relating to the digital economy, artificial intelligence, cybersecurity, and information and communications technology. | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.

New Zealand:             

• (7 Jul 2021) The Reserve Bank of New Zealand has announced its intention to consult on a range of subjects regarding the future of payments and saving in the country. As part of this consultation, the Bank intends to seek feedback on a New Zealand CBDC and the issues arising from new forms of money such as cryptoassets and private stablecoins. | Press release

Singapore:   

• (8 Jul 2021) Joint statement​ from the Monetary Authority of Singapore and the Banque de France on the successful completion of a wholesale cross-border payment and settlement experiment using the Singapore Dollar and Euro CBDCs on a common network between the two jurisdictions.
• (2 Jul 2021) Singapore and Japan have signed a memorandum of cooperation under which the two jurisdictions agree to collaborate on the exchange of information and the promotion of joint initiatives relating to the digital economy, artificial intelligence, cybersecurity, and information and communications technology. | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.

Thailand:      

• (8 Jul 2021) Statement from the Bank of Thailand in which it states it has observed an increase in the use of digital assets as payment for goods and services. The Bank emphasises that digital assets are not legal tender and therefore using them for payment constitutes barter trade, wherein the payer and the receiver mutually accept all risks involved. If this use of digital assets becomes more widespread, the Bank notes it will coordinate with the Securities and Exchange Commission and other regulators to take the necessary steps to ensure any risks to the financial system are mitigated.

Europe

EU:  

• (1 Jul 2021) Presentation from a meeting of the EU Parliament's special committee on artificial intelligence in the digital age (AIDA) on the opportunities and challenges posed by the use of artificial intelligence in the financial sector. | Meeting materials

France:          

• (8 Jul 2021) Joint statement​ from Monetary Authority of Singapore and the Banque de France on the successful completion of a wholesale cross-border payment and settlement experiment using the Singapore Dollar and Euro CBDCs on a common network between the two jurisdictions. The Banque de France has also announced the successful completion of another CBDC test, conducted in collaboration with LiquidShare, in which it simulated the issuance and settlement of unlisted securities, and the settlement of listed securities by a CBDC issued on a private blockchain. | Press release
• (5 Jul 2021) Speech by the Governor of the Banque de France, François Villeroy de Galhau, on the recent activities and future plans for an EU CBDC.

Italy:              

• (5 Jul 2021) Speech​ by the Governor of Banca D'Italia, Ignazio Visco, on his expectations for the future of money, including the increasing digitalisation and a closer interrelation between stablecoins and CBDCs.
• (2 Jul 2021) Legislative Decree 100/2021​ (in Italian), which implements certain provisions of the Growth Decree, has been published in the Official Gazette. In particular, the Decree sets out the regulatory framework for Italy's new fintech sandbox and establishes a fintech committee. It will enter into force on 17 July 2021.

Poland:         

• (7 Jul 2021) Polish Financial Supervision Authority statement (in Polish) on Binance, in which it joins the regulatory authorities of the Cayman Islands, Japan, Thailand and the UK in warning consumers that the cryptocurrency exchange is not authorised to conduct business in its jurisdiction.

Serbia:           

• (29 Jun 2021) The Digital Property Act has entered into force in Serbia. The law introduces a regulatory framework covering the issuance, secondary trading, provision of related services, lien and fiduciary rights, and supervision of digital assets. | Press release (in Serbian)

UK:

• (2 Jul 2021) Speech​ by Christina Segal-Knowles, Executive Director for Financial Markets Infrastructure at the Bank of England, on the required elements of, and regulatory model for, private stablecoins.

Ukraine:       

• (30 Jun 2021) The Law on Payment Services​ (in Ukrainian) has been passed by the Verkhovna Rada. The law is designed to modernise certain elements of the payments system in Ukraine. Among other things, it states that the proposed Ukrainian CBDC (the 'e-hryvnia') will be equivalent to cash once it is launched.

Middle East

Iran:

• (2 Jul 2021) Bill​ (in Persian) on cryptocurrency mining and exchange, which prohibits the use of cryptoassets that are not 'national'. It is not clear from the bill whether this refers only to an Iranian CBDC or to private cryptoassets that are mined by licensed miners in Iran (as suggested by the statement (in Persian) of the Central Bank of Iran in April).