New SEC Crypto Office—Goldman Partners With Modern Treasury
- Last Friday, the SEC announced the creation of two new offices, one of which will be the new Office of Crypto Assets. The office will be set up and running during this fall, and will be mostly focused on providing support around review of issuer filings.
- Renee Jones, Director of the Corporate Finance Division at the regulatory agency that will be in charge of the new office, stressed that it is important to have a focused group on the crypto asset industry due to the high growth on the industry during the last few years, and the expectation of continued growth in the future.
- Additionally, within the context of the creation of this new office, SEC chairman Gary Gensler reassured his stance towards crypto tokens, stating that the vast majority are securities, and should be registered and regulated as such, under the current securities laws.
- Following the end of the 6 month period given by the Biden Administration’s Executive Order on crypto released in March, the White House announced their first crypto framework, detailing findings from the several interagency reports that were recently turned in, and outlining future actions by the executive branch and regulatory agencies. Here’s CNBC’s post about it.
- The presidential approach emphasizes the importance of the US becoming a leading actor and key player in the digital asset ecosystem, and the need for a holistic government policy to ensure this happens. The framework revolves around six main themes: consumer and investor protection; promoting financial stability; countering illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
- It is important to note that the Biden Administration is showing interest in regulating the industry and ensuring the US becomes a competitive jurisdiction for crypto players. Here are the most important insights from the newly announced framework:
- The SEC and CFTC are encouraged to aggressively pursue legal action against unlawful practices within the crypto industry.
- Regulatory agencies are encouraged to issue guidance and regulations to address current and emerging risks in the digital asset space.
- The government will support and encourage the use of innovative instant payments systems, and a federal framework for nonbank payment providers will be created.
- The Treasury will focus on the mitigation of financial stability risks such as cybersecurity and other strategic risk issues in collaboration with the private sector and important international organizations.
- The Department of Energy will lead the research and regulatory efforts around the industry’s environmental impact and aim to create guidance, rules, and best-practices to ensure appropriate performance.
- The President will consider recommending legislative action to fight illicit money transactions involving crypto.
- The Government will continue to explore the possibility of a Digital Dollar (CBDC), by conducting further research around the potential implications.
- Modern Treasury, a money movement digital platform, has partnered with Goldman Sachs to potentialize growth in the embedded payments sector and help customers integrate international and digital payments within their products and to drive growth.
- Goldman and Modern Treasury have been working together to jointly serve clients for the past year, and this partnership formalizes their collaboration and creates a new team that will focus on helping customers integrate embedded payments as seamlessly as possible.
- This is a bet on the growth of digital payments in commerce, acknowledging that the current financial infrastructure was not built for digital payments provided directly from businesses, rather than specialized third party providers. It’s also interesting to see that partnerships between traditional financial institutions and fintechs or crypto companies are increasing, which might be the industry’s response to the challenging macro conditions that have resulted in a highly difficult funding environment.