Securities Finance Industry News | Biden signs executive order for digital asset regulation

President Joe Biden has signed an executive order that outlines the US government’s commitment to ensuring that virtual assets and cryptocurrencies will be subject to further compliance measures with proper regulations and oversight.

Cryptocurrencies have experienced “explosive growth” over the past five years, growing from a market capitalization of $14 billion to $3 trillion, Biden said in the executive order.

Biden said, “The United States has an interest in responsible financial innovation, expanding access to safe and affordable financial services, and reducing the cost of domestic and cross-border remittance transfers and payments, including through modernization. continuity of public payment systems.

“We must take strong action to reduce the risks that digital assets could pose to consumers, investors and business protections; financial stability and the integrity of the financial system. Some digital asset trading platforms and service providers have grown rapidly in size and complexity and may not be subject to or comply with appropriate regulations or oversight.

“Issuers of digital assets, exchanges and trading platforms, and intermediaries whose activities may increase risks to financial stability, should, where appropriate, be subject to and comply with regulatory and supervisory standards that govern traditional market infrastructures and financial companies, in accordance with the general principle of “same business, same risks, same rules”.

The 46th US President added, “We must mitigate the illicit finance and national security risks posed by the misuse of digital assets. We must strengthen American leadership in the global financial system and in technological and economic competitiveness, including through the responsible development of payment innovations and digital assets. We must promote access to safe and affordable financial services.

Commenting on the order, Ganesh Iyer, Director of Marketing and Strategy at IPC Systems, said, “Is Biden heralding the beginning of the end for ‘Wild West’ crypto markets? Increased regulation of digital assets has implications for how institutions interact with the burgeoning asset class.

He adds, “No matter what happens with crypto regulations, these fund managers must seize every opportunity by using networks that provide fast and unrestricted access to major crypto exchanges. Only time will tell how and when this market will mature. Until then, hedge funds now have the ability to use ultra-low latency networks to make the most of volatile, non-compliant, and liquid crypto markets.

The executive order was signed the same day the U.S. Securities and Exchange Commission (SEC) proposed changes to its rules to improve and standardize disclosures regarding cybersecurity risk management, strategy, governance and reporting. incidents by public companies.

The Proposed Amendments aim to better inform investors about a registrant’s risk management, strategy and governance and to notify investors in a timely manner of material cybersecurity incidents.

Commenting on the proposed rule, SEC Chairman Gary Gensler said, “Investors want to know more about how issuers are managing these growing risks. Many issuers already provide cybersecurity information to investors.

“I think companies and investors would benefit from this information being required in a way that is consistent, comparable and useful for decision-making. I am happy to support this proposal because, if adopted, it would strengthen the ability of investors to assess the cybersecurity practices and incident reporting of public companies.”

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