RMA: Regulators making it difficult for technology innovation in the US
14 October 2022 RMA Conference 2022
Image: Shutterstock
As the second day of the Risk Management Association’s conference came to a close, the final panel highlighted where the most interest in the marketplace lies for tokenised and traditional assets or cryptoassets.
Larger asset owners are seeking to add crypto assets to their agency portfolios. For the buy-side clients, their interests fall into two categories — investment managers are looking toward offerings including ETFs dedicated to individual cryptoassets, while the larger hedge funds are taking an interest in crypto, and to trading assets outright.
The key interests for banks, according to the panel, revolve around regulatory clarity — which is crucial to attain before undertaking significant actions on the bank's own account and balance sheet with regards to cryptoassets.
For one panellist, demand is being seen on the intermediary sides of the larger institutions for opportunities to tokenise and create new products, scale and become more efficient.
Regarding the regulatory landscape, regulators are making it increasingly difficult for innovation and progress to manifest itself in the US in terms of these new technologies. There needs to be regulatory clarity as the market is trying to regulate emerging technology with a set of rules that are “100 years old”, said one panellist.
Looking across a five year span, panellists provided their predictions on how the financial services market will change to the advent of this technology and each asset class.
For one panellist, he believed that “everything with a CUSIP will be on the blockchain” as it is a force multiplier that increases productivity. Progress is the “natural thing” and it is a force you cannot stand against, adding that blockchain is progress and that the marketplace will see improvements as the years continue.
Another panellist concluded that there will be a continuous trial and error process, but he hopes to reach a point where the industry can use common infrastructure and unlock the value of this new technology.
Larger asset owners are seeking to add crypto assets to their agency portfolios. For the buy-side clients, their interests fall into two categories — investment managers are looking toward offerings including ETFs dedicated to individual cryptoassets, while the larger hedge funds are taking an interest in crypto, and to trading assets outright.
The key interests for banks, according to the panel, revolve around regulatory clarity — which is crucial to attain before undertaking significant actions on the bank's own account and balance sheet with regards to cryptoassets.
For one panellist, demand is being seen on the intermediary sides of the larger institutions for opportunities to tokenise and create new products, scale and become more efficient.
Regarding the regulatory landscape, regulators are making it increasingly difficult for innovation and progress to manifest itself in the US in terms of these new technologies. There needs to be regulatory clarity as the market is trying to regulate emerging technology with a set of rules that are “100 years old”, said one panellist.
Looking across a five year span, panellists provided their predictions on how the financial services market will change to the advent of this technology and each asset class.
For one panellist, he believed that “everything with a CUSIP will be on the blockchain” as it is a force multiplier that increases productivity. Progress is the “natural thing” and it is a force you cannot stand against, adding that blockchain is progress and that the marketplace will see improvements as the years continue.
Another panellist concluded that there will be a continuous trial and error process, but he hopes to reach a point where the industry can use common infrastructure and unlock the value of this new technology.
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