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The complaints about two life insurance companies piled up: California customers said Accordia Life & Annuity Co. and Athene Annuity & Life Co. hadn’t sent them billing statements or annual reports and then let their policies lapse.
They said the companies weren’t providing electronic access to…
United States Commodities Futures Trading Commission (CFTC) commissioner, Rostin Behnam recently gave a speech in which he predicted that “virtual currencies […] will become part of the economic practices of any country.” The CFTC commissioner predicted that cryptocurrencies will have a transformative effect in providing financial services to unbanked populations, and undermine corruption through increasing financial transparency.
“Cryptocurrencies Will Proliferate to Every Economy and Every Part of the Planet” – CFTC Commissioner, Rostin Behnam
Whilst speaking at the recent BFI Summit at the United Nations Plaza in New York, CFTC Commissioner, Rostin Behnam, expressed his belief that virtual currencies will be integrated into the economic practices of all nations.
Mr. Behnam stated that “virtual currencies may – will – become part of the economic practices of any country, anywhere. Let me repeat that: these currencies are not going away and they will proliferate to every economy and every part of the planet. Some places, small economies, may become dependent on virtual assets for survival. And, these currencies will be outside traditional monetary intermediaries, like government, banks, investors, ministries, or international organizations.”
“We are Witnessing a Technological Revolution. Perhaps We are Witnessing a Modern Miracle”
Mr. Behnam predicts that virtual currencies will undermine financial corruption, however, he also warns that the “economic […] kleptocracy” exerts excessive influence over the cryptocurrency markets, that virtual currencies could become a vehicle for further capital accumulation for the financial elites.
Mr. Behnam states “One of the often discussed problems in developing countries is corruption. I know it is a perennial problem, undermining the work of the United States and virtually all international organizations. It may be the single greatest impediment to social justice, equality, hunger, peaceful resolution of conflict, and a host of other problems […] Now, with the advent of virtual assets, technology may provide a solution. And, the single greatest weapon against corruption may be the cell phone. There are 6.8 billion cell phones in the world, almost one for every person on the planet. Technology could simply bypass corruption. Here is our chance to put money directly into the hands of those who need it, without bribery, rake-offs, graft, and shakedowns. Virtual currencies could transform the economic and social landscape. It could mean a massive, and equitable, shift of wealth. Technology could be transformational, without a military take-over, civil war, or political or religious creed.”
“However,” he continued, “economic elites know all this. They will not be idle. This is what I mean by a powerful danger. If the kleptocracy controls technology and the means of distribution, then they simply accumulate more wealth at the expense of their citizens, draining wealth in cryptocurrencies rather than dollars or euros. Virtual assets may be a stranglehold. In other words, technology can be a weapon against the work of the United Nations and others trying to alleviate poverty or violence. Virtual assets become a means of deeper control of wealth and a means of exploitation.”
Virtual Currencies Provide Financial Services To Unbanked Populations
The CFTC commissioner discusses the potential for cryptocurrencies to serve as a means through which the vast populations lacking access to basic financial services can attain greater economic autonomy.
“Traditionally, there has been a need for a trusted intermediary – for example, a bank or other financial institution – to serve as a gatekeeper for transactions and many economic activities. Virtual currencies seek to replace the need for a central authority or intermediary with a decentralized, rules-based and open consensus mechanism,” said Mr. Behnam.
“The so-called ‘unbanked’ could now be on the virtual grid. And, those without computers, some four billion people, could gain an important connection through cell phones. And, the discussion has extended to micro-lending, micro-transactions, greater transparency, and greater financial inclusion,” he added.
What are your thoughts regarding Commissioner Behnam’s speech? Join the discussion in the comments section below!
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The person who wins the four-way race to become California’s next insurance commissioner will inherit a job with broad authority over policies that cover homes, businesses, cars and even airplanes.
