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Weekly Global Fintech Update

20 September 2021

20 September 2021

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.

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

CLIFFORD CHANCE PUBLICATIONS AND MATERIALS

Clifford Chance briefing – Legal considerations around smart contracts: contracts between computer programs

Clifford Chance briefing – Impact of the new EU artificial intelligence regulation on financial sector firms

Talking Tech article – To pay or not to pay? The ransomware conundrum

Talking Tech article – Are we set for a capital markets fintech reinvention? Digital developments in the Capital Markets – Summer 2021

Talking Tech article – UK guidance on international data transfers: striving for pragmatism

SPOTLIGHT: 
Proptech Bytes: what is proptech and what could it accomplish?

Interested in proptech as well as fintech? Then our new video series, Proptech Bytes, is for you! Proptech Bytes is a series of bite-sized videos on the key terms and trends within proptech, delivered by leaders in the sector and industry. Our first video is introduced by our head of UK Proptech, Matt Taylor, and features Taylor Wescoatt, Founder of Concrete VC, a European venture capital firm. Taylor gives his thoughts on what proptech is and what it could accomplish.

 

GLOBAL LEGAL AND REGULATORY UPDATES

International

  • (10 Sep 2021) Speech by the Head of the Bank for International Settlements' Innovation Hub, Benoît Cœuré, on central bank digital currencies (CBDCs). Among other things, Cœuré calls on central banks to accelerate their work on CBDC design in order to keep pace with private sector stablecoin initiatives.

Americas

Cuba:

  • (16 Sep 2021) Resolution (in Spanish) of the Banco Central de Cuba (BCC), which has entered into force. The resolution establishes a regulatory framework for the use of virtual assets in commercial transactions and a licensing regime, run by the BCC, for virtual asset service providers.

US:  

  • (15 Sep 2021) Speech by Acting Comptroller of the Currency, Michael Hsu, on safeguarding trust in banking. Hsu notes that 'adapting to digitalization' is one of the Office of the Comptroller of the Currency's top four priorities, and highlights the increase in cryptoasset and decentralised finance related activity and the resulting disintermediation in the banking sector as key areas of regulatory challenge.
  • (14 Sep 2021) Testimony of Gary Gensler, Chair of the Securities and Exchange Commission (SEC), before the Senate Committee on Banking, Housing, and Urban Affairs. Gensler discusses the SEC's current activities around investor protection in the cryptoassets markets and states that any exchange that has a security listed must register with the SEC. The remarks follow the SEC's warning that it would sue crypto-exchange Coinbase if it launched its cryptoasset lending product Lend.
  • (14 Sep 2021) Analysis issued by the House Committee on Ways and Means on various legislative proposals under the budget reconciliation instructions. Included in the document are proposed tax initiatives to add digital assets to the 'constructive sale' rules, which are intended to prevent investors from locking in investment gains without paying capital gains, and to 'wash sale' rules, which prohibit investors from claiming capital gains deductions on certain assets repurchased within 30 days of sale.
  • (9 Sep 2021) Priority guidance plan for 2021-2022, issued by the Department of the Treasury and the Internal Revenue Service. The plan includes a focus on regulations regarding information reporting on virtual currencies under § 6045 of the US Code (Returns of Brokers).

APAC

Singapore:   

  • (14 Sep 2021) The Infocomm Media Development Authority (IMDA) and the Personal Data Protection Commission (PDPC) have launched a programme designed to help small and medium-sized enterprises use data responsibly. | Press release.
  • (14 Sep 2021) PDPC guide to data protection practices for ICT systems, including guidance on preventing common types of data breach. | Press release

Vietnam:      

  • (6 Sep 2021) Resolution 100/NQ-CP 2021 (in Vietnamese), which establishes a regulatory sandbox for testing fintech products and services for the banking sector. The sandbox will be run by the State Bank of Vietnam.

