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CFTC’s subcommittee report on decentralized finance highlights its findings and recommendations
On January 8, the CFTC issued a report on decentralized finance ahead of the CFTC’s event on artificial intelligence, cybersecurity, and decentralized finance. Authored by the CFTC’s Subcommittee on Digital Assets and Blockchain Technology, which is a group of fintech experts selected by the CFTC, the report urged government and industries to work together and advance the developments of decentralized finance in a responsible and compliant way.
The report lists many key findings and recommendations for policymakers to implement. For example, the report highlights how policymakers should keep in mind customer and investor protections, promotion of market integrity and financial stability, and efforts to combat illicit finance when creating regulations, among others. Recommendations for policymakers include increasing their technical understanding of this space, surveying the existing regulatory “perimeter,” identifying and cataloging risks, identifying the range of regulatory strategies, and applying regulatory framework on digital identity, KYC and AML regimes, and calibration on privacy in decentralized finance.
For further learning on decentralized finance, IOSCO released a publication on its nine recommendations, which was previously covered by InfoBytes here.
U.S., Canada, and Mexico announce annual financial regulatory forum
On November 30, the U.S. Treasury Department, the Canadian Department of Finance, and the Ministry of Finance and Public Credit of Mexico (collectively, the “authorities”) announced the creation of the Canada-Mexico-United States Financial Regulatory Forum (Forum) to share information on financial sector developments and financial regulatory practices and procedures. The authorities published a joint “understanding,” which outlines the Forum’s intentions, including: (i) sharing information to allow for timely identification of potential cross-border financial regulatory issues; (ii) exchanging views on emerging financial sector developments and financial stability risks; and (iii) discussing regulatory issues that arise in bilateral and multilateral contexts or which relate to international standards. The Forum intends to meet annually.