But medical insurance? Not so much. The commissioner’s direct control over health insurers is limited,…
United States Securities and Exchange Commission (SEC) Commissioner, Hester Peirce, delivered a speech before the Medici Conference earlier this month discussing many issues pertinent to ICOs. Mrs. Peirce indicated that the SEC is open to discussion of developing a regulatory sandbox for ICOs, however, expressed a number of concerns surrounding the legislative model. The commissioner also warned of the potentially stifling effect of applying “blanket” classifications to the emerging field of cryptocurrencies.
SEC Commissioner Welcomes Discussion of Regulatory Sandboxes
Commissioner Peirce opened her speech by stating that “Back in Washington, DC, there has been a lot of talk about regulatory sandboxes,” adding that “A number of forward-looking regulators, both here and abroad, have created regulatory sandboxes.”
Mrs. Peirce cites a number of examples of effective regulatory sandboxes, including the United Kingdom – where the Financial Conduct Authority governs a sandbox that “allows businesses to test innovative products, services, business models and delivery mechanisms in the real market, with real consumers,” and Singapore – where the Monetary Authority of Singapore uses regulatory sandbox apparatus to “encourage[e] more Fintech experimentation so that promising innovations can be tested in the market and have a chance for wider adoption, in Singapore and abroad.”
“The motivating notion behind a regulatory sandbox,” Mrs. Peirce asserts, “is that the regulator in a sense sits in the sandbox with the innovator. Not only is she right there to make sure that nobody gets hurt, but she has a front-row seat on the innovative process. She sits at the entrepreneur’s shoulder as he thinks through how to address structural and aesthetic weaknesses in his sandcastle.”
“Talk of sandboxes is welcome, and my fellow regulators’ sandboxes have already yielded great dividends,” Mrs. Peirce added.
Concerns Surrounding Regulatory Sandbox Approach
Despite expressing her openness to discussion surrounding regulatory sandboxes, the commissioner outlined a number of qualms held regarding the legislative model.
Mrs. Peirce states that “The regulator may insert itself inappropriately into the creative process,” stressing that “The regulator should be careful not to try to control the development of new technologies. Not only is it outside the regulator’s proper function, but such micromanagement can result in the regulator forcing new technology to fit existing—and familiar—regulatory frameworks regardless of whether those frameworks are appropriate.”
“The law deserves respect, but technological progress should not be bound by the limits of the regulator’s lawyerly imagination,” added Mrs. Peirce.
Commissioner Peirce also outlined concerns that regulatory sandboxes create “the temptation […] for regulators […] to substitute their own judgement for that of consumer and investors,” emphasizing that “Regulators do not need to take on the impossible task of deciding what products and services will win over consumers. The market is efficient at signaling which products and services people want in their lives and which they would rather do without.”
Regulation as Instrumental in Defining the Future Direction of Innovative Technology
Mrs. Peirce stated that “The world of tokens and ICOs is still in its infancy,” emphasizing that “Determining the appropriate regulatory regime also will mean determining the shape these transactions will take as they mature.
The commissioner added that “While it’s tempting to envision what might come to pass if these concepts were free to develop in whatever way the market dictated, without being pinned down with a label […] there comes a point where regulatory uncertainty is a greater roadblock than confinement within a particular regulatory regime.”
Commissioner Peirce “Wary of any Blanket Designation for all ICOs”
Mrs. Peirce expressed caution regarding regulators seeking to hastily create a broad label for the dynamic and still emerging ICO sector.
After arguing that the majority of “tokens or coins used in initial coin offerings […] look the most like securities,” the commissioner stresses “This is not to say that all ICOs must be deemed securities offerings. Given the undeveloped nature of this area, I am wary of any blanket designation for all ICOs. Instead, the best path forward, at least for the time being, is to evaluate the facts and circumstances of each offering.”
Commissioner Peirce also implied that the SEC will develop a unique apparatus of ICOs deemed to fall under the regulator’s purview, stating “For those ICOs and tokens that do come under the SEC’s jurisdiction, it will fall to us to devise an appropriate regulatory structure for these new types of deals.“
The Regulatory Challenge of Innovation
Mrs. Peirce stated that “Innovation is always a challenge for regulators. We are used to the way things have been done. Our rules have grown up in response to past technologies. Figuring out whether and how they apply to new ideas is difficult.”