Europe

EU/Europe:

  • (15 Sep 2021) The EU Commission has proposed a 'Path to the Digital Decade' under its State of the Union Address 2021. The plan is intended to implement the Commission's digital ambitions for 2030 and includes increased investment in blockchain, high-performance computing and data infrastructure. | Press release
  • (11 Sep 2021) Speech by Executive Vice-President of the EU Commission, Valdis Dombrovskis, at the ECOFIN press conference. The speech covers, among other things, the Commission's digital finance package and recent discussions among ministers on blockchain technologies.
  • (9 Sep 2021) Several responses have been published to the Basel Committee on Banking Supervision's consultation on the prudential treatment of cryptoasset exposures: European Banking Federation response / European Association of Co-operative Banks response

Cyprus:         

  • (13 Sep 2021) Securities and Exchange Commission policy statement on the registration and operation of cryptoasset service providers under Cyprus' anti-money laundering and counter terrorism financing laws. | Press release

Germany:    

  • (9 Sep 2021) Speech by Deutsche Bundesbank Executive Board Member, Joachim Wuermeling, on the impact of transformation finance on the German banking system.

Russia:          

  • (6 Sep 2021) Central Bank of Russia guidance (in Russian), in which it advises local banks to block customer accounts, e-wallets and credit cards if there is evidence of, among other things, suspicious cryptoasset activity. Criteria for blocking include: an unusually large number of counterparties; evidence of different individuals remotely accessing the same account; and daily transaction volumes greatly exceeding the customers' average balance.

Switzerland:

  • (10 Sep 2021) The Financial Market Supervisory Authority (FINMA) has announced it has issued two approvals to operate financial market infrastructures based on distributed ledger technology (DLT). Specifically, it has authorised SIX Digital Exchange AG to act as a central securities depository and the associated company SDX Trading AG to act as a securities exchange. This is the first time that a licence has been issued in the Swiss financial centre for infrastructures that facilitate the trading of digital securities in the form of tokens and their integrated settlement. | Press release

UK:

  • (16 Sep 2021) House of Lords Economic Affairs Committee consultation on the economics of CBDCs. In particular the Committee is seeking responses on the benefits and risks of a CBDC, its impact on the Bank of England and HM Treasury's roles, and its effect on economic foreign policies and geopolitical influence. Responses are due by 15 October 2021.
  • (7 Sep 2021) Several responses have been published to the Bank of England's discussion paper on new forms of digital money:Financial Services Consumer Panel response /UK Finance response
CLIFFORD CHANCE EVENTS

European Perspectives Series: Data exposure knows no borders – trends and challenges across Europe (6 October 2021):

Three years on from the introduction of GDPR, the European Court of Justice (ECJ) is expected to introduce a rule on the materiality threshold on data breaches, while the EU will be introducing a new directive on representative action and regulations on class action. With data litigation likely to be on the rise as a result, a team of Clifford Chance lawyers will be delivering a webinar on the topic. Join our panel of speakers as they discuss the role of the ECJ in strengthening data protection, the different approaches to class action regulations across EU jurisdictions, the impact that the European trend has on the US, and the key drivers for data litigation. | For more information and to register, please see the event page.

 

Warsaw Perspectives Series: CBDCs and stablecoins – is a revolution in financial markets and payment services approaching? (15 December 2021):

New CBDC solutions are being implemented by central banks, governments and international organisations, and the private sector is developing various types of digital payment instrument as an alternative to fiat currency. Join Clifford Chance Partner, Andrzej Stosio, for a seminar on the fundamental impact these developments may have on global and local financial markets and the legal, regulatory and economic challenges they pose. Please note this seminar will be held in Polish. | For more information and to register, please see the event page.

Additional Information

This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. Clifford Chance is not responsible for third party content. Please note that English language translations may not be available for some content. 

Any content above relating to the People's Republic of China (PRC) is based on our experience as international counsel representing clients in business activities in the PRC and should not be construed as constituting a legal opinion on the application of PRC law. As is the case for all international law firms with offices in the PRC, whilst we are authorised to provide information concerning the effect of the Chinese legal environment, we are not permitted to engage in Chinese legal affairs. Our employees who have PRC legal professional qualification certificates are currently not PRC practising lawyers.