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Fintech

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Global Fintech Update

29 April 2022

Banking & Finance Fintech Crypto 29 April 2022

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. 

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

CLIFFORD CHANCE BRIEFINGS AND MATERIALS

SPOTLIGHT - “What is the Metaverse? Will it change the world, and why should I care?” webinar (26 April 2022)

On 26 April Clifford Chance hosted a webinar - 'What is the Metaverse? Will it change the world, and why should I care?

As investment floods into the Metaverse – a collection of immersive, integrated, virtual worlds where users can live, work and play – our speakers (Megan Gordon, Brian Harley and Angelina Gomez) explored the practical applications of the Metaverse and the legal issues that will arise as it grows.

With questions of data security, privacy, IP, antitrust, diversity and ethics already emerging as key issues for the future of the Metaverse, they analysed whether real-world problems will take on new dimensions in the virtual realm. As a growing number of established companies and institutions set up shop in the Metaverse, they considered the implications of the new economic models emerging there, where wealth can be created, traded and enhanced using technologies adapted to its virtual environment, from cryptocurrencies to NFTs.

GLOBAL LEGAL AND REGULATORY UPDATE

International

  • (25 Apr 2022) The Bank for International Settlements' Innovation Hub and Bank Indonesia have announced the launch of the G20's third TechSprint. The 2022 TechSprint calls for innovative technological solutions to a range of challenges focusing on wholesale and retail central bank digital currencies (CBDCs). Registration closes on 20 May 2022. | Press release | TechSprint webpage

Americas

Brazil:            

  • (26 Apr 2022) A new bill, which incorporates proposals from bills 3825/20193949/20194207/2020 and 2201/2021 (in Portuguese), has been approved by the Senate. The bill, if enacted, would introduce a regulatory framework for virtual assets and their service providers. It will now need to be approved by the Chamber of Deputies before it can be signed into law by the President. | Press release (in Portuguese)

Cuba:             

  • (26 Apr 2022) Resolution 89/2022 (in Spanish), which introduces a licensing regime for virtual asset service providers wishing to operate in Cuba. The regime will enter into force on 16 May 2022 and will be overseen by the Banco Central de Cuba.

Panama:      

  • (28 Apr 2022) Bills 696 and 697 have been passed by the Panamanian Legislative Assembly at their third reading. The bills seek to introduce a legal framework for cryptocurrencies in Panama, and to make the country a more attractive place for crypto-related businesses and investment. They must now be signed by President Laurentino Cortizo before entering into law. | Press release (in Spanish) | Tweet from Congressman Gabriel Silva (in Spanish) summarising the proposed legislation

US:  

  • (28 Apr 2022) Digital Commodity Exchange Act, which has been introduced to Congress. The bill, if enacted, would create a legal definition for 'digital commodities' (namely, any form of fungible intangible personal property that can be exclusively possessed and transferred person to person without necessary reliance on an intermediary) and would put these products under the jurisdiction of the Commodity Futures Trading Commission.
  • (27 Apr 2022) Statement from the Acting Comptroller of the Currency, Michael Hsu, on the need for shared and interoperable standards for stablecoins. Hsu argues that the standards should be similar to those developed in the early days of the internet by the Internet Engineering Task Force and the World Wide Web Consortium, and that they should involve input from industry bodies, academics and the government.
  • (25 Apr 2022) Consumer Financial Protection Bureau (CFPB) consultation on a proposed procedural rule, which will permit the CFPB to supervise non-banking financial institutions (such as fintechs) whose activities it believes may pose a risk to consumers. Responses are due by 25 May 2022. | Press release

APAC

Hong Kong:

  • (27 Apr 2022) Hong Kong Monetary Authority (HKMA) discussion paper setting out the findings of the second phase of its CBDC project, which investigated potential policy and design approaches for a retail CBDC. The discussion paper seeks stakeholder feedback on potential use cases and design considerations, including issuance mechanisms, interoperability with other payment systems, privacy and data protection, and legal considerations. Responses are due by 27 May 2022. | Press release
  • (19 Apr 2022) HKMA paper on the opportunities and challenges posed by the rapid growth of digital banking transactions. The HKMA notes that it intends to prioritise developing protection measures for the new service models arising from the expansion of digital banking, including requirements around information disclosure, customers' finance management, and dispute handling.
  • (14 Apr 2022) Blogpost from the Secretary for Financial Services and the Treasury Bureau, Christopher Hui, which sets out the Hong Kong Government's initial considerations regarding the regulation of crowdfunding.

