Archive: 2021

1
UK Payments Landscape Review
2
Nebraska’s Play for a Piece of the Digital Asset Pie
3
The Future of Stable (Bank) Coins?: President’s Working Group on Financial Markets Urges Legislation Limiting Stablecoins to Insured Banks
4
California Imposes Additional Requirements on Money Transmitters
5
Satoshi Goes to Washington : Senator Toomey Issues RFI to Inform Digital Asset Legislation
6
Never Ending True Lender Uncertainty
7
Taking Bitcoin to the Bank: FDIC Seeks Comments on Bank Services for Digital Assets
8
New UK Insolvency Regime for Payment Institutions and Electronic Money Institutions
9
Annual Consumer Financial Services Symposium to Focus on 5 Top Issues
10
Cannabis Banking in the US – The Latest on the SAFE Act

UK Payments Landscape Review

By Kai Zhang

In July 2020, HM Treasury published a “Payments Landscape Review: Call for Evidence” for a strategic review of the UK payments sector. Following feedback from the industry, HM Treasury published its Response to the Call for Evidence in October 2021 which sets out a number of initiatives to ensure the payment sector stays at the “forefront” of technology and innovation.

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Nebraska’s Play for a Piece of the Digital Asset Pie

By Jeremy McLaughlin

On October 1st, Nebraska ingratiated itself to the digital asset industry when the Nebraska Financial Innovation Act (The Act) became effective. The Act offers two pathways for an entity wishing to offer certain digital asset services: a state-chartered bank may create a digital asset division or a digital asset depository may be created under a new charter.

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The Future of Stable (Bank) Coins?: President’s Working Group on Financial Markets Urges Legislation Limiting Stablecoins to Insured Banks

By Judith Rinearson, Jeremy M. McLaughlin, and Daniel S. Nuñez Cohen

On 1 November 2021, the President’s Working Group on Financial Markets (PWG), in conjunction with the Federal Deposit Insurance Corporation and the Comptroller of the Currency, issued a long-awaited joint “Report on Stablecoins” (Report). Per the press release (and a speech by Undersecretary of Treasury Nellie Liang), the Report is intended to “identify regulatory gaps related to “payment stablecoins” (defined as stablecoins that are designed to maintain a stable value and “therefore have potential to be used as widespread means of payment”), and to present recommendations for addressing those gaps.”

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California Imposes Additional Requirements on Money Transmitters

By Jeremy M. McLaughlin

Under a newly-enacted law, money transmitters licensed in California must comply with new customer service requirements starting on July 1, 2022. Under the requirements, a licensee must “prominently display on its internet website a toll-free telephone number through which a customer may contact the licensee for customer service issues and receive live customer assistance.” The line must be operative at least 10 hours a day, Monday through Friday. In addition, California law currently requires a money transmitter to provide a receipt for transactions. Under the new requirements, the receipt must also provide the telephone number through which the customer may contact the licensee for customer service issues.

Satoshi Goes to Washington : Senator Toomey Issues RFI to Inform Digital Asset Legislation

By Jeremy M. McLaughlin, Judith Rinearson, and Daniel S. Cohen

As we have noted in the past, federal regulation of the digital asset/cryptocurrency/DeFi community is evolving and there are many perspectives on what direction it should take. For instance, earlier this week, the House Democratic leadership and a group of moderate House Democrats agreed to a compromise that would prevent the House of Representatives from amending the Senate-passed “Infrastructure Investment and Jobs Act” (H.R. 3684), thereby preserving the bill’s provisions expanding the definition of “broker” under the Internal Revenue Code to apply to various digital asset market participants.

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Never Ending True Lender Uncertainty

By Jeremy McLaughlin and John Reveal

On June 24, 2021, the U.S. House of Representatives passed a resolution to overturn the Office of the Comptroller of the Currency’s (“OCC”) “true lender” regulation that had been finalized on October 30, 2020. This resolution revives the uncertainty regarding the enforceability of loan terms when a national bank or federal savings association assigns loans to third parties.   President Biden is expected to sign the resolution. 

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Taking Bitcoin to the Bank: FDIC Seeks Comments on Bank Services for Digital Assets

By: Judie Rinearson, Jeremy McLaughlin, and Daniel S. Cohen

The Federal Deposit Insurance Corporation (FDIC) has issued a “Request for Information and Comment on Digital Assets” (RFI) to learn more about the “novel and unique considerations related to digital assets….[g]iven that banks are increasingly exploring the emerging digital asset ecosystem.” A key theme of the RFI is the development of a framework to promote “responsible innovation.” Comments are due by July 16, 2021.

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New UK Insolvency Regime for Payment Institutions and Electronic Money Institutions

By Max Griffin, Jonathan Lawrence and Kai Zhang

A new special administration regime is being introduced in the UK for insolvent payment institutions (PIs) and electronic money institutions (EMIs).

The key purposes of the Regulations are to ensure that in the event of an institution’s insolvency (a) funds are returned to customers quickly and (b) shortfalls in the amounts returned are minimised. Since 2018, six PIs and EMIs have entered insolvency but only one has returned customer funds.

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Annual Consumer Financial Services Symposium to Focus on 5 Top Issues

K&L Gates is proud to host the 2021 Consumer Financial Services Symposium – Virtual Edition.  This symposium will consist of a series of webinars over the course of several weeks with the first panel focusing on FinTech Trends, Developments, and New Directions on Wednesday, April 21 at 1:00 – 2:00 p.m. EST. 

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Cannabis Banking in the US – The Latest on the SAFE Act

By: Brenden R. Chainey, Daniel S. Cohen, Daniel F. C. Crowley, Scott J. Gelbman, Barry M. Hartman, Kathleen L. Nicholas

In September 2019, the U.S. House of Representatives passed the “Secure and Fair Enforcement (SAFE) Banking Act of 2019”, the first stand-alone cannabis legislation to be approved by the House of Representatives. Earlier this month, revised versions of the bill were introduced in the House and Senate “to reform federal cannabis laws and reduce the public safety risk in communities across the country.”

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