Commissioner Peirce also warned that regulators “must be careful not to let our lack of familiarity with new technology breed anxiety and therefore bad regulation,” adding that “There is a risk, when something truly innovative comes along, that regulators will focus only on the harms the innovation may bring and miss entirely the opportunity it presents to improve people’s lives.”
At the speech’s conclusion, Mrs. Peirce stated that “The best path forward is for regulators to approach ICOs and tokens with intense curiosity. We must put in the effort to learn about these new technologies and employ the staff necessary to support our understanding.”
“My hope is that we can navigate these new waters collaboratively. The SEC’s role is not to hand out permission slips for innovation. Innovation happens—organically through private decisions and irrepressible human creativity. We at the Commission have a role to play in protecting investors and market integrity by deterring and punishing fraud and setting clear rules. As we sit atop our lifeguard’s stand and survey the beach, however, let’s not lose sight of the benefits new technology can provide in the area of capital formation, market efficiency, economic growth, and overall societal well-being.”
Do you think that a regulatory sandbox for ICOs is a good idea? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, sec.gov
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George P. Bush, Texas’ land commissioner, won the state’s GOP primary on Tuesday, getting the outright majority of votes against a challenger from a former office holder and avoiding a runoff election.
Some members of the European Union have been discussing the popularity of the decentralized currency bitcoin, and the EU’s political body recently added “digital currencies” to its anti-money laundering statutes. However, the EU commissioner for financial affairs, Pierre Moscovici, explains in a recent interview that at this stage politicians have no plans to “react” just yet to the bitcoin phenomenon.
The EU Adds Digital Currency Definitions to Existing Legislation, But the Financial Commissioner Says the Political Body Has No Current Plans to Regulate Bitcoin
Bitcoin is trending worldwide, and regulators and bureaucrats from individual countries are discussing the subject quite heavily. Political bodies from the U.S., Asia, and EU have been talking about the many ways they can regulate the cryptocurrency by clamping down on bitcoin businesses and exchanges. Politicians from the EU particularly have been concerned with terrorism financing, money laundering, and tax evasion that they believe can be tied to cryptocurrencies. News.Bitcoin.com recently reported on European legislators adding digital currencies to the Fourth Anti-Money Laundering Directive which basically considers currencies like bitcoin to be a “monetary instrument.”
Although spectators believe the EU is “cracking down” on cryptocurrencies the European Union commissioner, Pierre Moscovici says the political body has no plans to regulate them at the moment.
EU Commissioner: “We Don’t Think We Have to React to Bitcoin at This Stage”
In an interview on the broadcast ‘Bloomberg Surveillance,’ with Francine Lacqua, the EU’s financial commissioner, Pierre Moscovici, is explicitly asked about bitcoin and regulating the digital asset.
“Commissioner are you looking at bitcoin at all and does the is the EU planning to take any action to regulate it?” Lacqua asks the EU’s financial affairs commissioner.
“At this stage, we do not consider bitcoin as an alternative currency, not like the euro — We see that there is quite a lot of speculation about that [bitcoin],” Moscovici responds.
Sometimes speculation is overactive or exuberant — We look at that and analyzed the phenomenon, but we don’t think we have to react to bitcoin at this stage as a political and technical body.
Regulatory Conversations for Bitcoin Are Not Happening Right Now
The latest definitions added to the EU’s Fourth Anti-Money Laundering Directive include digital currencies and prepaid debit cards which is not much different than the legislation being drafted across many states in the U.S. So Lacqua asks the EU commissioner if politicians and regulators from the region are even “talking about regulating bitcoin.” Moscovici details to the host that regulatory discussions are not so prevalent right now.
“No we are not having those conversations right now,” Moscovici emphasizes.
What do you think about the EU financial commissioner’s statements? Let us know what you think in the comments below.
Images via Shutterstock, and Pixabay.
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