India:             

  • (18 Apr 2022) Securities and Exchange Board of India guidance which clarifies certain aspects of its circular issued in August 2021 on the use of distributed ledger technology (DLT) for security and covenant monitoring.

The Philippines:         

  • (26 Apr 2022) The Bangko Sentral ng Pilipinas has announced it is launching a pilot project, Project CBDCPh, which will test the use of a wholesale CBDC for large-value financial transactions. | Press release

Europe

EU:  

  • (28 Apr 2022) European Central Bank (ECB) call for expressions of interest for payment service providers, banks and other relevant companies to join an exercise to develop prototype user interfaces for a future digital euro payments system. Participants will be asked to collaborate with the ECB on the development of prototypes that address specific use cases for the payment process. Responses are due by 20 May 2022. | Press release
  • (25 Apr 2022) Speech from ECB Executive Board Member, Fabio Panetta, on the 'wild west' of cryptoassets. Panetta calls for a swifter and stricter response to the emerging challenges posed by cryptoassets, including strengthening the requirements around public disclosure, regulatory compliance reporting, transparency and standards of conduct.
  • (22 Apr 2022) The Council of the EU and the EU Parliament have reached a provisional political agreement on the Digital Services Act, which introduces requirements for various online platforms aimed at ensuring a safer and more open digital space for users and a level playing field for companies. | Press release

France:          

  • (24 Apr 2022) Speech by the First Deputy Governor of the Banque de France, Denis Beau, on the work central banks, and the banking sector in general, are doing to support the transition to a more digital and sustainable financial sector.

Gibraltar:     

UK:

  • (28 Apr 2022) Research paper on the benefits and harms of algorithms from the Digital Regulation Cooperation Forum (DRCF). The DRCF comprises representatives from the Competition and Markets Authority, the Office of Communications, the Information Commissioner's Office, and the Financial Conduct Authority.
  • (28 Apr 2022) DRCF discussion paper on auditing algorithmic processing systems, with a particular focus on the role of regulators. The paper seeks stakeholder input on four potential approaches regulators could take to addressing algorithmic audits. Responses are due by 8 June 2022.
  • (28 Apr 2022) DRCF annual report and 2022/23 work plan. The annual report sets out the key activities undertaken by the DRCF in 2021/22 regarding digital regulation, and the work plan sets out its upcoming areas of focus. Its future priorities include activities to promote coherence between regimes, collaboration on projects, and capability building across the regulators.

Ukraine:       

  • (21 Apr 2022) The National Bank of Ukraine has announced it is implementing additional measures under martial law intended to prevent capital outflows. The measures include a ban on individuals buying cryptocurrencies with the national fiat currency, although they can continue to be bought with foreign currency provided monthly purchases do not exceed UAH 100,000. | Press release (in Ukrainian)

CLIFFORD CHANCE EVENTS

European Perspectives Series: The Digital Markets Act – welcome to a new era for tech regulation (10 May 2022):

On 24 March, the EU legislators agreed on the final text of the Digital Markets Act (DMA). The DMA will introduce new and far-reaching rules for the digital sector, with a particular focus on the behaviour of so-called digital 'gatekeepers', and marks the first major overhaul of EU rules for online actors in two decades. You are invited to join our webinar where some of our top European antitrust and tech experts from across the Clifford Chance network will give an overview of the DMA, discuss who is affected, and consider how and what happens next. | To register, please see the event registration form.

Clifford Chance  International Festival of Fintech which will take place virtually (Tuesday 17 to Thursday 19 May 2022):

Join us for three days of insightful fintech webinars featuring expert panel discussions and fireside chats with industry leaders and rising stars. Each session will focus on the fast-changing world of financial technology and the key legal and regulatory issues, covering topics such as: the impact of accelerated growth in crypto and digital currencies; the benefits and risks of new technologies such as quantum computing and DLT; the development and regulation of digital assets; ESG topics including sustainable finance, carbon trading and sustainable bitcoin mining; and fintech in emerging markets. | For more information and to register, please see the event webpage.

Securities Finance Technology Symposium (19 May 2022):

Clifford Chance is pleased to be sponsoring the upcoming Securities Finance Technology Symposium, hosted by Securities Finance Times. The event will take place virtually and will be covering a range of regulatory drivers in this space, from CFTC Rewrite and UMR Phase 6 to collateral optimisation and blockchain, answering industry questions and discussing varying solutions. | To register, please see the event website.