Caution: Crypto Regulatory World Still in Flux
Cryptocurrencies and blockchain are preparing to comply with a new regulatory attempt to manage their financial sector. The Financial Action Task Force, formed in 1989, has begun to develop a legal, regulatory, and operational framework to combat money laundering and terrorism funding, specifically targeting virtual assets like tokens and cryptocurrency. Industry leaders in the crypto space have argued that such regulation will undermine the efficacy of various wallets used to transmit and hold cryptocurrency as well as, depending on how regulation is implemented, force a retool of blockchain technology entirely.
From a U.S. regulatory perspective, SEC Commissioner Robert J. Jackson Jr., speaking at a conference on June 13, 2019, called for the SEC to issue guidance for CEOs on their use of social media.
New Storm Incoming: Climate Change’s Impact on Financial Markets
The impact of climate change is being examined at the top levels of the financial regulation environment with the appointment by President Trump of Rostin Behnam as commissioner of the Commodity Futures Trading Commission (“CFTC”). In remarks delivered before the Market Risk Advisory Committee (“MRAC”), Benham discussed climate-related market risks to the financial system. His plans for the CFTC include forming a panel to report on global warming and its impact on the financial sector. This report will likely lead to friction with a Trump Administration seemingly dismissive of the impacts of climate change.
Such a report may also augment concerns noted by large banks and financial institutions, which have already taken note of the impact of climate change. BlackRock found that “investors in electric utility stocks were quick to sell following extreme weather.” Yale University finance professor Stefano Giglio noted that “we don’t have enough information, and we don’t have the right financial products to insure this risk. The CFTC can help give that information and help lay out a global marker for what we need to do.” Studies examining the impact of climate change will be helpful to financial institutions and banks in the future as it relates to mortgages, food costs, and financial products like insurance.