Securities Finance Industry News | RMA: Regulators increasingly complicate technology innovation in the United States

RMA: Regulators increasingly complicate technology innovation in the United States

As the second day of the Risk Management Association conference drew to a close, the final panel highlighted where the most interest lies in the market for tokenized and traditional assets or crypto-assets.

Large asset owners are looking to add crypto assets to their agency portfolios. For buy-side clients, their interests fall into two categories: investment managers look to offerings that include ETFs dedicated to individual crypto-assets, while larger hedge funds are interested in crypto and trading pure and simple assets.

According to the panel, the main interests of banks revolve around regulatory clarity – which is crucial to achieve before taking significant action on the bank’s account and balance sheet as it relates to crypto-assets.

For one panelist, demand is seen on the middle side of large institutions for opportunities to tokenize and create new products, scale and become more efficient.

With respect to the regulatory landscape, regulators are making it increasingly difficult for innovation and progress to manifest in the United States in terms of these new technologies. Regulation needs to be clear, as the market tries to regulate emerging technologies with a set of rules that are “100 years old,” said one panelist.

Over a period of five years, panelists provided their predictions on how the financial services market will evolve with the advent of this technology and each asset class.

For one panelist, he thought “everything with a CUSIP will be on the blockchain” because it is a force multiplier that increases productivity. Progress is the “natural thing” and it is a force you cannot resist, adding that blockchain is progress and the market will see improvements over the years.

Another panelist concluded that there will be an ongoing process of trial and error, but he hopes to reach a point where the industry can use a common infrastructure and unlock the value of this new technology.

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