Could global regulators finally be deciding to work together – and are they stepping up their game to respond to the rapidly increasing pace of global fintech progress?
Some of America’s most powerful financial regulators – including the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) – have announced they will join the Global Financial Innovation Network (GFIN).
The GFIN is the brainchild of Britain’s regulatory Financial Conduct Authority, the body that polices cryptocurrency- and blockchain-related business in the country. The GFIN also comprises regulators such as the Monetary Authority of Singapore and the Hong Kong Monetary Authority, as well as business groups like the UAE’s Abu Dhabi Global Market.
Fellow American regulators the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) also announced they were joining the GFIN, per a joint press release shared by the SEC.
The GFIN was launched in summer last year, and has spoken of creating a “global sandbox” testbed for companies to “trial cross-border [financial] solutions.”
The move comes just over a week after a G7 taskforce instructed member states to revamp the conventional financial system to respond to threats from alternative financing tools, including cryptocurrencies and global stablecoins.
The G7 made particular mention of the inefficient and costly nature of cross-border transactions within the existing system.
It's not the first time national authorities join forces in order to address challenges brought by new technologies. In July 2018, international coalition against tax criminals, J5, that also targets crypto-related crimes, was formed as a response to a request to reduce tax crime, made by the Organization for Economic Co-operation and Development.
Meanwhile, the CFTC’s Chairman Heath Tarbert says that the regulator’s fintech research facility, LabCFTC, will become an independent operating office.
LabCFTC will continue to report directly to the chairman, and will conduct research into cryptocurrency and blockchain technology.
Tarbert stated, in an official release,
“Blockchain, digital assets and other developments hold great promise for our economy. Now is the time for LabCFTC to play an even greater role as we work to develop and write the rules for these transformative new products. That reality requires engagement at the highest levels within the CFTC, which is why I am elevating LabCFTC to be an independent operating office of the agency.”
The CFTC says LabCFTC is its “beachhead in the emerging world of fintech,” and claims that it will help “bring regulators and innovators together.”