Clifford Chance

For the closing session of our recent International Festival of Fintech we were delighted to welcome the Honorable Caroline D. Pham, Commissioner, US Commodity Futures Trading Commission (CFTC), to discuss US and international regulation of digital assets and her work with the Global Markets Advisory Committee (GMAC) with Clifford Chance Partner, Diego Ballon Ossio.

Some of our key takeaways include:

• US direction of travel: Commissioner Pham anticipates a significant year ahead for digital assets in the US with important court cases and a strong enforcement program from the CFTC and other regulators. Commissioner Pham mentioned promising recent US developments, such as the Regulated Liability Network pilot involving the New York Fed. Commissioner Pham has recently proposed a digital assets regulatory sandbox to explore the tokenisation of financial instruments from an infrastructure perspective within the US.
• GMAC priorities: Commissioner Pham shared insights from a recent GMAC meeting focused on tackling global market challenges and aligning with international standards. She highlighted the GMAC's recent publication of a digital asset taxonomy to advance regulatory clarity and promote international alignment.
• International outlook: Singapore and the BIS Innovation Hub were identified as leaders in exploring and piloting digital ledger technology. The Banque de France and the Bank of England were also noted for their innovative projects in wholesale markets, along with the BIS work on capacity building for jurisdictions around the world. Japan's comprehensive legal and regulatory framework for tokenised activities was cited as a good example for the US to consider.
• Global harmonization of cryptoasset regulation: The Commissioner stressed the importance of international standard setters in achieving a globally harmonized approach to cryptoasset regulation. She discussed the distinction between financial and commercial activities, the role of federal agencies, and the need for an activity-based regulatory approach. Monitoring the implementation of the Financial Stability Board's (FSB) principles for cryptoasset regulation and IOSCO's development of related guidelines is crucial.

Speakers:

• Honorable Caroline D. Pham, Commissioner, US CFTC
• Diego Ballon Ossio, Partner, Clifford Chance