Kiffmeister’s #Fintech Daily Digest (20220917)

Ether’s New ‘Staking’ Model Could Draw SEC Attention

U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler reportedly has said that staked crypto-assets may be subject to federal securities regulations, in the wake of Ethereum’s transition from a proof-of-work (PoW) to proof-of-stake (PoS) protocol. He reportedly said that PoS crypto-assets pass the Howey test under which an asset is considered an “investment contract” if investors pledge their money to a common enterprise with an expectation of a profit to be derived from the efforts of others. Adam Levitin runs through the Howey test logic that would deem Ethereum to now be a security for SEC purposes. [Read more at the WSJ]

Some U.S. banks pause crypto custody because of SEC approach to custody accounting

In April 2022, the U.S. SEC published guidance about how corporations should account for the custody of crypto-assets on behalf of clients. The SEC says these crypto-assets should appear as both an asset and a liability, whereas the custody of conventional assets does not touch a balance sheet. Although the Basel Framework considers custody outside its scope, if banking regulators concur with the SEC’s position, crypto custody could become expensive for banks. In fact, Reuters is now reporting that some U.S. banks are rethinking plans to offer crypto custody services. [Read more at Ledger Insights]

Thai SEC Proposes Banning Crypto Businesses From Staking and Lending Activities

The Thai Securities and Exchange Commission is seeking public comments on a proposal to prohibit businesses from crypto staking and lending activities. More specifically, businesses cannot accept “deposits of digital assets from the customers and lend, invest, stake or employ such digital assets.” Moreover, they are prohibited from “providing support to third parties that undertake crypto saving and lending services, including marketing.” [Read more at Bitcoin.com]

Tickets available for CBDC Think Tank masterclass

The CBDC Think Tank, in partnership with the IMF and George Washington University, is hosting a full-day in-person CBDC Masterclass on October 12 in Washington DC for “official sector” staff and academics active in the CBDC / digital currency space only. The sessions are designed as instructional deep dives with full presentations and Q&A components.  Tickets are $99. [Register here]

Also, the CBDC Think Tank, in partnership with Georgetown University and the DC FinTech Week, is hosting a FREE (also in-person) Digital Currency Lecture Series, a set of digital currency lightning talks delivered by subject matter experts, on October 14 in Washington DC. [Request an invite here]

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.