In this Newsletter
Women in Digital Assets Forum and Digital Assets Connection Conference
Hearing on the Future of Digital Assets: Providing Clarity for Digital Asset Ecosystems
Letter of Comment on the Market Structure Discussion Draft
Broadband Access and FinTech’s Infrastructure
Women in Digital Assets Forum and Digital Assets Connection Conference
This June, Maxwell DeGregorio moderated a session on digital assets regulation at the Women in Digital Assets Forum and spoke at the closing session of the Digital Assets Connection Conference in Stamford, Connecticut.
The panel on digital assets regulation featured insights from Vanessa Williams, chief compliance officer, Coinbase Asset Management; Julie Stitzel, head of policy, Digital Currency Group; Vanessa Kargenian, research director, Fidelity Center for Applied Technology; and Lindsay Danas Cohen, chief council, Nillion. The panelists spoke about the regulatory hurdles preventing broader tokenization of real assets, the agenda-setting parallels between the European Union’s Markets in Cryptoassets (MiCA) Regulation and the General Data Protection Regulation (GDPR), and their outlooks toward comprehensive digital asset legislation in the US.
In his second session, DeGregorio discussed the use cases for blockchain technology in emerging markets and the potential nonfinancial applications for the technology for trustless recordkeeping in regions with limited state capacity. He stressed the need for measurable data on positive social benefits from the digital asset industry.
Hearing on the Future of Digital Assets: Providing Clarity for Digital Asset Ecosystems
The House Financial Services Committee convened a hearing on the Digital Assets Market Structure Discussion Draft and its accompanying stablecoin bill that was put forward this June, “The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem.” The hearing featured testimony from Jeremy Allaire, co-founder, chairman, and CEO at Circle; Coy Garrison, partner at Steptoe & Johnson LLP and former counsel to Commissioner Hester M. Peirce; Emin Gün Sirer, PhD, founder and CEO of Ava Labs; Thomas Sexton, president and CEO, National Futures Association; and Aaron Kaplan, founder and co-CEO of Prometheum, Inc.
The hearing provided insights into how Congress intends to provide clarity for digital assets market structure, including closing gaps within securities and commodities laws. Witness testimony focused on the industry’s desire for a predictable rule-making regime managed jointly by the Securities Exchange Commission and Commodities Futures Trade Commission. Notably, Kaplan shared his position that many digital asset firms can do business inside the existing SEC security framework, noting that Prometheum is the only Financial Industry Regulatory Authority-registered special purpose broker-dealer specialized in digital assets. Members focused much of their questions on enhanced consumer protection, the international regulatory environment for digital assets, and how stablecoin regulation might affect USD reserve currency status.
FinTech Advisory Council member and former Consumer Financial Protection Bureau director Kathy Kraninger, head of policy at Solidus Labs, weighed in on the market structure discussion in an interview with CoinDesk.
Letter of Comment on the Market Structure Discussion Draft
The Milken Institute FinTech Program published a comment letter on the Digital Asset Market Structure Discussion Draft by the US House Committee on Financial Services and the US House Committee on Agriculture. We are encouraged by the committee’s efforts to provide much-needed legal certainty and regulatory clarity to the digital asset ecosystem. The Discussion Draft is a positive step to address the urgent need for a framework the market can adhere to and rely upon.
The letter’s comments and recommendations are built upon principles and values important in modernizing market structure to account for responsible digital asset innovation. They focus on the following priority areas: digital assets taxonomy, agency harmony, responsible financial innovation and transparency, activity regulation and technology innovation, and financial inclusion and education. The Milken Institute strongly supports legislation that will build a regulatory framework to bring trust, clarity, and market confidence to the digital assets market.
Broadband Access and FinTech’s Infrastructure
Before technologies like mobile banking can be harnessed to build financial inclusion, communities require sufficient infrastructure where that tech will be deployed. There are well-documented gaps in the broadband grid in emerging markets both abroad and in the United States.
According to World Bank data, over the last decade, the unbanked population fell by 35 percent because of access to mobile wireless internet and mobile banking services. Americans living in low-income and rural communities with less internet access are more likely to live in banking deserts and have lower rates of mobile banking usage. The 2022 New York State Department of Financial Services report on Access to Financial Services in New York: A Report on Unbanked and Underbanked Communities and Households in New York found that certain counties with less broadband availability correspondingly had fewer bank or credit union branches.
Expanding the internet penetration of low-income, rural, and tribal communities in the United States is a key provision of the Biden administration’s Internet for All Initiative launched in 2022. According to the program, roughly one in five American households aren’t connected to the internet. The program will issue $65 billion in grants to expand high-speed internet planning, infrastructure, and adoption. More widespread and reliable high-speed internet infrastructure will enable more vulnerable Americans to participate in the financial system.
While federal policy is working to build out a compressive fiberoptic internet grid in the United States, innovations like satellite internet are working in tandem to bring more people online. According to S&P Global Market Intelligence, innovation in satellite internet access has the potential to disrupt the $420 billion broadband internet industry and enable emerging economies to leapfrog over fiberoptic internet infrastructure. Satellite internet companies like Starlink, Echostar, HughesNet, and Viasat can bring internet on demand to inaccessible regions of the world with their network’s hundreds of orbiting satellites. Notably, Elon Musk’s Starlink network has been providing war-torn Ukraine with internet access as it fights off Russia’s invasion. The Economist reports that satellite internet has set off a minor space race in low Earth orbit as China has been launching its competing network into orbit to compete with American projects.